EXECUTION COPY
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DETAILS HOLDINGS CORP.
as Issuer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
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Indenture
Dated as of November 18, 1997
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12 1/2% Senior Discount Notes due 2007
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Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of November 18, 1997/1/
Trust Indenture
Act Section Indenture Section
(S) 310(a)(1) ..................................... 608
(a)(2) ..................................... 608
(b) ..................................... 609
(S) 312(a) ..................................... 701
(c) ..................................... 702
(S) 313(a) ..................................... 703
(c) ..................................... 703
(S) 314(a)(4) ..................................... 1010(a)
(c)(1) ..................................... 102
(c)(2) ..................................... 102
(e) ..................................... 102
(S) 315(a) ..................................... 601(a)
(b) ..................................... 602
(c) ..................................... 601(b)
(d) ..................................... 601(c), 603
316(a)(last sentence) .....................................
101 ("outstanding")
(a)(1)(A) ..................................... 502, 512
(a)(1)(B) ..................................... 513
(b) ..................................... 508
(c) ..................................... 104(d)
(S) 317(a)(1) ..................................... 503
(a)(2) ..................................... 504
(b) ..................................... 1003
(S) 318(a) ..................................... 111
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/1/Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
TABLE OF CONTENTS/*/
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.............................................................................. 1
SECTION 102. Compliance Certificates and Opinions..................................................... 16
SECTION 103. Form of Documents Delivered to Trustee................................................... 16
SECTION 104. Acts of Holders.......................................................................... 17
SECTION 105. Notices, Etc., to Trustee and Holdings................................................... 18
SECTION 106. Notice to Holders; Waiver................................................................ 18
SECTION 107. Effect of Headings and Table of Contents................................................. 19
SECTION 108. Successors and Assigns................................................................... 19
SECTION 109. Separability Clause...................................................................... 19
SECTION 110. Benefits of Indenture.................................................................... 19
SECTION 111. Governing Law............................................................................ 19
SECTION 112. Legal Holidays........................................................................... 19
SECTION 113. No Personal Liability of Directors, Officers, Employees, Stockholders or
Incorporators................................................................................. 20
SECTION 114. Counterparts............................................................................. 20
SECTION 115. Communications by Holders with Other Holders............................................. 20
ARTICLE TWO. NOTE FORMS
SECTION 201. Forms Generally.......................................................................... 20
SECTION 202. Restrictive Legends...................................................................... 22
SECTION 203. Form of Discount Note.................................................................... 24
SECTION 204. Form of Trustee's Certificate of Authentication.......................................... 37
SECTION 205. Form of Regulation S Certificate......................................................... 37
ARTICLE THREE. THE DISCOUNT NOTES
SECTION 301. Title and Terms.......................................................................... 38
SECTION 302. Denominations............................................................................ 39
SECTION 303. Execution, Authentication, Delivery and Dating........................................... 39
SECTION 304. Temporary Discount Notes................................................................. 40
SECTION 305. Registration, Registration of Transfer and Exchange...................................... 40
SECTION 306. Book-Entry Provisions for Global Discount Notes.......................................... 41
SECTION 307. Special Transfer Provisions.............................................................. 43
SECTION 308. Form of Certificate to Be Delivered in Connection with Transfers to
Institutional Accredited Investors............................................................ 45
SECTION 309. Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S...................................................................... 47
SECTION 310. Mutilated, Destroyed, Lost and Stolen Discount Notes..................................... 48
SECTION 311. Payment of Interest; Interest Rights Preserved........................................... 48
SECTION 312. Persons Deemed Owners.................................................................... 49
SECTION 313. Cancellation............................................................................. 49
SECTION 314. Computation of Interest.................................................................. 50
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/*/ Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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SECTION 315. CUSIP Numbers............................................................................ 50
ARTICLE FOUR. SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.................................................. 50
SECTION 402. Application of Trust Money............................................................... 51
ARTICLE FIVE. REMEDIES
SECTION 501. Events of Default........................................................................ 52
SECTION 502. Acceleration of Maturity; Rescission and Annulment....................................... 53
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.......................... 54
SECTION 504. Trustee May File Proofs of Claim......................................................... 54
SECTION 505. Trustee May Enforce Claims Without Possession of Discount Notes.......................... 55
SECTION 506. Application of Money Collected........................................................... 55
SECTION 507. Limitation on Suits...................................................................... 55
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest...................................................................................... 56
SECTION 509. Restoration of Rights and Remedies....................................................... 56
SECTION 510. Rights and Remedies Cumulative........................................................... 56
SECTION 511. Delay or Omission Not Waiver............................................................. 57
SECTION 512. Control by Holders....................................................................... 57
SECTION 513. Waiver of Past Defaults.................................................................. 57
SECTION 515. Undertaking for Costs.................................................................... 58
ARTICLE SIX. THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities...................................................... 58
SECTION 602. Notice of Defaults....................................................................... 59
SECTION 603. Certain Rights of Trustee................................................................ 59
SECTION 604. Trustee Not Responsible for Recitals or Issuance of Discount Notes....................... 61
SECTION 605. May Hold Discount Notes.................................................................. 61
SECTION 606. Money Held in Trust...................................................................... 61
SECTION 607. Compensation and Reimbursement........................................................... 61
SECTION 608. Corporate Trustee Required; Eligibility.................................................. 62
SECTION 609. Resignation and Removal; Appointment of Successor........................................ 62
SECTION 610. Acceptance of Appointment by Successor................................................... 63
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.............................. 64
SECTION 612. Trustee's Application for Instructions from Holdings..................................... 64
ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND HOLDINGS
SECTION 701. Holdings to Furnish Trustee Names and Addresses.......................................... 64
SECTION 702. Disclosure of Names and Addresses of Holders............................................. 65
SECTION 703. Reports by Trustee....................................................................... 65
ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS
SECTION 801. Holdings May Consolidate, Etc., Only on Certain Terms.................................... 65
SECTION 802. Successor Substituted.................................................................... 66
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ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
SECTION 901. Supplemental Indentures Without Consent of Holders....................................... 66
SECTION 902. Supplemental Indentures with Consent of Holders.......................................... 67
SECTION 903. Execution of Supplemental Indentures..................................................... 68
SECTION 904. Effect of Supplemental Indentures........................................................ 68
SECTION 905. Conformity with Trust Indenture Act...................................................... 68
SECTION 906. Reference in Discount Notes to Supplemental Indentures................................... 68
SECTION 907. Notice of Supplemental Indentures........................................................ 68
ARTICLE TEN. COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest..................................... 69
SECTION 1002. Maintenance of Office or Agency......................................................... 69
SECTION 1003. Money for Note Payments to Be Held in Trust............................................. 69
SECTION 1004. Corporate Existence..................................................................... 70
SECTION 1005. Payment of Taxes and Other Claims....................................................... 70
SECTION 1006. [Intentionally Omitted]................................................................. 71
SECTION 1007. [Intentionally Omitted]................................................................. 71
SECTION 1008. [Intentionally Omitted]................................................................. 71
SECTION 1009. Limitation on Restricted Payments....................................................... 71
SECTION 1010. Limitation on Indebtedness by Holdings.................................................. 73
SECTION 1011. Limitation on Indebtedness by the Company............................................... 73
SECTION 1012. Limitation on Affiliate Transactions.................................................... 75
SECTION 1013. Limitation on Restrictions on Distributions from Restricted
Subsidiaries.................................................................................. 75
SECTION 1014. Limitation on the Sale or Issuance of Preferred Stock of Restricted
Subsidiaries.................................................................................. 76
SECTION 1015. Change of Control....................................................................... 76
SECTION 1016. Limitation on Sales of Assets and Subsidiary Stock...................................... 77
SECTION 1017. SEC Reports............................................................................. 78
SECTION 1018. Limitation on Lines of Business......................................................... 78
SECTION 1019. Statement by Officers as to Default..................................................... 78
ARTICLE ELEVEN. REDEMPTION OF DISCOUNT NOTES
SECTION 1101. Optional Redemption..................................................................... 79
SECTION 1102. Applicability of Article................................................................ 79
SECTION 1103. Election to Redeem; Notice to Trustee................................................... 79
SECTION 1104. Selection by Trustee of Discount Notes to Be Redeemed................................... 79
SECTION 1105. Notice of Redemption.................................................................... 80
SECTION 1106. Deposit of Redemption Price............................................................. 81
SECTION 1107. Discount Notes Payable on Redemption Date............................................... 81
SECTION 1108. Discount Notes Redeemed in Part......................................................... 81
ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Holdings' Option to Effect Legal Defeasance or Covenant Defeasance...................... 82
SECTION 1202. Legal Defeasance and Discharge.......................................................... 82
SECTION 1203. Covenant Defeasance..................................................................... 82
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance................................... 83
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SECTION 1205. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions................................................................ 84
SECTION 1206. Reinstatement........................................................................... 84
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INDENTURE, dated as of November 18, 1997, between DETAILS HOLDINGS
CORP., a California corporation ("Holdings"), having its principal office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as trustee (the "Trustee"), having its
principal corporate trust office at Two ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS OF HOLDINGS
Holdings has duly authorized the creation of and issuance of (i)
Holdings' 12 1/2% Senior Discount Notes due 2007 (the "Senior Discount Notes" or
the "Initial Discount Notes") and (ii) if and when issued in exchange for Senior
Discount Notes as provided in the Registration Rights Agreement (as defined
herein), Holdings' 12 1/2% Series B Senior Discount Notes due 2007 (the
"Exchange Discount Notes") (collectively, the Senior Discount Notes and the
Exchange Discount Notes are referred to herein as the "Discount Notes"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor Holdings has duly authorized the execution and delivery of this
Indenture.
Upon the issuance of the Exchange Discount Notes, if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture will be subject to, and shall be governed by, the provisions of the
Trust Indenture Act of 1939, as amended, that are required or deemed to be part
of and to govern indentures qualified thereunder.
All things necessary have been done to make the Discount Notes, when
executed and duly issued by Holdings and authenticated and delivered hereunder
by the Trustee or the Authenticating Agent, the valid obligations of Holdings
and to make this Indenture a valid agreement of Holdings in accordance with
their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Discount Notes by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Discount Notes, as
follows:
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 100.
SECTION 101. Definitions.
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For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and words in the singular include the plural as well
as the singular, and words in the plural include the singular as well as
the plural;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or defined by SEC
rule and not otherwise defined herein have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper", as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the SEC adopted under the Trust Indenture Act;
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(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined herein);
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) the word "or" is not exclusive; and
(f) provisions of this Indenture apply to successive events and
transactions.
Certain terms, used principally in Articles Two, Ten and Twelve, are
defined in those Articles.
"Accreted Value" means as of a date of determination prior to November
15, 2002, with respect to any Discount Note, the sum of (a) the initial offering
price of such Discount Note and (b) the portion of the excess of the principal
amount of such Discount Note over such initial offering price which shall have
been accreted thereon through such date, such amount to be so accreted on a
daily basis at the rate of 12.5% per annum of the initial offering price of such
Discount Note, compounded semi-annually on each May 15 and November 15 from the
Issue Date through the date of determination, computed on the basis of a 360-day
year of twelve 30-day months. The Accreted Value of any Discount Note on or
after November 15, 2002 shall be 100% of the stated principal amount thereof.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by Holdings or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by Holdings or a Restricted Subsidiary of Holdings; or (iii) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary of Holdings; provided, however, that, in the case of clauses (ii) and
(iii), such Restricted Subsidiary is primarily engaged in a Related Business.
"Administrative Agent" means the Chase Manhattan Bank and any and all
successors thereto.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Premium" means, with respect to a Discount Note at any
Redemption Date, the greater of (i) 1.0% of the Accreted Value of such Discount
Note on such Redemption Date and (ii) the excess of (A) the present value at
such time of the redemption price of such Discount Note at November 15, 2002
(such redemption price being specified in the Form of Discount Note), computed
using a discount rate equal to the Treasury Rate plus 75 basis points, over (B)
the Accreted Value of such Discount Note on such Redemption Date.
"Asset Disposition" means any sale, lease (other than operating leases
entered into in the ordinary course of business), transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by Holdings or any of its Restricted Subsidiaries (including any
disposition by means of a merger, consolidation or similar transaction) other
than (i) a disposition by a Restricted Subsidiary to Holdings or by Holdings or
a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) the sale of Cash
Equivalents or Temporary Cash Investments in the ordinary course
of business, (iii) a disposition of inventory or a licensing of intellectual
property in the ordinary course of business, (iv) a disposition of obsolete or
worn out equipment or equipment that is no longer useful or to be used in the
conduct of the business of
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Holdings and its Restricted Subsidiaries and that is disposed of in each case in
the ordinary course of business, (v) transactions permitted under Section 801,
(vi) for purposes of Section 1016 only, a disposition subject to Section 1009
and (vii) the sale, discount or factoring, in each case without recourse, of
accounts receivable arising in the ordinary course of business.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
greater of (i) the interest rate implicit in such Sale/Leaseback Transaction and
(ii) the interest rate borne by the Senior Subordinated Notes, in each case,
compounded semi-annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Bank Indebtedness" means any and all amounts, whether outstanding on
the Issue Date or thereafter incurred, payable by the Company under or in
respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof and refinancings thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City or Boston, Massachusetts.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date such lease may be terminated without penalty.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Ratings Group, or "A" or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service,
Inc., and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Ratings Group or "P-2" or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments,
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and in either case maturing within 270 days after the date of acquisition
thereof; and (vi) interests in any investment company which invests solely in
instruments of the type specified in clauses (i) through (v) above.
"Change of Control" means (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of Holdings (or its successor by merger, consolidation or
purchase of all or substantially all of its assets) (for the purposes of this
clause, such person shall be deemed to beneficially own any Voting Stock of
Holdings held by a parent corporation, if such person "beneficially owns" (as
defined above), directly or indirectly, more than 50% of the voting power of the
Voting Stock of such parent corporation); (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of Holdings or Parent (together with any new directors
whose election by such Board of Directors or whose nomination for election by
the shareholders of Holdings or Parent was approved by a vote of at least a
majority of the directors of Holdings then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved or is a designee of the Permitted Holders or
was nominated or elected by such Permitted Holders or any of their designees)
cease for any reason to constitute a majority of the Board of Directors of
Holdings or Parent then in office; (iii) the sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of
Holdings and its Restricted Subsidiaries taken as a whole to any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) other than a
Permitted Holder or Parent; or (iv) the adoption by the stockholders of a plan
for the liquidation or dissolution of Holdings or Parent.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Details, Inc., a California corporation and any and
all successors thereto.
"Consolidated Coverage Ratio" as of any date of determination means,
with respect to any Person, the ratio of (i) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination to
(ii) Consolidated Interest Expense for such four fiscal quarters (in each case,
determined, for each fiscal quarter (or portion thereof) of the four fiscal
quarters ending prior to or including the Issue Date, on a pro forma basis to
give effect to the Transactions, the Offerings and the application of proceeds
thereof as if they had occurred at the beginning of such four quarter period
adjusted for any pro forma expense and cost reductions and related adjustments
that are directly attributable to the Transactions and the Offerings); provided,
however, that (1) If Holdings or any Restricted Subsidiary (x) has Incurred any
Indebtedness since the beginning of such period that remains outstanding on such
date of determination or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period (except that in
making such computation, the amount of Indebtedness under any revolving credit
facility outstanding on the date of such calculation shall be computed based on
(A) the average daily balance of such Indebtedness during such four fiscal
quarters or such shorter period for which such facility was outstanding or (B)
if such facility was created after the end of such four fiscal quarters, the
average daily balance of such Indebtedness during the period from the date of
creation of such facility to the date of such calculation) and the discharge of
any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, or (y) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio involves a
discharge of Indebtedness (in each case other than Indebtedness incurred under
any revolving credit facility unless such Indebtedness has been permanently
repaid), Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect
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on a pro forma basis to such discharge of such Indebtedness, including with the
proceeds of such new Indebtedness, as if such discharge had occurred on the
first day of such period, (2) if since the beginning of such period Holdings or
any Restricted Subsidiary shall have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Asset Disposition, the Consolidated EBITDA for such period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period or increased by an amount equal to the Consolidated EBITDA (if
negative) directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
Holdings or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to Holdings and its continuing Restricted Subsidiaries
in connection with such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent Holdings and its continuing Restricted Subsidiaries are
no longer liable for such Indebtedness after such sale), (3) if since the
beginning of such period Holdings or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, Consolidated EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period (adjusted for
any pro forma expense and cost reductions and related adjustments calculated on
a basis consistent with Regulation S-X under the Act) and (4) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into Holdings or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or any
Investment that would have required an adjustment pursuant to clause (2) or (3)
above if made by Holdings or a Restricted Subsidiary during such period,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition or
Investment occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of Holdings. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, 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 period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated EBITDA" for any period means the Consolidated Net
Income for such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization of intangibles and (v)
other non-cash charges reducing Consolidated Net Income (excluding any such non-
cash charge to the extent it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period not included in the calculation) and less, to the extent
added in calculating Consolidated Net Income, non-cash items increasing
Consolidated Net Income (excluding such non-cash items to the extent they
represent an accrual for cash receipts to be received prior to the Stated
Maturity of the Discount Notes) for such period. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the interest,
depreciation and amortization of, a Restricted Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated EBITDA of such Person
only to the extent (and in the same proportion) that the net income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person.
6
"Consolidated Interest Expense" means, for any period, the total
interest expense of Holdings and its Restricted Subsidiaries on a consolidated
basis determined in accordance with GAAP, plus, to the extent not included in
such interest expense, (i) interest expense attributable to Capitalized Lease
Obligations and the interest portion of rent expense associated with
Attributable Indebtedness in respect of the relevant lease giving rise thereto,
determined as if such lease were a capitalized lease in accordance with GAAP,
(ii) amortization of debt discount and debt issuance cost, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) interest actually paid by Holdings or any such Subsidiary under
any Guarantee of Indebtedness or other obligation of any other Person, (vii) net
costs associated with Hedging Obligations (including amortization of fees),
(viii) dividends in respect of all Disqualified Stock of Holdings and any
Restricted Subsidiaries, in each case, held by Persons other than Holdings or a
Wholly-Owned Subsidiary and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than Holdings)
in connection with Indebtedness Incurred by such plan or trust to purchase
Capital Stock of Holdings; provided, however, that there shall be excluded
therefrom any such interest expense of any Unrestricted Subsidiary to the extent
the related Indebtedness is not Guaranteed or paid by Holdings or any Restricted
Subsidiary. For purposes of the foregoing, total interest expense shall be
determined after giving effect to any net payments made or received by Holdings
and its Subsidiaries with respect to Interest Rate Agreements. Notwithstanding
the foregoing, the Consolidated Interest Expense with respect to any Restricted
Subsidiary of Holdings that was not a Wholly-Owned Subsidiary shall be included
only to the extent (and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income (loss)
of Holdings and its Restricted Subsidiaries on a consolidated basis determined
in accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, Holdings' equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during such
period to Holdings or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) Holdings' equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income to the extent such loss has been funded with cash from
Holdings or a Restricted Subsidiary; (ii) any net income (loss) of any Person
acquired by Holdings or a Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition; (iii) any net income of any
Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to Holdings, except that (A)
subject to the limitations contained in (iv) below Holdings' equity in the net
income of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary during such period to Holdings or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this clause)
and (B) Holdings' equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income; (iv)
any gain or loss realized upon the sale or other disposition of any property,
plant or equipment of Holdings or its consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Capital Stock of any Person; (v) any
extraordinary gain or loss, (vi) any non-cash compensation charge for employee
stock options or other stock awards, (vii) non-cash, non-recurring charges
reducing Consolidated Net Income (excluding any such non-cash charge to the
extent it represents an accrual of or reserve for cash charges in any future
period or amortization of prepaid cash expense that was paid in a prior period
not included in the calculation); (viii) non-cash, non-recurring items
increasing Consolidated Net
7
Income (excluding such non-cash items to the extent they represent an accrual
for cash receipts to be received prior to the Stated Maturity of the Discount
Notes); and (ix) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of Holdings and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of Holdings ending prior to the taking of any action for the
purpose of which the determination is being made, as (i) the par or stated value
of all outstanding Capital Stock of Holdings plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained earnings
or earned surplus less (A) any accumulated deficit and (B) any amounts
attributable to Disqualified Stock.
"Consolidated Tangible Assets" means, as of any date of determination,
the total assets, less goodwill, deferred financing costs and other intangibles
less accumulated amortization, shown on the balance sheet of Holdings and its
Restricted Subsidiaries as of the most recent date for which such balance sheet
is available, determined on a consolidated basis in accordance with GAAP.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of Holdings in accordance with GAAP;
provided, however, that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of Holdings in any
Unrestricted Subsidiary will be accounted for as an Investment. The term
"Consolidated" has a correlative meaning.
the "Corporate Trust Office" of the Trustee is the office of State
Street Bank and Trust Company at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Credit Facilities" means the senior subordinated loan facility of up
to $85 million of the Company, the senior unsecured credit facility of up to $55
million of Holdings and the credit facilities under the Senior Credit Agreement.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by Holdings.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by Holdings or one of its Restricted Subsidiaries
in connection with an Asset Disposition that is so designated as Designated
Noncash Consideration pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of Holdings or
such Restricted Subsidiary, less the amount of cash or Cash Equivalents received
in connection with a sale of such Designated Noncash Consideration. Such
Officers' Certificate shall state the basis of such valuation, which shall be as
determined by an Independent Appraiser with respect to the receipt in one or a
series of related transactions of Designated Noncash Consideration with a fair
market value in excess of $10 million.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund
8
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding capital stock which is convertible or exchangeable
solely at the option of Holdings or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Discount Notes, provided, that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such Stated Maturity shall be deemed to be Disqualified
Stock.
"Equity Offering" means an offering for cash by Holdings of its common
stock, or options, warrants or rights with respect to its common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer by Holdings to exchange all of the
Initial Discount Notes for a like aggregate principal amount of Exchange
Discount Notes, as provided in the Registration Rights Agreement and this
Indenture.
"Exchange Offer Registration Statement" has the meaning ascribed
thereto in the Registration Rights Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of the Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
the Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Register.
"Holdings" means Details Holdings Corp. (formerly known as Details,
Inc.), a California corporation, and any corporation which assumes the
obligations under the Discount Notes pursuant to the Indenture.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a
9
Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be incurred by such Restricted Subsidiary at the
time it becomes a Restricted Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto); (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services (except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services; (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such Person; (vi) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock (but excluding, in each case, any
accrued dividends); (vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such Indebtedness shall be the
lesser of (A) the fair market value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons; (viii) all
Indebtedness of other Persons to the extent Guaranteed by such Person; and (ix)
to the extent not otherwise included in this definition, net obligations of such
Person under Currency Agreements and Interest Rate Agreements (the amount of any
such obligations to be equal at any time to the termination value of such
agreement or arrangement giving rise to such obligation that would be payable by
such Person at such time). 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 the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Appraiser" means, with respect to any transaction or
series of related transactions, an independent, nationally recognized appraisal
or investment banking firm or other expert with experience in evaluating or
appraising the terms and conditions of such transaction or series of related
transactions.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by, such Person. For purposes
of Section 1009, (i) "Investment" shall include the portion (proportionate to
Holdings' equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of Holdings at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) Holdings' "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to Holdings' equity interest in such Subsidiary) of the fair
market value of the net assets
10
of such Subsidiary at the time that such Subsidiary is so re-designated a
Restricted Subsidiary; and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the Board of
Directors of Holdings. If Holdings or any Restricted Subsidiary of Holdings
sells or otherwise disposes of any Common Stock of any direct or indirect
Restricted Subsidiary of Holdings such that, after giving effect to any such
sale or disposition, Holdings no longer owns, directly or indirectly, 100% of
the outstanding Common Stock of such Restricted Subsidiary, Holdings shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Common Stock of such Restricted Subsidiary
not sold or disposed of.
"Issue Date" means the date on which the Initial Discount Notes are
originally issued.
"Management Agreement" means the Management Agreement among the
Company, Holdings and ▇▇▇▇ Capital, Inc. (and its permitted successors and
assigns thereunder) as in effect on the Issue Date.
"Merger" means the merger of DI Acquisition Corp. with and into
Holdings, with Holdings as the surviving corporation on October 28, 1997.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition and (iv) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained by
Holdings or any Restricted Subsidiary after such Asset Disposition.
"Offerings" means, collectively, the offerings of the Discount Notes
and the Senior Subordinated Notes.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of Holdings.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to
Holdings or the Trustee.
"Parent" means the parent corporation of Holdings, if any, or any
person for which Holdings or the Parent thereof is a direct or indirect Wholly-
Owned Subsidiary.
11
"Permitted Holders" means ▇▇▇▇ Capital, Inc. and any Affiliate thereof
or any wholly-owned Subsidiary of Holdings (for purposes of the definition of a
"Change of Control").
"Permitted Investment" means an Investment by Holdings or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, Holdings or a Restricted Subsidiary; provided,
however, that such Person's primary business is a Related Business; (iii) cash,
Cash Equivalents and Temporary Cash Investments; (iv) receivables owing to
Holdings or any Restricted Subsidiary created or acquired in the ordinary course
of business; (v) payroll, travel and similar advances made in the ordinary
course of business; (vi) loans or advances to employees and officers made in the
ordinary course of business; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to
Holdings or any Restricted Subsidiary or in satisfaction of judgments; and
(viii) Currency Agreements and Interest Rate Agreements entered into in the
ordinary course of Holdings' or its Restricted Subsidiaries' businesses and
otherwise in compliance with the Indenture; (ix) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (x) the Subsidiary Guarantees and guarantees by the Company of
Indebtedness otherwise permitted to be incurred by Restricted Subsidiaries of
the Company under the indenture for the Senior Subordinated Notes; (xi)
Investments the payment for which consists exclusively of Capital Stock (other
than Disqualified Stock) of Holdings; provided that the fair market value of
such Investments shall not be counted under clause (3)(B) of paragraph (a) of
Section 1009; (xii) Investments received by Holdings or its Restricted
Subsidiaries as consideration for asset dispositions, including Asset
Dispositions; provided in the case of an Asset Disposition, such Asset
Disposition is effected in compliance with Section 1016; and (xiii) other
Investments in an aggregate amount outstanding at any time not to exceed the
greater of (A) $7.5 million and (B) 5% of Total Consolidated Assets.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision hereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
A "Public Market" exists at any time with respect to the common stock
of Holdings if Holdings or the common stock of Holdings is then registered with
the SEC pursuant to Section 12(b) or 12(g) of Exchange Act and traded either on
a national securities exchange or in the National Association of Securities
Dealers Automated Quotation System.
"QIB" shall have the meaning ascribed thereto under Rule 144A of the
Securities Act.
"Recapitalization" means the recapitalization of Holdings pursuant to
the Recapitalization Agreement, dated as of October 4, 1997, as amended, among
Holdings, Holdings' stockholders and DI Acquisition Corp.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
12
date of the Indenture or Incurred in compliance with the Indenture (including
Indebtedness of Holdings that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness, provided, however, that (i) only with
respect to Indebtedness described under subclause (y) of clause (b)(iv) in
Section 1011, the Refinancing Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being refinanced (other than Indebtedness which is Senior
Indebtedness referred to in clause (iv) under such covenant) and (ii) such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding (plus
fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated as of November 18, 1997 among Holdings, the Company and
Chase Securities Inc.
"Regular Record Date" means, with respect to any Interest Payment
Date, the May 1 or November 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"Related Business" means any business which is the same as or related,
ancillary or complementary to any of the businesses in which Holdings and its
Restricted Subsidiaries are primarily engaged on the date of the Indenture.
"Representative" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
"Restricted Subsidiary" means any Subsidiary of Holdings other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby Holdings or a Restricted Subsidiary
transfers such property to a Person and Holdings or a Subsidiary leases it from
such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Agreement" means (i) the senior secured Credit
Agreement dated October 28, 1997, among the Company, The Chase Manhattan Bank,
as Administrative Agent, and the lenders parties thereto from time to time, as
the same may be amended, supplemented or otherwise modified from time to time
and any guarantees issued thereunder and (ii) any renewal, extension, refunding,
restructuring, replacement or refinancing thereof (whether with the original
Administrative Agent and lenders or another administrative agent or agents or
other lenders and whether provided under the original Senior Credit Agreement or
any other credit or other agreement or indenture).
"Senior Indebtedness" is defined, whether outstanding on the Issue
Date or thereafter issued, created, incurred or assumed, as the Bank
Indebtedness and all other Indebtedness of the Company, including interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) thereon
and fees relating thereto, unless, in the instrument creating or evidencing the
same
13
or pursuant to which the same is outstanding, it is provided that the
obligations in respect of such Indebtedness are not superior in right of, or are
subordinate to, payment to the Senior Subordinated Notes; provided, however,
that Senior Indebtedness will not include (i) any obligation of the Company to
any Subsidiary, (ii) any liability for Federal, state, foreign, local or other
taxes owed or owing by the Company, (iii) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (iv)
any Indebtedness, Guarantee or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness, Guarantee
or obligation of the Company, including any Senior Subordinated Indebtedness and
any Subordinated Obligations or (v) any Capital Stock.
"Senior Subordinated Indebtedness" means the Senior Subordinated Notes
and any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Senior Subordinated Notes in right
of payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Senior Subordinated Notes" means the $100.0 million aggregate
principal amount of 10% Senior Subordinated Notes due 2005 of the Company.
"Shelf Registration Statement" has the meaning ascribed thereto in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of Holdings within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means, as to any Person, any Indebtedness of
such Person (whether outstanding on the Issue Date or thereafter Incurred) which
is subordinate or junior in right of payment to the Senior Subordinated Notes
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of Holdings.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Senior Subordinated Notes by any Restricted Subsidiary of the Company
pursuant to the terms of the indenture for the Senior Subordinated Notes, and,
collectively, all such Guarantees.
"Successor Company" shall have the meaning assigned thereto in Section
801.
"Temporary Cash Investments" means any of the following: (i) any
Investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust
14
company which is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits aggregating in excess of $250
million (or the foreign currency equivalent thereof) and whose long-term debt,
or whose parent holding company's long-term debt, is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act), (iii)
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 a bank
meeting the qualifications described in clause (ii) above, (iv) Investments in
commercial paper, maturing not more than 180 days after the date of acquisition,
issued by a corporation (other than an Affiliate of Holdings) organized and in
existence under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of which
any investment therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇
Investors Service, Inc. or "A-1" (or higher) according to Standard and Poor's
Ratings Group, (v) Investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors Service, Inc. and (vi)
Investments in mutual funds whose investment guidelines restrict such funds'
investments to those satisfying the provisions of clauses (i) through (v) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture.
"Total Consolidated Assets" means, as of any date of determination,
the total assets shown on the balance sheet of Holdings and its Restricted
Subsidiaries as of the most recent date for which such balance sheet is
available, determined on a consolidated basis in accordance with GAAP.
"Transactions" means, collectively, the Recapitalization, the Merger,
the initial borrowings under the Credit Facilities and all other transactions
relating to the Recapitalization, the Merger or the financing thereof.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from the Redemption Date to November 15, 2002; provided, however, that if
the period from the Redemption Date to November 15, 2002 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to November 15, 2002
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means an officer of the Trustee assigned by the
Trustee to administer its corporate trust matters or to any other officer of the
Trustee to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
15
"Unrestricted Subsidiary" means (i) any Subsidiary of Holdings that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
Holdings (including any newly acquired or newly formed Subsidiary of Holdings)
to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, Holdings or any Restricted Subsidiary of Holdings that
is not a Subsidiary of the Subsidiary to be so designated; provided, however,
that either (A) the Subsidiary to be so designated has total consolidated assets
of $10,000 or less or (B) if such Subsidiary has consolidated assets greater
than $10,000, then such designation would be permitted under Section 1009. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) the Company could Incur $1.00 of additional Indebtedness under
Section 1011 and (y) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of Holdings,
all of the Capital Stock of which (other than directors' qualifying shares) is
owned by Holdings or another Wholly-Owned Subsidiary.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by Holdings to the Trustee to take any
action under any provision of this Indenture, Holdings and any other obligor on
the Discount Notes (if applicable) shall furnish to the Trustee an Officers'
Certificate in form and substance reasonably acceptable to the Trustee stating
that all conditions precedent, if any, provided for in this Indenture (including
any covenant compliance with which constitutes a condition precedent) relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided pursuant to Section 1019(a)) shall include:
16
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary
to enable him or it to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of Holdings or any other
obligor on the Discount Notes may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of Holdings or any other obligor on the Discount Notes stating that the
information with respect to such factual matters is in the possession of
Holdings or any other obligor on the Discount Notes unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to Holdings. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and Holdings, if made in the
manner provided in this Section 104.
17
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Discount Notes held by
any Person, and the date of holding the same, shall be proved by the Note
Register.
(d) If Holdings shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, Holdings may, at
its option, by or pursuant to a Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but Holdings
shall have no obligation to do so. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of outstanding Discount Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the outstanding Discount Notes shall be computed
as of such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Discount Note shall bind every future
Holder of the same Discount Note and the Holder of every Discount Note issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof (including in accordance with Section 310) in respect of anything done,
omitted or suffered to be done by the Trustee, any Paying Agent or Holdings in
reliance thereon, whether or not notation of such action is made upon such
Discount Note.
SECTION 105. Notices, Etc., to Trustee and Holdings.
--------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by Holdings or any other obligor on
the Discount Notes shall be sufficient for every purpose hereunder if made,
given, furnished or delivered in writing and mailed, first-class postage
prepaid, or delivered by recognized overnight courier, to or with the
Trustee and received at its Corporate Trust Office, Attention: Corporate
Trust Administration.
(2) Holdings by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or delivered, in writing, or mailed, first-class
postage prepaid, or delivered by recognized overnight courier, to Holdings
addressed to it and received at the address of its principal office
specified in the first paragraph of this Indenture, or at any other address
previously furnished in writing to the Trustee by Holdings.
18
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
Holdings or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder, at his address as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. Neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
If Holdings mails any notice or communication to any Holder, it shall
mail a copy to the Trustee at the same time.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by Holdings shall bind
its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in the Discount Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Discount Notes, express or
implied, shall give to any Person, (other than the parties hereto, any agent and
their successors hereunder and each of the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
19
SECTION 111. Governing Law.
-------------
THIS INDENTURE AND THE DISCOUNT NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO
THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
UPON THE ISSUANCE OF THE EXCHANGE DISCOUNT NOTES OR THE EFFECTIVENESS OF THE
SHELF REGISTRATION STATEMENT, THIS INDENTURE SHALL BE SUBJECT TO THE PROVISIONS
OF THE TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND
SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE U.S. FEDERAL COURTS, IN EACH CASE SITTING IN THE BOROUGH OF
MANHATTAN, AND WAIVES ANY OBJECTION AS TO VENUE OR FORUM NON CONVENIENS.
SECTION 112. Legal Holidays.
--------------
In any case where any interest payment date, any date established for
payment of Defaulted Interest pursuant to Section 311 or redemption date or
Stated Maturity of any Discount Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Discount Notes)
payment of principal (or premium, if any) or interest need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the interest payment date or date established for
payment of Defaulted Interest pursuant to Section 311, Redemption Date, or at
the Stated Maturity or Maturity; provided that no interest shall accrue for the
period from and after such interest payment date, redemption date or date
established for payment of Defaulted Interest pursuant to Section 311, Stated
Maturity or Maturity, as the case may be, to the next succeeding Business Day.
SECTION 113. No Personal Liability of Directors, Officers, Employees,
--------------------------------------------------------
Stockholders or Incorporators.
-----------------------------
No director, officer, employee, incorporator or stockholders, as such,
of Holdings shall have any liability for any obligations of Holdings under the
Discount Notes, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creations. Each Holder by accepting a
Discount Note waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of the Discount Notes.
SECTION 114. Counterparts.
------------
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
SECTION 115. Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Discount Notes.
Holdings, the Trustee, the Note Registrar and anyone else shall have the
protection of TIA (S) 312(c).
ARTICLE TWO. NOTE FORMS
200.
20
SECTION 201. Forms Generally.
---------------
The Discount Notes and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with applicable laws or the rules of any securities
exchange or Depositary or as may, consistently herewith, be determined by the
officers executing such Discount Notes, as evidenced by their execution of the
Discount Notes. Any portion of the text of any Discount Note may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of the
Discount Note. Each Discount Note shall be dated the date of its
authentication.
Initial Discount Notes offered and sold to the qualified institutional
buyers (as defined in Rule 144A under the Securities Act) in the United States
of America ("Rule 144A Note") will be issued on the Issue Date in the form of a
permanent global Discount Note, without interest coupons, substantially in the
form set forth in Sections 204 and 205 (a "Rule 144A Global Discount Note")
deposited with the Trustee, as custodian for the Depositary, duly executed by
Holdings and authenticated by the Trustee as hereinafter provided. The Rule
144A Global Discount Note may be represented by more than one certificate, if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the Rule
144A Global Discount Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Initial Discount Notes offered and sold outside the United States of
America ("Regulation S Discount Note") in reliance on Regulation S shall be
issued on the Issue Date in the form of a temporary global Discount Note,
without interest coupons, substantially in the form set forth in Sections 204
and 205 (a "Regulation S Global Discount Note"). Beneficial interests in a
Regulation S Temporary Global Discount Note will be exchangeable for beneficial
interests in a single permanent global security (the "Regulation S Permanent
Global Discount Note", together with the Regulation S Temporary Global Discount
Note, the "Regulation S Global Discount Note") on or after the expiration of the
Restricted Period (the "Release Date") upon the receipt by the Trustee or its
agent of a certificate certifying that the Holder of the beneficial interest in
the Regulation S Temporary Global Discount Note is a non-United States Person
within the meaning of Regulation S (a "Regulation S Certificate"), substantially
in the form set forth in Section 206. Upon receipt by the Trustee or Paying
Agent of a Regulation S Certificate, (i) with respect to the first such
Regulation S Certificate, Holdings shall execute and upon receipt of an
Authentication Order for authentication, the Authenticating Agent shall
authenticate and deliver to the custodian, the applicable Regulation S Permanent
Global Discount Note and (ii) with respect to the first and all subsequent
Regulation S Certificates, the custodian shall exchange on behalf of the
applicable beneficial owners the portion of the applicable Regulation S
Temporary Global Discount Note covered by such Regulation S Certificates for a
comparable portion of the applicable Regulation S Permanent Global Discount
Note. Upon any exchange of a portion of a Regulation S Temporary Global Discount
Note for a comparable portion of a Regulation S Permanent Global Discount Note,
the custodian shall endorse on the schedules affixed to each of such Regulation
S Global Discount Note (or on continuations of such schedules affixed to each of
such Regulation S Global Discount Note and made parts thereof) appropriate
notations evidencing the date of transfer and (x) with respect to the applicable
Regulation S Temporary Global Discount Note, a decrease in the principal amount
thereof equal to the amount covered by the applicable certification and (y) with
respect to the applicable Regulation S Permanent Global Discount Note, an
increase in the principal amount thereof equal to the principal amount of the
decrease in the applicable Regulation S Temporary Global Discount Note pursuant
to clause (x) above. The Regulation S Global Discount Note will be deposited
with the Trustee, as custodian for the Depositary, duly executed by Holdings and
authenticated by the Trustee as hereinafter provided. The Regulation S Global
Discount Note may be represented by more than one certificate, if so required by
the Depositary's rules regarding the
21
maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Regulation S Global Discount Note may from
time to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Discount Notes offered and sold to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities
Act) in the United States of America ("Institutional Accredited Investor
Discount Note") will be issued in the form of a permanent global Discount Note
substantially in the form set forth in Sections 204 and 205 (a "Institutional
Accredited Investor Global Discount Note") deposited with the Trustee, as
custodian for the Depositary, duly executed by Holdings and authenticated by the
Trustee as hereinafter provided. The Institutional Accredited Investor Global
Discount Note may be represented by more than one certificate, if so required by
the Depositary's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Institutional
Accredited Investor Global Discount Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
The Rule 144A Global Discount Note, the Regulation S Global Discount
Note and the Institutional Accredited Investor Global Discount Note are
sometimes collectively herein referred to as the "Global Discount Notes".
The definitive Discount Notes shall be printed, lithographed or
engraved on steel-engraved borders or may be produced in any other manner, all
as determined by the officers of Holdings executing such Discount Notes, as
evidenced by their execution of such Discount Notes.
SECTION 202. Restrictive Legends.
-------------------
Unless and until (i) an Initial Discount Note is sold under an
effective Registration Statement or (ii) an Initial Discount Note is exchanged
for an Exchange Discount Notes in connection with an effective Registration
Statement, in each case pursuant to the Registration Rights Agreement, such Rule
144A Global Discount Note and the Institutional Accredited Investor Global
Discount Note shall bear the following legend (the "Private Placement Legend")
on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH HOLDINGS OR ANY
AFFILIATE OF HOLDINGS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO HOLDINGS, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE
22
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF SECTION 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SUCH
SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO HOLDINGS' AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E)
OR (F) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO HOLDINGS AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
The Regulation S Global Discount Note shall bear the following legend
on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH HOLDINGS OR ANY AFFILIATE OF HOLDINGS WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
HOLDINGS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF SECTION 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SUCH
SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO HOLDINGS' AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E)
OR (F) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION
23
SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E),
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO HOLDINGS AND THE
TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON
AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED
TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE
DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
The Global Discount Notes, whether or not an Initial Discount Note,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO HOLDINGS OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF DTC AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
The Regulation S Temporary Global Discount Note shall also bear the
following legend on the face thereof:
THIS GLOBAL DISCOUNT NOTE IS A TEMPORARY GLOBAL DISCOUNT NOTE FOR PURPOSES
OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"). NEITHER THIS TEMPORARY GLOBAL DISCOUNT NOTE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED
UNDER THE INDENTURE REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL DISCOUNT NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE
REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE
INDENTURE.
The Discount Notes shall also bear the following legend on the face
thereof:
THIS DISCOUNT NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR
THE PURPOSES OF SECTIONS 1271-1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND
YIELD TO MATURITY
24
OF THE DISCOUNT NOTES MAY BE OBTAINED BY CONTACTING HOLDINGS' __________________
DEPARTMENT, TELEPHONE NO. (___) ________.
SECTION 203. Form of Discount Note.
---------------------
No. Principal Amount at Maturity $
--- --------------
CUSIP NO.
------------
12 1/2% [Series B]/1/ Senior Discount Note due 2007
-
Details Holdings Corp., a California corporation promises to pay to
___________, or registered assigns, the principal sum of __________________
Dollars on November 15, 2007.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
This Discount Note shall not bear interest prior to November 15, 2002.
From November 15, 1997 through November 15, 2002, the Accreted Value of this
Discount Note will increase as specified on the reverse side hereof.
Additional provisions of this Discount Note are set forth on the other
side of this Discount Note.
IN WITNESS WHEREOF, Holdings has caused this Discount Note to be
signed manually or by facsimile by its authorized Officers.
Dated: November __, 1997
DETAILS HOLDINGS CORP.
By:
---------------------------
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title President
By:
---------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title Chief Executive Officer
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY
-----------------------------
/1/ Include only for the Exchange Notes
-
25
as Trustee, certifies
that this is one of the
Discount Notes referred to
in the Indenture.
By
-------------------------------------
Authorized Signatory
26
[FORM OF REVERSE SIDE OF SENIOR DISCOUNT NOTE]
12 1/2% [Series B]/2/ Senior Discount Note due 2007
-
1. Interest
--------
Details Holdings Corp., a California corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called "Holdings")) promises to pay interest on the principal
amount of this Discount Note as described below.
The Senior Discount Notes due 2007 (the "Discount Notes") will accrete
in value until November 15, 2002 at a rate of 12 1/2% per annum, compounded
semiannually, to an aggregate principal amount of $110,000,000. Cash interest
will not accrue on the Discount Notes prior to November 15, 2002. Thereafter,
interest will accrue at the rate of 12 1/2% per annum and will be payable
semiannually in cash and in arrears to the Holders of record on each May 1 or
November 1 immediately preceding the interest payment date on May 15 and
November 15 of each year, commencing May 15, 2003. Cash interest on the
Discount Notes will accrue from the most recent interest payment date to which
interest has been paid or, if no interest has been paid, from November 15, 2002.
Interest will be computed on the basis of a 360-day year comprised of twelve 30-
day months.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on the Discount Notes is due and payable, Holdings
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such principal, premium, if any, and/or interest. Holdings will pay
interest (except defaulted interest) to the Persons who are registered Holders
of Discount Notes at the close of business on the May 1 or November 1 next
preceding the interest payment date even if the Discount Notes are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Discount Notes to a Paying Agent to
collect principal payments. Holdings will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, Holdings may pay interest by check payable
in such money. It may mail an interest check to a Holder's registered address.
3. Trustee, Paying Agent and Registrar
-----------------------------------
Initially, State Street Bank and Trust Company, a Massachusetts trust
company ("Trustee"), will act as Trustee, Paying Agent and Registrar. Holdings
may appoint and change any Paying Agent, Registrar or co-registrar without
notice to any Noteholder. Holdings or any of its domestically incorporated
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
Holdings issued the Discount Notes under an Indenture dated as of
November 18, 1997 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among Holdings and the
Trustee. The terms of the Discount Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the
-------------------------
/2/ Include only for the Exchange Notes
-
27
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Discount Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the Act for a statement
of those terms.
The Discount Notes are unsecured senior obligations of Holdings limited to
$110 million aggregate principal amount at maturity (subject to Section 310 of
the Indenture). This Discount Note is one of the Initial Discount Notes referred
to in the Indenture. The Discount Notes include the Initial Discount Notes and
any Exchange Discount Notes issued in exchange for the Initial Discount Notes
pursuant to the Indenture and the Registration Rights Agreement. The Initial
Discount Notes and the Exchange Discount Notes are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
Incurrence of Indebtedness by Holdings, the Company and Holdings' Restricted
Subsidiaries, the payment of dividends on, and the purchase or redemption of,
Capital Stock of Holdings and its Restricted Subsidiaries, the sale or transfer
of assets and Capital Stock of Restricted Subsidiaries, investments of Holdings
and its Restricted Subsidiaries and transactions with Affiliates. In addition,
the Indenture limits the ability of Holdings and its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. Optional Redemption
-------------------
The Discount Notes will be redeemable, at Holdings' option, in whole or in
part, at any time and from time to time on and after November 15, 2002 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record dated to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period commencing on November 15 of the
years set forth below:
Period Redemption Price
------ ----------------
2002..................................... 106.250%
2003..................................... 104.167%
2004..................................... 102.083%
2005 and thereafter...................... 100.000%
In addition, at any time and from time to time prior to November 15, 2000,
Holdings may redeem in the aggregate up to 40% of the principal amount of
Discount Notes originally issued with the proceeds of one or more Equity
Offerings received by, or invested in, Holdings so long as there is a Public
Market at the time of such redemption, at a redemption price (expressed as a
percentage of the Accreted Value thereof) of 112.5%; provided, however, that at
least 60% of the original principal amount of the Discount Notes must remain
outstanding after each such redemption.
At any time on or prior to November 15, 2002, the Discount Notes may also
be redeemed as a whole at the option of Holdings upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 90 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the Accreted Value thereof plus the Applicable Premium as of
the date of redemption (the "Redemption Date").
6. Selection
---------
In the case of any partial redemption, selection of the Discount Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Discount Note of $1,000 in original principal amount or
less will be
28
redeemed in part. If any Discount Note is to be redeemed in part only, the
notice of redemption relating to such Discount Note shall state the portion of
the principal amount thereof to be redeemed. A new Discount Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Discount Note.
7. 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 Discount Notes to be redeemed
at his registered address. Discount Notes in denominations of principal amount
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued and
unpaid interest on all Discount Notes (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Discount Notes (or such portions thereof)
called for redemption.
8. Put Provisions
--------------
Upon the occurrence of a Change Control, unless Holdings shall have
exercised its right to redeem the Discount Notes as described under Optional
Redemption above, each holder will have the right to require Holdings to
repurchase all or any part of such Holder's Discount Notes at a purchase price
in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) or, in the case of purchases of Discount Notes prior to
November 15, 2002, at a purchase price equal to 101% of the Accreted Value
thereof as of the date of purchase.
9. Denominations; Transfer; Exchange
---------------------------------
The Discount Notes are in registered form without coupons in denominations
of principal amount or Accreted Value (as applicable) of $1,000 and whole
multiples of $1,000. A Holder may transfer or exchange Discount Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange of (i) any Discount Note selected for
redemption (except, in the case of a Discount Note to be redeemed in part, the
portion of the Discount Note not to be redeemed) for a period beginning 15 days
before a selection of Discount Notes to be redeemed and ending on the date of
such selection or (ii) any Discount Notes for a period beginning 15 days before
an interest payment date and ending on such interest payment date.
10. Persons Deemed Owners
---------------------
The registered holder of this Discount Note may be treated as the owner of
it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to Holdings at its
request unless an abandoned property law designates
29
another Person. After any such payment, Holders entitled to the money must look
only to Holdings and not to the Trustee for payment.
12. Defeasance
----------
Subject to certain conditions set forth in the Indenture, Holdings at any
time may terminate some or all of its obligations under the Discount Notes and
the Indenture if Holdings deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Discount Notes to
redemption or maturity, as the case may be. Holdings in its sole discretion can
defease the Discount Notes.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Discount Notes may be amended with the written consent of the Holders of
at least a majority in principal amount of the Discount Notes then outstanding
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Discount Notes. Without the consent of any Noteholder, Holdings and
the Trustee may amend the Indenture or the Discount Notes to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 8 of the Indenture,
or to provide for uncertificated Discount Notes in addition to or in place of
certificated Discount Notes or to add guarantees with respect to the Discount
Notes or to secure the Discount Notes, or to add additional covenants or
surrender rights and powers conferred on Holdings, or to comply with any request
of the SEC in connection with qualifying the Indenture under the Act, or to make
any change that does not adversely affect the rights of any Noteholder, or to
provide for the issuance of Exchange Discount Notes.
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) a default in any payment
of interest on any Discount Note when due, continued for 30 days, (ii) a default
in the payment of principal of any Discount Note when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise, (iii) the failure by Holdings to comply for 30 days with its
obligations under Section 801 of the Indenture, or Sections 1009, 1010, 1011,
1012, 1013, 1014, 1015, 1016, 1017 or 1018 of the Indenture (in each case, other
than a failure to purchase Discount Notes which shall constitute an Event of
Default under clause (ii) above), (iv) the failure by Holdings to comply for 60
days after notice with its other agreements contained in the Indenture, (v) the
failure by Holdings or any Restricted Subsidiary to pay any Indebtedness within
any applicable grace period after final maturity or the acceleration of any such
Indebtedness by the holders thereof because of a default and if the total amount
of such Indebtedness unpaid or accelerated exceeds $10.0 million, (vi) certain
events of bankruptcy, insolvency or reorganization of Holdings or a Significant
Subsidiary or (vii) the rendering of any judgment or decree for the payment of
money in an amount in excess of $10.0 million against Holdings or a Significant
Subsidiary and such judgment or decree remains undischarged or unstayed for a
period of 60 days after such judgment or decree becomes final and non-appealable
and is not discharged, waived or stayed. If a default occurs and is continuing
it will not be deemed an Event of Default until the Trustee or the Holders of at
least 25% in principal amount of the outstanding applicable Discount Notes
notify the Company of the default and the Company does not cure such defect
within the time specified in clauses (iii) and (iv) above. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Discount
Notes being due and payable immediately upon the occurrence of such Events of
Default.
30
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the outstanding Discount Notes by notice
to Holdings and the Trustee may declare the principal of and accrued and unpaid
interest, if any, on all the Discount Notes to be due and payable immediately.
Upon such a declaration, such principal and accrued and unpaid interest shall be
due and payable immediately. Under certain circumstances, the holders of a
majority in principal amount of the outstanding Discount Notes may rescind any
such acceleration with respect to the Discount Notes and its consequences.
Noteholders may not enforce the Indenture or the Discount Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Discount Notes unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Discount Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing Default or Event
of Default (except a Default or Event of Default in payment of principal (or if
prior to November 15, 2002, the Accreted Value of) or interest) if it determines
that withholding notice is in their interest.
15. Trustee Dealings with Holdings
------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Discount Notes and may otherwise deal with and collect
obligations owed to it by Holdings or its affiliates and may otherwise deal with
Holdings or its affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of Holdings shall
not have any liability for any obligations of Holdings under the Discount Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Discount Note, each Noteholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Discount Notes.
17. Authentication
--------------
This Discount Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Discount Note.
18. Registration Rights
-------------------
The Holder of this Note is entitled to the benefits of the Exchange and
Registration Rights Agreement, dated as of November 18, 1997 (the "Registration
Rights Agreement"), among Holdings, the Company and the Initial Purchaser named
therein. In the event that either (i) an Exchange Offer Registration Statement
is not filed with the SEC on or prior to 90 days after the Issue Date, (A) an
Exchange Offer Registration Statement or a Shelf Registration Statement is not
declared effective within 180 days after the Issue Date, or (B) the Exchange
Offer is not consummated on or prior to 210 days after the Issue Date in respect
of tendered Discount Notes and a Shelf Registration Statement has not been
declared effective or a Shelf Registration
31
Statement is filed and declared effective within 180 days after the Issue Date
but shall thereafter cease to be effective (at any time that Holdings is
obligated to maintain the effectiveness thereof) without being succeeded within
60 days by an additional Registration Statement filed and declared effective
(each such event referred to in clauses (A) and (B), a "Registration Default"),
Holdings will pay liquidated damages to each holder of Transfer Restricted
Securities (as defined in the Registration Rights Agreement), during the period
of one or more such Registration Defaults, in an amount equal to $.192 per week
per $1,000 principal amount (or Accreted Value, as applicable) of the Discount
Notes constituting Transfer Restricted Securities held by such holder until the
applicable Registration Statement is filed or declared effective, the Exchange
Offer is consummated or the Shelf Registration Statement again becomes
effective, as the case may be, provided that, except in certain limited
circumstances, Holdings' obligation to pay liquidated damages will terminate
upon consummation of the Exchange Offer. All accrued liquidated damages shall be
paid to holders in the same manner as interest payments on the Discount Notes on
semi-annual payment dates which correspond to interest payment dates for the
Discount Notes. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease.]/3/
-
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Holdings has caused CUSIP numbers to be
printed on the Discount Notes and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Noteholders. No representation is
made as to the accuracy of such numbers either as printed on the Discount Notes
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
21. Governing Law
-------------
THIS DISCOUNT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST EXTENT PERMISSIBLE
BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Holdings will furnish to any Noteholder upon written request and without
charge to the Noteholder a copy of the Indenture. Requests may be made to:
--------------------------
/3/ Include only for Initial Discount Notes.
-
32
Details Holdings Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
33
ASSIGNMENT FORM
To assign this Discount Note, fill in the form below:
I or we assign and transfer this Discount Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Discount Note on the books
of Holdings. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
D a t e : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Your Signature:
---------------------------
Signature Guarantee:
-------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Discount Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for, STAMP), pursuant to S.E.C. Rule
17Ad-15.
[In connection with any transfer or exchange of any of the Discount Notes
evidenced by this certificate occurring prior to the date that is two years
after the later of the date of original issuance of such Discount Notes and the
last date, if any, on which such Discount Notes were owned by Holdings or any
Affiliate of Holdings, the undersigned confirms that such Discount Notes are
being:
CHECK ONE BOX BELOW:
1[_] acquired for the undersigned's own account, without transfer;
or
2[_] transferred to Holdings; or
3[_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
34
4[_] transferred pursuant to an effective registration statement
under the Securities Act; or
5[_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
6[_] transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933), that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter appears as Section 308 of
the Indenture); or
7[_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the Discount Notes evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or Holdings may require, prior to registering any
such transfer of the Discount Notes, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or Holdings may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
-----------------------------
Signature
Signature Guarantee:
----------------------------------------------------------------------
(Signature must be guaranteed)
----------------------------------------------------------------------
Signature
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15]./4/
-
---------------------------
/4/ Include only for the Initial Discount Notes
-
35
[TO BE ATTACHED TO GLOBAL DISCOUNT NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL DISCOUNT NOTE
The following increases or decreases in this Global Discount Note have
been made:
Amount of decrease Amount of increase Principal Amount of Signature of authorized
in Principal Amount in Principal Amount this Global Discount signatory of Trustee
Date of of this Global Discount of this Global Discount Note following such or Discount Notes
Exchange Note Note decrease or increase Custodian
36
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Discount Note purchased by Holdings
pursuant to Section 1015 or 1016 of the Indenture, check the box:
[_]
If you want to elect to have only part of this Discount Note purchased
by Holdings pursuant to Section 1015 or 1016 of the Indenture, state the amount
in principal amount (must be integral multiple of $1,000): $________.
Date: Your Signature
------------ --------------------------------------------
(Sign exactly as your name appears on the
other side of the Discount Note)
Signature Guarantee:
----------------------------------------------
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
37
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL 144A CERTIFICATES]
In connection with any transfer of this Discount Note occurring prior
to the date that is the earlier of the date of an effective Registration
Statement (as defined in the Registration Rights Agreement dated as of November
18, 1997) or November 18, 1999, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
[Check One]
---------
[_] (a) this Discount Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
--
[_] (b) this Discount Note is being transferred other than in accordance with
(a) above and documents are being furnished that comply with the
conditions of transfer set forth in this Discount Note and the
Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Discount Note in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date:
-----------------------------------------------------------------------
NOTICE: The signature must correspond with the name
as written upon the face of the within-
mentioned instrument in every particular,
without alteration or any change whatsoever.
Signature Guarantee:
-----------------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Discount Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding Holdings as the undersigned has requested pursuant to Rule
144A or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Date:
--------------------------- ------------------------------
38
NOTICE: To be executed by an executive officer.
SECTION 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Discount Notes referred to in the within-mentioned
Indenture.
State Street Bank and Trust
Company, as Trustee
By
-----------------------
Authorized Signatory
Dated:
----------------------
SECTION 205. Form of Regulation S Certificate.
--------------------------------
[date-on or after Release Date]
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Details, Inc. ("Holdings") 12 1/2% Senior Discount Notes
due 2007 (the "Notes") [CINS No. ______] [ISIN No. ____]
--------------------------------------------------------
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 18, 1997
(the "Indenture"), between Holdings and State Street Bank and Trust Company.
Capitalized terms used herein and not otherwise defined have the meanings set
forth in the Indenture.
[For purposes of acquiring a beneficial interest in the Regulation S
Permanent Global Security upon the expiration of the Restricted Period,][For
purposes of receiving payments under the Regulation S Temporary Global
Security,]/1/ the undersigned holder of a beneficial interest in the Regulation
-
S Temporary Global Security issued under the Indenture certifies that it is not
a U.S. person as defined by Regulation S under the Securities Act of 1933, as
amended.
-----------------------------
/1/ Select, as applicable.
-
39
We understand that this certificate is required in connection with certain
securities laws of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceeding.
Very truly yours,
[Name of Holder]
By:
---------------------------
Authorized Signatory
ARTICLE THREE. THE DISCOUNT NOTES
300.
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Discount Notes which may be
authenticated and delivered under this Indenture is limited to $110 million
aggregate principal amount at maturity, except for Discount Notes authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Discount Notes pursuant to Section 304, 305, 306, 307, 310, 906, 1015,
1016 or 1108 or pursuant to an Exchange Offer.
The Initial Discount Notes shall be known and designated as the "12
1/2% Senior Discount Notes due 2007," and the Exchange Discount Notes shall be
known and designated as the "12 1/2% Series B Senior Discount Notes due 2007,"
in each case, of Holdings. The Discount Notes will be issued at a discount to
their aggregate principal amount at maturity to generate gross proceeds to
Holdings on the Issue Date of $60,054,500 with a Stated Maturity of November 15,
2007. The Discount Notes will accrete in value until November 15, 2002 at a rate
per annum of 12 1/2%, compounded semiannually, to an aggregate principal amount
of $ 110 million, the principal amount at maturity. Cash interest will not
accrue on the Discount Notes prior to November 15, 2002. Thereafter, interest
will accrue at a rate per annum of 12.5% and will be payable semiannually in
cash and in arrears to the Holders of record on each May 1 or November 1
immediately preceding the interest payment date on May 15 and November 15 of
each year, commencing May 15, 2003. Cash interest on the Discount Notes will
accrue from the most recent interest payment date to which interest has been
paid or, if no interest has been paid, from November 15, 2002. All references to
the principal amount of the Discount Notes herein are references to the
principal amount at final maturity. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months, until the principal thereof is
paid or duly provided for. Interest on any overdue principal, interest (to the
extent lawful) or premium, if any, shall be payable on demand.
The principal of (and premium, if any) and interest on the Discount
Notes shall be payable at the office or agency of Holdings maintained for such
purpose in The City of New York, or at such other office or agency of Holdings
as may be maintained for such purpose; provided, however, that, at the option of
Holdings, interest may be paid by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Note Register.
Holders shall have the right to require Holdings to purchase their
Discount Notes, in whole or in part, in the event of a Change of Control
pursuant to Section 1015.
The Discount Notes shall be subject to repurchase by Holdings pursuant
to an Asset Disposition as provided in Section 1016.
The Discount Notes shall be redeemable as provided in Article Eleven
and in the Discount Notes.
SECTION 302. Denominations.
-------------
The Discount Notes shall be issuable only in fully registered form,
without coupons, and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Discount Notes shall be executed on behalf of Holdings by two
Officers, of which at least one Officer shall be the President or the Chief
Financial Officer of Holdings. The signature of any Officer on the Discount
Notes may be manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the Discount
Notes.
Discount Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of Holdings shall bind
Holdings, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Discount
Notes or did not hold such offices at the date of such Discount Notes.
At any time and from time to time after the execution and delivery of
this Indenture, Holdings may deliver Initial Discount Notes executed by Holdings
to the Trustee for authentication, together with an Order for the authentication
and delivery of such Discount Notes (the "Authentication Order"), and the
Trustee in accordance with such Authentication Order shall authenticate and
deliver such Initial Discount Notes directing the Trustee to authenticate the
Discount Notes and certifying that all conditions precedent to the issuance of
Discount Notes contained herein have been fully complied with, and the Trustee
in accordance with such Authentication Order shall authenticate and deliver such
Initial Discount Notes. Upon receipt of the Authentication Order, the Trustee
shall authenticate for original issue Exchange Discount Notes in an aggregate
principal amount at maturity not to exceed $110,000,000; provided that such
Exchange Discount Notes shall be issuable only upon the valid surrender for
cancellation of Initial Discount Notes of a like aggregate principal amount in
accordance with an Exchange Offer pursuant to the Registration Rights Agreement.
The Trustee shall be entitled to receive an Officers' Certificate and an Opinion
of Counsel of Holdings that it may reasonably request in connection with such
authentication of Discount Notes. Such order shall specify the amount of
Discount Notes to be authenticated and the date on which the original issue of
Initial Discount Notes or Exchange Discount Notes is to be authenticated.
Each Discount Note shall be dated the date of its authentication.
No Discount Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Discount
Note a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Discount Note shall be conclusive
evidence, and the only evidence, that such Discount Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
In case Holdings, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially
as an entirety to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which Holdings shall have been
merged, or the Person which shall have received a conveyance, transfer, lease or
other disposition as aforesaid, shall have executed an indenture supplemental
hereto with the Trustee pursuant to Article Eight, any of the Discount Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Discount Notes executed in the name
of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Discount Notes
surrendered for such exchange and of like principal amount; and the Trustee,
upon Holdings Request of the successor Person, shall authenticate and deliver
Discount Notes as specified in such request for the purpose of such exchange.
If Discount Notes shall at any time be authenticated and delivered in any new
name of a successor Person pursuant to this Section 303 in exchange or
substitution for or upon registration of transfer of any Discount Notes, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Discount Notes at the time outstanding for
Discount Notes authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to Holdings
to authenticate Discount Notes on behalf of the Trustee. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Discount
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 any Note Registrar or Paying Agent
to deal with Holdings and its Affiliates hereunder.
SECTION 304. Temporary Discount Notes.
------------------------
Pending the preparation of definitive Discount Notes, Holdings may
execute, and upon Authentication Order the Trustee shall authenticate and
deliver, temporary Discount Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination. Temporary
Discount Notes shall be substantially of the tenor of the definitive Discount
Notes in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Discount Notes may determine, as conclusively evidenced by their execution of
such Discount Notes.
If temporary Discount Notes are issued, Holdings will cause definitive
Discount Notes to be prepared without unreasonable delay. After the preparation
of definitive Discount Notes, the temporary Discount Notes shall be exchangeable
for definitive Discount Notes upon surrender of the temporary Discount Notes at
the office or agency of Holdings designated for such purpose pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Discount Notes, Holdings shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Discount Notes of authorized denominations. Until so exchanged, the
temporary Discount Notes shall in all respects be entitled to the same benefits
under this Indenture as definitive Discount Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
Holdings shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, Holdings shall provide for the registration of
Discount Notes and of transfers of Discount Notes. The Note Register shall be
in written form or any other form capable of being converted
into written form within a reasonable time. At all reasonable times, the Note
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the Trustee in such capacity,
together with any
successor of the Trustee in such capacity, the "Note Registrar") for the purpose
of registering Discount Notes and transfers of Discount Notes as herein
provided.
Upon surrender for registration of transfer of any Discount Note at
the office or agency of Holdings designated pursuant to Section 1002, Holdings
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Discount Notes of any
authorized denomination or denominations of a like aggregate principal amount.
Furthermore, any Holder of a Global Discount Note shall, by acceptance
of such Global Discount Note, agree that transfers of beneficial interest in
such Global Discount Note may be effected only through a book-entry system
maintained by the Holder of such Global Discount Note (or its agent), and that
ownership of a beneficial interest in the Discount Note shall be required to be
reflected in a book entry.
At the option of the Holder, Discount Notes may be exchanged for other
Discount Notes of any authorized denomination (not less than $1,000) and of a
like aggregate principal amount, upon surrender of the Discount Notes to be
exchanged at such office or agency. Whenever any Discount Notes are so
surrendered for exchange (including an exchange of Initial Discount Notes for
Exchange Discount Notes), Holdings shall execute, and the Trustee shall
authenticate and deliver, the Discount Notes which the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Discount
Notes for Exchange Discount Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC, the
Trustee shall have received an Officers' Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
the Initial Discount Notes to be exchanged for the Exchange Discount Notes shall
be cancelled by the Trustee.
All Discount Notes issued upon any registration of transfer or
exchange of Discount Notes shall be the valid obligations of Holdings,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Discount Notes surrendered upon such registration of transfer
or exchange.
Every Discount Note presented or surrendered for registration of
transfer or for exchange shall (if so required by Holdings or the Note
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to Holdings and the Note Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Discount Notes, but Holdings may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Discount Notes,
other than exchanges pursuant to Section 304, 906, 1015, 1016 or 1108, not
involving any transfer.
The Register shall be in written form in the English language or in
any other form including computerized records, capable of being converted into
such form within a reasonable time.
SECTION 306. Book-Entry Provisions for Global Discount Notes.
-----------------------------------------------
(a) Each Global Discount Note initially shall (i) be registered in the
name of the Depositary for such global Discount Note or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Discount Note
held on their behalf by the Depositary, or the Trustee
as its custodian, or under the Global Discount Note, and the Depositary may be
treated by Holdings, the Trustee and any agent of Holdings or the Trustee as the
absolute owner of such Global Discount Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent Holdings, the
Trustee or any agent of Holdings or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or shall impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of any
Discount Note.
(b) Transfers of a Global Discount Note shall be limited to transfers
of such Global Discount Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Discount Note may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 307. If required to
do so pursuant to any applicable law or regulation, beneficial owners may obtain
Discount Notes in definitive form ("Physical Discount Notes") in exchange for
their beneficial interests in a Global Discount Note upon written request in
accordance with the Depositary's and the Registrar's procedures. In addition,
Physical Discount Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Discount Note if (i) the
Depositary notifies Holdings that it is unwilling or unable to continue as
Depositary for such Global Discount Note or the Depositary ceases to be a
clearing agency registered under the Exchange Act, at a time when the Depositary
is required to be so registered in order to act as Depositary, and in each case
a successor depositary is not appointed by Holdings within 90 days of such
notice or, (ii) Holdings executes and delivers to the Trustee and Note Registrar
an Officers' Certificate stating that such Global Discount Note shall be so
exchangeable or (iii) an Event of Default has occurred and is continuing and the
Note Registrar has received a request from the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Discount Note pursuant to subsection (b) of this Section to
beneficial owners who are required to hold Physical Discount Notes, the Note
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of such Global Discount Note in an amount equal to the
principal amount of the beneficial interest in the Global Discount Note to be
transferred, and Holdings shall execute, and the Trustee shall authenticate and
deliver, one or more Physical Discount Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global Discount Note
to beneficial owners pursuant to subsection (b) of this Section, such Global
Discount Note shall be deemed to be surrendered to the Trustee for cancellation,
and Holdings shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Discount Note, an equal aggregate principal
amount of Physical Discount Notes of authorized denominations.
(e) Any Physical Discount Note delivered in exchange for an interest
in a Global Discount Note pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (c) of Section 307,
bear the applicable legend regarding transfer restrictions applicable to the
Physical Discount Note set forth in Section 202.
(f) The registered holder of a Global Discount 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 Discount Notes.
SECTION 307. Special Transfer Provisions.
---------------------------
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Discount Note or an Institutional Accredited Investor
Discount Note prior to the expiration of the Resale Restriction Termination Date
(as defined in Section 202 hereof):
(i) a transfer of a Rule 144A Discount Note or an Institutional
Accredited Investor Discount Note or a beneficial interest therein to a QIB
(as defined herein) shall be made upon the representation of the transferee
that it is purchasing the Discount Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding Holdings as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Rule 144A Discount Note or an Institutional
Accredited Investor Discount Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the Trustee
or its agent of a certificate substantially in the form set forth in
Section 308 hereof from the proposed transferee and, if requested by
Holdings or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them; and
(iii) a transfer of a Rule 144A Discount Note or an
Institutional Accredited Investor Discount Note or a beneficial interest
therein to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in Section
309 hereof from the proposed transferee and, if requested by Holdings or
the Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(b) The following provisions shall apply with respect to any proposed
transfer of a Regulation S Discount Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Discount Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee that it is purchasing the Discount Note for its own account or
an account with respect to which it exercises sole investment discretion
and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding Holdings as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Regulation S Discount Note or a beneficial
interest therein to an institutional accredited investor shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Section 308 hereof from the proposed transferee and, if
requested by Holdings or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a Regulation S Discount Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon, if requested by
Holdings or the Trustee, receipt by the Trustee or its agent of an opinion
of counsel, certification and/or other information satisfactory to each of
them.
Prior to or on the expiration of the Restricted Period, beneficial
interests in a Regulation S Global Discount Note may only be held through ▇▇▇▇▇▇
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear") or Cedel Bank, societe anonyme ("Cedel") (as
indirect participants in DTC) or another agent member of Euroclear and Cedel
acting for and on behalf of them, unless exchanged for interests in the Rule
144A Global Discount Note or the Institutional Accredited Investor Global
Discount Note in accordance with the certification requirements hereof. During
the Restricted Period, interests in the Regulation S Global Discount Note, if
any, may be exchanged for interests in the Rule 144A Global Discount Note, the
Institutional Accredited Investor Global Note or for Physical Discount Notes
only in accordance with the certification requirements described in Section 201.
After the expiration of the Restricted Period, interests in the
Regulation S Discount Note may be transferred without requiring certification
set forth in Section 308 or any additional certification.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Discount Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Discount Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Discount Notes bearing
the Private Placement Legend, the Note Registrar shall deliver only Discount
Notes that bear the Private Placement Legend unless there is delivered to the
Note Registrar an Opinion of Counsel reasonably satisfactory to Holdings and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(d) General. By its acceptance of any Discount Note bearing the
-------
Private Placement Legend, each Holder of such a Discount Note acknowledges the
restrictions on transfer of such Discount Note set forth in this Indenture and
in the Private Placement Legend and agrees that it will transfer such Discount
Note only as provided in this Indenture.
(e) Holdings shall deliver to the Trustee an Officer's Certificate
setting forth the dates on which the Restricted Period terminates (the "Resale
Restriction Termination Date").
The Note Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. Holdings shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Note Registrar.
(f) No Obligation of the Trustee: (i) The Trustee shall have no
----------------------------
responsibility or obligation to any beneficial owner of a Global Discount Note,
a member of, or a participant in the Depository or other Person with respect to
any ownership interest in the Discount Notes, with respect to the accuracy of
the records of the Depository or its nominee or of any participant or member
thereof or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to
such Discount Notes. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Discount Notes shall be given
or made only to the registered Holders (which shall be the Depository or its
nominee in the case of a Global Discount Note). The rights of beneficial owners
in any Global Discount Note in global form shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected and indemnified pursuant
46
to Section 607 in relying upon information furnished by the Depository with
respect to any beneficial owners, its members and participants.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Discount Note (including without limitation any transfers
between or among Depository participants, members or beneficial owners in any
Global Discount Note) other than to require delivery of such certificates and
other documentation of evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 308. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers to Institutional Accredited Investors.
-----------------------------------------------
[date]
DETAILS HOLDINGS CORP.
c/o State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $______
principal amount of the 12 1/2% Senior Discount Notes due 2007 (the "Discount
Notes") of Details Holdings Corp. ("Holdings").
Upon transfer, the Discount Notes would be registered in the name of
the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
(1) We are an institutional "accredited investor" (as defined in Rules
501(a)(1), (2), (3) and (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of an
institutional "accredited investor" at least $250,000 principal amount of the
Discount Notes, and we are acquiring the Discount Notes not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment in
the Discount Notes and invest in or purchase securities similar to the Discount
Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
(2) We understand that the Discount Notes have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Discount Notes to offer, sell
or otherwise transfer such Discount Notes prior to the date which is two years
after the later of the date
of original issue and the last date on which Holdings or any affiliate of
Holdings was the owner of such Discount Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to Holdings, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional "accredited investor", in each case
in a minimum principal amount of Discount Notes of $250,000 or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement of law
that the disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Discount Notes is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
Holdings and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Discount Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that Holdings and
the Trustee reserve the right prior to any offer, sale or other transfer prior
to the Resale Termination Date of the Discount Notes pursuant to clauses (d),
(e) or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to Holdings and the
Trustee.
TRANSFEREE:
BY:
Upon transfer the Discount Notes would be registered in the name of the new
beneficial owner as follows:
Taxpayer ID
Name Address Number:
------ ------- -------
Very truly yours,
[Name of Transferor]
By:
------------------------------ ---------------------------------
Name: Signature Medallion Guaranteed
Title:
SECTION 309. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S.
----------------------------------
[date]
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Details Holdings Corp. ("Holdings")
12 1/2% Senior Discount Notes due 2007 (the "Discount Notes")
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Discount Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Discount Notes was not made to a person in the
United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and Holdings are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------- -------------------------------
Authorized Signature Signature Medallion Guaranteed
SECTION 310. Mutilated, Destroyed, Lost and Stolen Discount Notes.
----------------------------------------------------
If (i) any mutilated Discount Note is surrendered to the Trustee, or
(ii) Holdings and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Discount Note, and there is delivered to
Holdings and the Trustee such security or indemnity, in each case, as may be
required by them to save each of them harmless, then, in the absence of notice
to Holdings or the Trustee that such Discount Note has been acquired by a bona
fide purchaser, Holdings shall execute and upon Authentication Order the Trustee
shall authenticate and deliver, in exchange for any such mutilated Discount Note
or in lieu of any such destroyed, lost or stolen Discount Note, a new Discount
Note of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Discount Note
has become or is about to become due and payable, Holdings in its discretion
may, instead of issuing a new Discount Note, pay such Discount Note.
Upon the issuance of any new Discount Note under this Section,
Holdings may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Discount Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Discount Note shall constitute an original
additional contractual obligation of Holdings and any other obligor upon the
Discount Notes, whether or not the mutilated, destroyed, lost or stolen Discount
Note shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Discount Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Discount Notes.
SECTION 311. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Discount Note which is payable, and is punctually paid
or duly provided for, on any interest payment date shall be paid to the Person
in whose name such Discount Note (or one or more Predecessor Discount Notes) is
registered at the close of business on the Regular Record Date for such interest
at the office or agency of Holdings maintained for such purpose pursuant to
Section 1002; provided, however, that each installment of interest may at
Holdings' option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 312,
to the address of such Person as it appears in the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
Any interest on any Discount Note which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the Regular
Record Date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Discount Notes (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall be paid by Holdings, at its
election in each case, as provided in clause (a) or (b) below:
(a) Holdings may elect to make payment of any Defaulted Interest to
the Persons in whose names the Discount Notes (or their respective
Predecessor Discount Notes) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. Holdings shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Discount Note and the date (not less than 30 days after such notice) of the
proposed payment (the "Special Interest Payment Date"), and at the same
time Holdings shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify Holdings of such Special Record
Date, and in the name and at the expense of Holdings, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
and Special Interest Payment Date therefor to be given in the manner
provided for in Section 106, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date and Special Interest Payment Date therefor having
been so given, such Defaulted Interest shall be paid on the Special
Interest Payment Date to the Persons in whose names the Discount Notes (or
their respective Predecessor Discount Notes) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) Holdings may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Discount Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by Holdings to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Discount
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Discount Note shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Discount Note.
SECTION 312. Persons Deemed Owners.
---------------------
Prior to the due presentment of a Discount Note for registration of
transfer, Holdings, the Trustee and any agent of Holdings or the Trustee may
treat the Person in whose name such Discount Note is registered as the owner of
such Discount Note for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 311) interest on such Discount
Note and for all other purposes whatsoever, whether or not such Discount Note be
overdue, and none of Holdings, the Trustee nor any agent of Holdings or the
Trustee shall be affected by notice to the contrary.
SECTION 313. Cancellation.
------------
All Discount Notes surrendered for payment, redemption, registration
of transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. If
Holdings shall acquire any of the Discount Notes other than as set forth in the
preceding sentence, the acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Discount Notes unless and
until the same are surrendered to the Trustee for cancellation pursuant
to this Section 313. No Discount Notes shall be authenticated in lieu of or in
exchange for any Discount Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Discount Notes held by the
Trustee shall be destroyed by the Trustee and the Trustee shall send a
certificate of such destruction to Holdings.
SECTION 314. Computation of Interest.
-----------------------
Interest on the Discount Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 315. CUSIP Numbers.
-------------
Holdings in issuing Discount Notes may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such "CUSIP" numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers,
either as printed on the Discount Notes or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Discount Notes, and any such
redemption or repurchase shall not be affected by any defect in or omission of
such CUSIP numbers. Holdings will promptly notify the Trustee of any change in
the CUSIP numbers.
ARTICLE FOUR. SATISFACTION AND DISCHARGE
400.
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Holdings Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Discount Notes expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of Holdings, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(i) either
(A) all Discount Notes theretofore authenticated and delivered
(other than (1) Discount Notes which have been lost, stolen or
destroyed and which have been replaced or paid as provided in Section
310 and (2) Discount Notes for whose payment money has theretofore
been deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by Holdings and thereafter repaid to
Holdings or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(B) all Discount Notes not theretofore delivered to the Trustee
for cancellation
(1) have become due and payable by reason of the making of a
notice of redemption or otherwise; or
(2) will become due and payable at their Stated Maturity
within one year; or
(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
Holdings,
and Holdings in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in cash or Government Obligations
sufficient to pay and discharge the entire indebtedness on such
Discount Notes not theretofore delivered to the Trustee for
cancellation, for principal of (and premium, if any) and interest to
the date of such deposit (in the case of Discount Notes which have
become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(ii) no Default or Event of Default with respect to this Indenture or
the Discount Notes shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default under,
any other instrument or agreement to which Holdings is a party or by which
it is bound;
(iii) Holdings has paid or caused to be paid all sums payable
hereunder by Holdings in connection with all the Discount Notes including
all fees and expenses of the Trustee;
(iv) Holdings has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of such Discount Notes at
maturity or the Redemption Date, as the case may be; and
(v) Holdings has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture and the termination of Holdings' obligation hereunder have been
satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of Holdings to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (i) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive any such satisfaction and discharge.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Discount Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including Holdings acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 401 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,
Holdings' obligations under this Indenture and the Discount Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
401; provided that if Holdings has made any payment of principal of, premium, if
any, or interest on any Discount Notes because of the reinstatement of its
obligations, Holdings shall be subrogated to the rights of the Holders of such
Discount Notes to receive such payment from the money or Government Obligations
held by the Trustee or Paying Agent.
ARTICLE FIVE. REMEDIES
500.
SECTION 501. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default in any payment of interest on any Discount Note when
due, continued for 30 days;
(ii) a default in the payment of principal of any Discount Note when
due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise;
(iii) the failure by Holdings to comply for 30 days after the notice
specified below with any of its obligations under Article Eight and
Sections 1009 through 1018 ( other than a failure to purchase Discount
Notes when required under Sections 1015 and 1016 which shall constitute an
Event of Default under clause (ii) above);
(iv) the failure by Holdings to comply for 60 days after the notice
specified below with any of its other agreements contained in this
Indenture or the Discount Note (other than those referred to in (i), (ii)
or (iii) above);
(v) Indebtedness of Holdings or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the Holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $10 million;
(vi) Holdings 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 takes any comparable action under any foreign laws relating to
insolvency; or
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against Holdings or any Significant Subsidiary in
an involuntary case;
(B) appoints a Custodian of Holdings or any Significant Subsidiary
for all or substantially all of its property; or
54
(C) orders the winding up or liquidation of Holdings or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 90 consecutive days;
(viii) any judgment or decree for the payment of money in excess of
$10 million is rendered against Holdings or any Significant Subsidiary and
such judgment or decree remains undischarged or unstayed for a period of 60
days after such judgment becomes final and non-appealable; or
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
A default under clauses (iii) and (iv) will not constitute an Event of
Default until the Trustee or the holders of 25% in principal amount of the
outstanding Discount Notes notify Holdings of the default and Holdings does not
cure such default within the time specified in clauses (iii) and (iv) after
receipt of such notice. Such notice must specify the Default, demand that it is
to be remedied and state that such notice is a "Notice of Default."
Holdings also is required to deliver to the Trustee, within 30 days
after the occurrence thereof, written notice of any events that would become an
Event of Default under clause (iii), (iv) or (vii) above, their status and what
action Holdings is taking or proposes to take in respect thereof.
If a Default occurs and is continuing and is known to the Trustee, the
Trustee must mail to each holder notice of the Default within 90 days after it
occurs. Except in the case of a Default in the payment of principal of (or if
prior to November 15, 2002, the Accreted Value of), premium, if any, or interest
on any Discount Note, the Trustee may withhold notice if and so long as a
committee of its Trust officers in good faith determines that withholding notice
is in the interests of the Holders of the Discount Notes.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than by reason of an Event of Default
specified in Section 501(vi) or 501(vii)) occurs and is continuing, the Trustee
by notice to Holdings or the Holders of at least 25% in principal amount of the
applicable Discount Notes outstanding may declare the principal (or if prior to
November 15, 2002, the Accreted Value of) (and premium, if any), accrued and
unpaid interest and any other monetary obligations on all such then outstanding
Discount Notes to be due and payable immediately, by a notice in writing to
Holdings (and to the Trustee if given by Holders). Upon the effectiveness of
such declaration, such principal (or Accreted Value) (and premium, if any) and
interest will be due and payable immediately. Notwithstanding the foregoing, in
the case of an Event of Default specified in Section 501(vi) or 501(vii) occurs
and is continuing, then the principal amount of all the Discount Notes shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the outstanding
Discount Notes by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. The Trustee may rely upon such notice of rescission without any
independent investigation as to the satisfaction of the conditions in the
55
preceding sentence. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
If an Event of Default specified in Section 501(i) or 501(ii) occurs
and is continuing, the Trustee, in its own name as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against Holdings or any other obligor upon the Discount Notes
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of Holdings or any other obligor upon the Discount
Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy, subject however to Section 513. No recovery of any
such judgment upon any property of Holdings shall affect or impair any rights,
powers or remedies of the Trustee or the Holders.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Holdings or any other obligor, upon the Discount
Notes or the property of Holdings or of such other obligor or their creditors,
the Trustee (irrespective of whether the principal of the Discount Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on Holdings for
the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Discount Notes, to take such other actions (including participating as a
member, voting or otherwise, of any official committee of creditors
appointed in such matter) and to file such other papers or documents and
take such other actions as the Trustee (including, participation as a
member of any creditors committee) may deem 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 of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or
56
composition affecting the Discount Notes or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding; provided, however, that the Trustee may, on behalf of such
Holders, vote for the election of a trustee in bankruptcy or other similar
official.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Discount Notes.
--------------
All rights of action and claims under this Indenture or the Discount
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Discount Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Discount Notes in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Discount Notes and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Discount Notes in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Discount Notes for principal (and premium,
if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including Holdings or any other obligor on the Discount Notes, as
their interests may appear or as a court of competent jurisdiction may
direct, provided that all sums due and owing to the Holders and the Trustee
have been paid in full as required by this Indenture.
SECTION 507. Limitation on Suits.
-------------------
Except to enforce the right to receive payment of principal (or if
prior to November 15, 2002, the Accreted Value of), premium, if any, or interest
when due, no holder may pursue any remedy with respect to the Indenture or the
Discount Notes unless:
(i) such holder has previously given the Trustee notice that an
Event of Default is continuing;
(ii) holders of at least 25% in principal amount of the outstanding
Discount Notes have requested the Trustee to pursue the remedy;
(iii) such holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense;
57
(iv) the Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or indemnity; and
(v) the holders of a majority in principal amount of the outstanding
Discount Notes have not given the Trustee a direction that, in the opinion of
the Trustee, is inconsistent with such request within such 60-day period.
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Discount Note to affect, disturb or prejudice the rights
of any other Holders, or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture or any
Discount Note, except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture the Holder of
any Discount Note shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Eleven)
and in such Discount Note of the principal of (and premium, if any) and (subject
to Section 311) interest on such Discount Note on the respective Stated
Maturities expressed in such Discount Note (or, in the case of redemption or
repurchase, on the Redemption Date or repurchase) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, Holdings, any other obligor on the Discount
Notes, the Trustee and the Holders shall be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Discount Notes in the last
paragraph of Section 310, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
58
SECTION 512. Control by Holders.
------------------
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding Discount Notes are given the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee,
provided that
(i) such direction shall not be in conflict with any rule of law or
the Indenture;
(ii) the Trustee need not take any action which might be unduly
prejudicial to the rights of any other Holder or would involve the Trustee in
personal liability; and
(iii) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
Prior to taking any action under the Indenture, 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.
SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Sections 508 and 902, the Holders of a majority in
aggregate principal amount of the outstanding Discount Notes (including consents
obtained in connection with a tender offer or exchange offer for the Discount
Notes) may on behalf of the Holders of all the Discount Notes, by written notice
to the Trustee, waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of interest on, premium, if any, or the principal of (or
if prior to November 15, 2002, the Accreted Value), any such Discount Note held
by a non-consenting Holder, or in respect of a covenant or a provision which
cannot be amended or modified without the consent of all Holders.
In the event that any Event of Default specified in Section 501(v)
shall have occurred and be continuing, such Event of Default and all
consequences thereof (including without limitation any acceleration or resulting
payment default) shall be annulled, waived and rescinded, automatically and
without any action by the Trustee or the Holders of the Discount Notes, if
within 30 days after such Event of Default arose (i) the Indebtedness that is
the basis for such Event of Default has been discharged, or (ii) the holders
thereof have rescinded or waived the acceleration, notice or action (as the case
may be) giving rise to such Event of Default, or (iii) if the Default that is
the basis for such Event of Default has been cured.
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 Event of Default or impair any right consequent thereon.
SECTION 514. [Intentionally Omitted].
SECTION 515. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Discount
Note by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay
59
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the outstanding Discount Notes, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or Accreted Value of) (or premium, if any) or interest on any Discount Note on
or after the respective Stated Maturities expressed in such Discount Note (or,
in the case of redemption, on or after the Redemption Date).
600.
ARTICLE SIX. THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a Default or an Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and the Trustee
should not be liable except for the performance of such duties as
specifically set forth in the 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 or willful misconduct 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, 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 not to verify
the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Trust Officer of the Trustee has actual knowledge or of
which written notice of such Default or Event of Default shall have been given
to the Trustee of Holdings, any other obligor of the Discount Notes or by any
Holder, 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 circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(i) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in aggregate principal amount of
the outstanding Discount Notes relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
60
(iv) the Trustee shall not be required to examine any of the
reports, information or documents filed with it pursuant to Section 1017 to
determine whether there has been any breach of the covenants of Holdings
set forth in Sections 1004 through 1016.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section and to the TIA.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such Default hereunder actually known to a Trust Officer of
the Trustee, unless such Default shall have been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest on any Discount Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Trust Officers
of the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders. Notwithstanding anything to the contrary expressed
in this Indenture, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default hereunder unless and until the Trustee shall have
received written notice thereof from Holdings at its principal Corporate Trust
Office as specified in Section 105, except in the case of an Event of Default
under Sections 501(i) or 501(ii) (provided that the Trustee is the Paying
Agent).
SECTION 603. Certain Rights of Trustee.
-------------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Subject to the provisions of TIA Sections 315(a) through 315(d):
(i) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon (whether in its original or
facsimile form) any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Trustee need not investigate any fact or
matter stated in the documents;
(ii) any request or direction of Holdings mentioned herein
shall be sufficiently evidenced by a Holdings Request or Authentication
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(iii) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith or willful misconduct on its part, request and rely
upon an Officers' Certificate or an Opinion of Counsel and shall not liable
for any action it takes or omits to take in good faith reliance on such
Officer's Certificate or Opinion of Counsel;
61
(iv) the Trustee may consult with counsel of its selection and
any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to the Trustee against the costs, expenses, losses and
liabilities which might be incurred by it in compliance with such request
or direction;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of Holdings,
personally or by agent or attorney;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(viii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(c) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Discount Notes.
--------------
The recitals contained herein and in the Discount Notes, except for
the Trustee's certificates of authentication, shall be taken as the statements
of Holdings, and the Trustee assumes no responsibility for their correctness and
it shall not be responsible for Holdings' use of the proceeds from the Discount
Notes. The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Discount Notes, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture, authenticate
the Discount Notes and perform its obligations hereunder and that the statements
made by it in a Statement of Eligibility on Form T-1 supplied to Holdings are
true and accurate, subject to the qualifications set forth therein. The Trustee
shall not be accountable for the use or application by Holdings of the proceeds
of the Discount Notes.
62
SECTION 605. May Hold Discount Notes.
-----------------------
The Trustee, any Paying Agent, any Note Registrar, any Authenticating
Agent or any other agent of Holdings or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Discount Notes and, subject
to TIA Sections 310(b) and 311, may otherwise deal with Holdings with the same
rights it would have if it were not Trustee, Paying Agent, Note Registrar,
Authenticating Agent or such other agent.
SECTION 606. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with
Holdings.
SECTION 607. Compensation and Reimbursement.
------------------------------
Holdings agrees:
(i) to pay to the Trustee from time to time such compensation
as shall be agreed to in writing between Holdings and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents, consultants and counsel
and costs and expenses of collection), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify each of the Trustee or any predecessor
Trustee (and their respective directors, officers, stockholders, employees
and agents) for, and to hold them harmless against, any and all loss,
damage, claim, liability or expense, including taxes (other than taxes
based on the income of the Trustee) incurred without negligence, willful
misconduct or bad faith on their part, arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of the Trustee's powers
or duties hereunder.
The obligations of Holdings under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such
obligations of Holdings, the Trustee shall have a lien prior to the Holders of
the Discount Notes upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the payment of principal of (and
premium, if any) or interest on particular Discount Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(vi) or (vii), the expenses
(including the reasonable charges and expenses of its
63
counsel) of and the compensation for such services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1), and which may have an
office in The City of New York and shall have a combined capital and surplus of
at least $50,000,000. If the Trustee does not have an office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to Holdings to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 608,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 608, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section.
(b) The Trustee may resign at any time by giving written notice
thereof to Holdings. Upon receiving such notice of resignation, Holdings shall
promptly appoint a successor trustee by written instrument executed by authority
of the Board of Directors, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor trustee. If an instrument of acceptance
required by this Section shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition, at the expense of Holdings, any court of competent jurisdiction for
the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the outstanding Discount Notes,
delivered to the Trustee and to Holdings. The Trustee so removed may, at the
expense of Holdings, petition any court of competent jurisdiction for the
appointment of a successor Trustee if no successor Trustee is appointed within
30 days of such removal.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by Holdings or by any Holder
who has been a bona fide Holder of a Discount Note for at least six months,
or
(ii) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by Holdings or by
any Holder who has been a bona fide Holder of a Discount Note for at least
six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a Custodian of the Trustee or of its
property shall be appointed or any public officer shall
64
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any such
case, (A) Holdings, by a Board Resolution, may remove the Trustee, or (B)
subject to TIA Section 315(e), any Holder who has been a bona fide Holder
of a Discount Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
Holdings, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the outstanding Discount Notes
delivered to Holdings and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by Holdings. If
no successor Trustee shall have been so appointed by Holdings or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who has been
a bona fide Holder of a Discount Note for at least six months may, at the
expense of Holdings on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) Holdings shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of
Discount Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 610. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to Holdings and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of Holdings or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Notwithstanding the replacement of the Trustee pursuant to
this Section 610, Holdings' obligations under Section 607 shall continue for the
benefit of the retiring Trustee with regard to expenses and liabilities incurred
by it and compensation earned by it prior to such replacement or otherwise under
the Indenture. Upon request of any such successor Trustee, Holdings shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise
65
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Discount Notes shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Discount Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Discount Notes. In case at that time any
of the Discount Notes shall not have been authenticated, any successor Trustee
may authenticate such Discount Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Discount Notes in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 612. Trustee's Application for Instructions from Holdings.
----------------------------------------------------
Any application by the Trustee for written instructions from Holdings
may, at the option of the Trustee, set forth in writing any action proposed to
be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective.
Subject to Section 610, the Trustee shall not be liable for any action taken by,
or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of Holdings
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
700. ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND HOLDINGS
SECTION 701. Holdings to Furnish Trustee Names and Addresses.
-----------------------------------------------
Holdings will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by Holdings of any such request, a list of
similar form and content to that in Subsection (a) hereof as of a date not more
than 15 days prior to the time such list is furnished; provided, however, that
if and so long as the Trustee shall be the Note Registrar, no such list need
be furnished.
SECTION 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Discount Notes, by receiving and holding the same,
agrees with Holdings and the Trustee that none of Holdings or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
66
SECTION 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Discount Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a). Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including Holdings' compliance with any of its
covenants hereunder (as to which the Trustee is entitled to conclusively rely
exclusively on Officer's Certificates).
The Trustee also shall comply with TIA (S) 313(b). A copy of each
report at the time of its mailing to Holders shall be filed by the Trustee with
the SEC and each stock exchange (if any) on which the Discount Notes are listed.
Holdings agrees to notify promptly the Trustee whenever the Discount Notes
become listed on any stock exchange and of any delisting thereof.
800. ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS
SECTION 801. Holdings May Consolidate, Etc., Only on Certain Terms.
-----------------------------------------------------
Holdings will not in a single transaction or series of related
transactions consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation, partnership, trust or limited liability
company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
Company (if not Holdings) shall expressly assume, by supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of Holdings under the Discount Notes and
hereunder;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, Holdings
or the Successor Company if Holdings is not the continuing obligor under
this Indenture would at the time of such transaction or series of
transactions, after giving pro forma effect to such transaction have a
Consolidated Net Worth not less than that of Holdings immediately prior to
the transaction; and
(iv) Holdings shall have delivered to the Trustee (A) an Officers'
Certificate, stating that (1) such Officers are not aware of any Default or
Event of Default that shall have happened and be continuing and (2) such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture; provided that no Officers' Certificate will be
required as to matters described in clause (A)(1) of this clause (iv) for a
consolidation, merger or transfer described in the last paragraph of this
Section 801, and (B) an Opinion of Counsel, stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture, both in the form required by this Indenture; provided
that (1) in giving such opinion such counsel may rely on such officer's
certificate as to any matters of fact (including without limitation as to
compliance with the foregoing clauses (ii)
67
and (iii)), and (2) no Opinion of Counsel will be required for a
consolidation, merger or transfer described in the last paragraph of this
Section 801.
Notwithstanding the foregoing clauses (ii) and (iii), (x) Holdings may
consolidate with or merge with or into, or convey or transfer all or
substantially all its assets, subject to all liabilities, including the Discount
Notes, to a Wholly-Owned Restricted Subsidiary of Holdings in which case, such
Wholly-Owned Restricted Subsidiary will succeed to, and be substituted for, and
may exercise every right and power of, Holdings under the Indenture and
thereafter Holdings shall be released from all obligations and covenants
thereunder, (y) any Restricted Subsidiary of Holdings may consolidate with,
merge into or transfer all or part of its properties and assets to Holdings and
(z) Holdings may merge with an Affiliate incorporated solely for the purpose of
reincorporating Holdings in another jurisdiction to realize tax or other
benefits.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of Holdings with or merger of Holdings with or
into any other corporation or any conveyance, transfer, lease or other
disposition of all or substantially all of the assets of Holdings to any Person
in accordance with Section 801, the Successor Company will succeed to, and be
substituted for, and may exercise every right and power of, Holdings hereunder
and thereafter the predecessor shall be released from all obligations and
covenants hereunder, but, in the case of conveyance, transfer or lease of all or
substantially all its assets (other than pursuant to the last paragraph under
Section 801), the predecessor will not be released from the obligation to pay
the principal of and interest on the Discount Notes.
900.
ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, Holdings and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or inconsistency;
or
(ii) to provide for uncertificated Discount Notes in addition
to or in place of certificated Discount Notes (provided that the
uncertificated Discount Notes are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the uncertificated
Discount Notes are described in Section 163(f)(2)(B) of the Code); or
(iii) to add Guarantees with respect to the Discount Notes; or
(iv) to provide for the assumption by a successor corporation,
partnership, trust or limited liability company of the obligations of
Holdings hereunder; or
(v) to secure the Discount Notes; or
(vi) to add to the covenants of Holdings for the benefit of the
Holders or to surrender any right or power conferred upon Holdings; or
(vii) to make any other change that does not adversely affect
the rights of any Holder; or
68
(viii) to comply with any requirement of the SEC in connection
with the qualification of this Indenture under the Trust Indenture Act.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of at least a majority in principal
amount of the outstanding Discount Notes (including consents obtained in
connection with a tender offer or exchange offer for the Discount Notes),
Holdings, and the Trustee may enter into an indenture or indentures supplemental
hereto 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 under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
outstanding Discount Note affected thereby (with respect to any Discount Notes
held by a nonconsenting Holder of the Discount Notes):
(i) reduce the amount of Discount Notes whose Holders must
consent to an amendment; or
(ii) reduce the stated rate of or extend the stated time for
payment of interest on any Discount Note; or
(iii) reduce the principal of or extend the Stated Maturity of
any Discount Note; or
(iv) reduce the premium payable upon the redemption or
repurchase of any Discount Note or change the time at which any Note may be
redeemed as described in Section 1101; or
(v) make any Discount Note payable in money other than that
stated in the Discount Note; or
(vi) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Discount Notes on or after the
due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Discount Notes; or
(vii) make any change in the amendment provisions which
require each Holder's consent or in the waiver provisions.
The consent of the Holders is not necessary under this Indenture to
approve the particular form of any proposed amendment or supplemental indenture.
It is sufficient if such consent approves the substance of the proposed
amendment or supplemental indenture.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities, as determined by the Trustee in its sole discretion under this
Indenture or otherwise. In signing or refusing to sign any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture.
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SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Discount Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby (except as provided in Section 902).
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Discount Notes to Supplemental Indentures.
------------------------------------------------------
Discount Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If Holdings or the Trustee shall
so determine, new Discount Notes so modified as to conform to any such
supplemental indenture may be prepared and executed by Holdings, and Holdings
shall issue and the Trustee shall authenticate a new Discount Note that reflects
the changed terms, the cost and expense of which will be borne by Holdings in
exchange for outstanding Discount Notes.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by Holdings and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, Holdings shall
give notice thereof to the Holders of each outstanding Discount Note affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture. The failure to give such notice to
all the Holders, or any defect therein, will not impair or affect the validity
of the supplemental indenture.
1000. ARTICLE TEN. COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
---------------------------------------------------
Holdings covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium, if any) and interest
on the Discount Notes in accordance with the terms of the Discount Notes and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
Holdings will maintain in The City of New York, an office or agency
where the Discount Notes may be presented or surrendered for payment, where, if
applicable, the Discount Notes may be surrendered for registration of transfer
or exchange and where notices and demands to or upon Holdings in respect of the
Discount Notes and this Indenture may be served. The corporate trust office of
the Trustee c/o State Street Bank and Trust Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ shall be such office or agency of Holdings, unless Holdings
shall designate and maintain some other office or agency for one or more of such
purposes. Holdings will give prompt written notice to the Trustee of any change
in the location of any such office or agency. If at any time Holdings shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may
70
be made or served at the Corporate Trust Office of the Trustee, and Holdings
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
Holdings may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Discount
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve Holdings of its obligation
to maintain an office or agency in The City of New York for such purposes.
Holdings will give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
-------------------------------------------
If Holdings shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (or premium, if any) or interest on
any of the Discount Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure to so act.
Whenever Holdings shall have one or more Paying Agents for the
Discount Notes, it will, on or before each due date of the principal of (or
premium, if any) or interest on any Discount Notes, deposit with a Paying Agent
a sum in same day funds (or New York Clearing House funds if such deposit is
made prior to the date on which such deposit is required to be made) that shall
be available to the Trustee by 10:00 a.m. Eastern Standard Time on such due date
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) Holdings will promptly notify the Trustee of such action or any failure
to so act.
Holdings will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(i) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Discount Notes in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by Holdings (or
any other obligor upon the Discount Notes) in the making of any payment of
principal (and premium, if any) or interest; and
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
Holdings may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Authentication Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by Holdings or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by Holdings
or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by Holdings, in trust for the payment of the principal of (or premium, if any)
or interest on any Discount Note and remaining
71
unclaimed for two years after such principal, premium or interest has become due
and payable shall be paid to Holdings on Holdings Request, or (if then held by
Holdings) shall be discharged from such trust; and the Holder of such Discount
Note shall thereafter, as an unsecured general creditor, look only to Holdings
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of Holdings as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment to Holdings, may at the expense
of Holdings cause to be published once, in a leading daily newspaper (if
practicable, The Wall Street Journal (Eastern Edition)) printed in the English
language and of general circulation in New York City, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to Holdings.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, Holdings will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and that of each Restricted Subsidiary and the corporate rights
(charter and statutory) licenses and franchises of Holdings and each Restricted
Subsidiary; provided, however, that Holdings shall not be required to preserve
any such existence (except Holdings) right, license or franchise if the Board of
Directors of Holdings shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Holdings and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
Holdings will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon Holdings or any Subsidiary or upon
the income, profits or property of Holdings or any Subsidiary and (ii) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a material liability or lien upon the property of Holdings or any
Restricted Subsidiary; provided, however, that Holdings shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of Holdings) are being
maintained in accordance with GAAP.
SECTION 1006. [Intentionally Omitted].
-----------------------
SECTION 1007. [Intentionally Omitted].
-----------------------
SECTION 1008. [Intentionally Omitted].
-----------------------
Holdings shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental regulatory authority, in respect of the conduct
of their respective businesses and the ownership of their respective properties,
except for such noncompliances as would not in the aggregate have a material
adverse effect on the financial condition or results of operations of Holdings
and its Restricted Subsidiaries, taken as a whole.
72
SECTION 1009. Limitation on Restricted Payments.
---------------------------------
(a) Holdings shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock except (A) dividends or
distributions payable in its Capital Stock (other than Disqualified Stock) and
(B) dividends or distributions payable to Holdings or a Restricted Subsidiary of
Holdings (and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to
its other holders of Capital Stock on a pro rata basis), (ii) purchase, redeem,
retire or otherwise acquire for value any Capital Stock of Holdings held by
Persons other than a Restricted Subsidiary of Holdings or any Capital Stock of a
Restricted Subsidiary of Holdings held by any Affiliate of Holdings, other than
another Restricted Subsidiary (in either case, other than in exchange for its
Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition) or (iv)
make any Investment (other than a Permitted Investment) in any Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to in clauses (i)
through (iv) as a "Restricted Payment"), if at the time Holdings or such
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); or (2) the Company is
not able to incur an additional $1.00 of Indebtedness pursuant to Section 1011;
or (3) the aggregate amount of such Restricted Payment and all other Restricted
Payments declared or made subsequent to the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income (x) of Holdings in the case of any
Restricted Payment made by Holdings or (y) of the Company and its Restricted
Subsidiaries in the case of any Restricted Payment made by the Company or any of
its Restricted Subsidiaries accrued during the period (treated as one accounting
period) from, but excluding, the Issue Date to, but excluding, the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit); (B) the aggregate net proceeds, including the fair
market value of property other than cash (determined in good faith by the Board
of Directors as evidenced by a certificate filed with the Trustee, except that
in the event the value of any non-cash consideration shall be $10 million or
more, the value shall be as determined in writing by an Independent Appraiser)
received by Holdings from the issue or sale of its Capital Stock (other than
Disqualified Stock) or other capital contributions subsequent to the Issue Date
(other than net proceeds received from an issuance or sale of such Capital Stock
to a Subsidiary of Holdings or an employee stock ownership plan or similar trust
to the extent such sale to an employee stock ownership plan or similar trust is
financed by loans from Holdings or any Restricted Subsidiary unless such loans
have been repaid with cash on or prior to the date of determination); (C) the
amount by which Indebtedness of Holdings is reduced on Holdings' balance sheet
upon the conversion or exchange (other than by a Subsidiary of Holdings)
subsequent to the Issue Date of any Indebtedness of Holdings convertible or
exchangeable for Capital Stock of Holdings (less the amount of any cash, or
other property, distributed by Holdings upon such conversion or exchange); (D)
the amount equal to the net reduction in Investments made by Holdings or any of
its Restricted Subsidiaries in any Person resulting from (i) repurchases or
redemptions of such Investments by such Person, proceeds realized upon the sale
of such Investment to an unaffiliated purchaser, repayments of loans or advances
or other transfers of assets (including by way of dividend or distribution) by
such Person to Holdings or any Restricted Subsidiary of Holdings or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of "Investment") not to exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments previously made
by Holdings or any Restricted Subsidiary in such Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments;
provided, however, that no amount shall be included under this clause (D) to the
extent it is already included in Consolidated Net Income.
73
(b) The provisions of paragraph (a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of Holdings
or any Restricted Subsidiary made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of Holdings (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans from
Holdings or any Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); provided, however, that (A) such
purchase or redemption shall be excluded in subsequent calculations of the
amount of Restricted Payments and (B) the aggregate net proceeds from such sale
shall be excluded from clause (3) (B) of paragraph (a); (ii) any purchase or
redemption of Subordinated Obligations of Holdings made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Subordinated
Obligations of Holdings; provided, however, that such purchase or redemption
shall be excluded in subsequent calculations of the amount of Restricted
Payments; (iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 1016; provided, however,
that such purchase or redemption shall be excluded in subsequent calculations of
the amount of Restricted Payments; (iv) dividends paid within 60 days after the
date of declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividend shall be
included in subsequent calculations of the amount of Restricted Payments; (v)
payments for the purpose of, and in amounts equal to, amounts required to permit
Holdings to redeem or repurchase Capital Stock of Holdings or the Parent from
existing or former employees or management of Holdings or any Parent thereof or
any Subsidiary or their assigns, estates or heirs, in each case in connection
with the repurchase provisions under employee stock option or stock purchase
agreements or other agreements to compensate management employees; provided that
such redemption or repurchases pursuant to this clause shall not exceed $5.0
million (and such maximum amount shall be increased by the amount of any
proceeds to the Company, Parent or Holdings from (x) sales of Capital Stock of
Holdings to management employees subsequent to the Issue Date and (y) any "key-
man" life insurance policies which are used to make such redemptions or
repurchases) in the aggregate; provided, however, that such payments shall be
included in the calculation of the amount of Restricted Payments; provided,
further, that the cancellation of Indebtedness owing to Holdings, any Parent
thereof or the Company from members of management in connection with a
repurchase of Capital Stock of Holdings, Parent or the Company will not be
deemed to constitute a Restricted Payment under the Indenture; (vi) loans or
advances made after the Issue Date to employees or directors of Holdings, Parent
or any Subsidiary the proceeds of which are used to purchase Capital Stock of
Holdings or any Parent thereof, in an aggregate amount not in excess of $1.0
million at any one time outstanding; provided, however, that such payments shall
be included in the calculation of the amount of Restricted Payments; (vii) cash
dividends to the Parent, if any, in amounts equal to (A) the amounts required
for Holdings or the Parent to pay any Federal, state or local income taxes to
the extent that such income taxes are attributable to the income of Holdings and
its Subsidiaries, (B) the amounts required for Holdings or the Parent to pay
franchise taxes and other fees required to maintain its legal existence, (C) an
amount not to exceed $250,000 in any fiscal year to permit Holdings or the
Parent to pay its corporate overhead expenses incurred in the ordinary course of
business, and to pay salaries or other compensation of employees who perform
services for both the Parent and Holdings, (D) so long as no Default or Event of
Default shall have occurred and be continuing, an amount not to exceed $100,000
in the aggregate, to enable Holdings or the Parent to make payments to holders
of its Capital Stock in lieu of issuance of fractional shares of its Capital
Stock; provided, however, that such payments shall not be included in the
calculation of the amount of Restricted Payments, and (E) the amounts required
for Parent to make indemnification payments under the Recapitalization
Agreement; and (viii) repurchases of Capital Stock deemed to occur upon the
exercise of stock options if such Capital Stock represents a portion of the
exercise price hereof; provided, however, that such repurchases shall not be
included in the calculation of the amount of Restricted Payments.
(c) Not later than the date of making any Restricted Payment, Holdings
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the
74
basis upon which the calculations required by this Section 1009 were computed,
which calculations may be based upon Holdings' latest available financial
statements. The Trustee shall have no duty to recompute or recalculate or verify
the accuracy of the information set forth in such Officers' Certificate.
(d) Holdings will not permit any Unrestricted Subsidiary to become a
Restricted Subsidiary except in compliance with the second to last sentence of
the definition of "Unrestricted Subsidiary."
SECTION 1010. Limitation on Indebtedness by Holdings.
--------------------------------------
Holdings shall not Incur any Indebtedness, other than the Indebtedness
represented by (i) the Discount Notes, (ii) the Guarantee of the Bank
Indebtedness, and (iii) Indebtedness of Holdings owing to and held by any
Wholly-Owned Subsidiary if such Indebtedness is subordinated in right of payment
to the Discount Notes and the proceeds thereof are not used to pay dividends to
Holdings' stockholders; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any such
Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to Holdings or a Wholly-
Owned Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by Holdings.
SECTION 1011. Limitation on Indebtedness by the Company.
-----------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness; provided, however, that the Company and
its Restricted Subsidiaries may Incur Indebtedness if on the date thereof the
Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is
at least (i) 2.00 to 1.00, if such Indebtedness is Incurred on or prior to the
second anniversary of the Issue Date and (ii) 2.25 to 1.00, if such Indebtedness
is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to the Senior Credit Agreement; provided, however, that the
aggregate principal amount of all Indebtedness Incurred pursuant to this clause
(i) does not exceed $160 million at any time outstanding, less the aggregate
principal amount of all mandatory prepayments of principal thereof with the
proceeds of Asset Dispositions; (ii) the Subsidiary Guarantees and Guarantees of
Indebtedness Incurred pursuant to clause (i); (iii) Indebtedness of the Company
owing to and held by any Wholly-Owned Subsidiary or Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Wholly-Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital Stock
or any other event which results in any such Wholly-Owned Subsidiary ceasing to
be a Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer thereof;
(iv) Indebtedness represented by (x) the Senior Subordinated Notes, (y) any
Indebtedness (other than the Indebtedness described in clauses (i), (ii) and
(iii)) outstanding on the Issue Date and (z) any Refinancing Indebtedness
Incurred in respect of any Indebtedness described in this clause (iv) or clause
(v) or Incurred pursuant to paragraph (a) of this Section; (v) Indebtedness of a
Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company (other than Indebtedness Incurred to provide all or any portion of the
funds utilized to consummate the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Subsidiary or was
otherwise acquired by the Company); provided, however, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have been
able to Incur $1.00 of additional Indebtedness under this Section 1011 after
giving effect to the Incurrence of such Indebtedness pursuant to this clause
(v); (vi) Indebtedness under Currency Agreements and Interest Rate Agreements;
provided, however, that in the case of Currency Agreements and Interest Rate
Agreements, such Currency Agreements and Interest Rate Agreements are
75
entered into for bona fide hedging purposes of the Company or its Restricted
Subsidiaries (as determined in good faith by the Board of Directors or senior
management of the Company) and correspond in terms of notional amount, duration,
currencies and interest rates, as applicable, to Indebtedness of the Company or
its Restricted Subsidiaries Incurred without violation of the Indenture or to
business transactions of the Company or its Restricted Subsidiaries on customary
terms entered into in the ordinary course of business; (vii) Indebtedness of
foreign Restricted Subsidiaries under working capital facilities; provided that
the aggregate principal amount of such Indebtedness outstanding at any time does
not exceed 5% of Consolidated Tangible Assets; (viii) Indebtedness (including
Capital Lease Obligations) incurred by the Company or any of its Restricted
Subsidiaries to finance the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets) in an aggregate principal amount
outstanding not to exceed the greater of (A) $5.0 million or (B) 5% of
Consolidated Tangible Assets at the time of any Incurrence thereof (including
any Refinancing Indebtedness with respect thereto); (ix) Indebtedness incurred
by the Company or any of its Restricted Subsidiaries constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including, without limitation, letters of credit in respect of
workers' compensation claims or self-insurance, or other Indebtedness with
respect to reimbursement type obligations regarding workers' compensation
claims; (x) Indebtedness arising from agreements of the Company or a Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase
price, earn out or other similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or a Restricted
Subsidiary of the Company, provided that the maximum liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition; (xi) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary of
the Company in the ordinary course of business; and (xii) Indebtedness (other
than Indebtedness described in clauses (i) through (xi)) in a principal amount
which, when taken together with the principal amount of all other Indebtedness
Incurred pursuant to this clause (xii) and then outstanding, will not exceed the
greater of (A) $5.0 million or (B) 5% of Consolidated Tangible Assets.
SECTION 1012. Limitation on Affiliate Transactions.
------------------------------------
(a) Holdings will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or conduct any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of Holdings (an "Affiliate
Transaction") unless: (i) the terms of such Affiliate Transaction are no less
favorable to Holdings or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate; (ii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $2 million, the
terms of such transaction have been approved by a majority of the members of the
Board of Directors of Holdings and by a majority of the members of such Board
having no personal stake in such transaction, if any (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in (i) above); and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $15 million, Holdings has
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Affiliate Transaction is not materially
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arms-length basis from a Person that
is not an Affiliate.
(b) The foregoing paragraph (a) shall not apply to (i) any Restricted
Payment permitted to be made pursuant to Section 1009, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors of Holdings, (iii) the
payment of compensation and directors' fees and the performance of
indemnification or contribution obligations in the ordinary course of
76
business, (iv) loans or advances to employees in the ordinary course of business
of Holdings or any of its Restricted Subsidiaries, (v) the execution, delivery
and performance of the Management Agreement, or (vi) any transaction between
Holdings and a Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries.
SECTION 1013. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
Holdings will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to Holdings, (ii) make
any loans or advances to Holdings or (iii) transfer any of its property or
assets to Holdings, except (a) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the date of the Indenture (including,
without limitation, the Senior Credit Agreement and the Senior Subordinated
Notes); (b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by a
Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by Holdings (other than Indebtedness Incurred to provide
all or any portion of the funds utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by Holdings) and outstanding on
such date; (c) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement effecting a refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (a) or (b) of this
covenant or this clause (c) or contained in any amendment to an agreement
referred to in clause (a) or (b) of this covenant or this clause (c); provided,
however, that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such agreement or amendment are no less favorable to
the Holders of the Discount Notes than encumbrances and restrictions contained
in such agreements; (d) in the case of clause (iii) above, any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of Holdings or any
Restricted Subsidiary not otherwise prohibited by the Indenture, (C) contained
in mortgages, pledges or other security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements or (D) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of Holdings or any Restricted Subsidiary; (e) any restriction with
respect to a Restricted Subsidiary (or any of its property or assets) imposed
pursuant to an agreement entered into for the direct or indirect sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; (f) encumbrances
or restrictions arising or existing by reason of applicable law; (g) any
restrictions pursuant to the Indenture and the Senior Subordinated Notes; (h)
restrictions imposed by any agreement or instrument governing Capital Stock of
any Person that is acquired; and (i) restrictions on cash or other deposits or
net worth imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 1014. Limitation on the Sale or Issuance of Preferred Stock
-----------------------------------------------------
of Restricted Subsidiaries.
--------------------------
Holdings shall not sell any shares of Preferred Stock of a Restricted
Subsidiary and shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its Preferred Stock to any Person
(other than to Holdings or a Wholly-Owned Subsidiary).
SECTION 1015. Change of Control.
-----------------
77
(a) Upon the occurrence of a Change of Control, unless Holdings shall
have exercised its right to redeem the Discount Notes as described in Section
1101, each holder will have the right to require Holdings to repurchase all or
any part of such holder's Discount Notes at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) or, in the case of purchases of Discount Notes prior to November 15, 2002,
at a purchase price equal to 101% of the Accreted Value thereof as of the date
of purchase.
(b) Within 30 days following any Change of Control, unless Holdings
has mailed a redemption notice with respect to all the outstanding Discount
Notes in connection with such Change of Control as described in Section 1105,
Holdings shall mail a notice to each holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such
holder has the right to require Holdings to purchase such holder's Discount
Notes at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase (subject to
the right of holders of record on a record date to receive interest on the
relevant interest payment date) or, in the case of purchases of Discount Notes
prior to November 15, 2002, at a purchase price equal to 101% of the Accreted
Value thereof as of the date of purchase;
(ii) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(iii) the procedures determined by Holdings, consistent with
the Indenture, that a holder must follow in order to have its Discount Notes
purchased.
(c) Holdings will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Discount Notes pursuant to
this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the Indenture, Holdings will comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in the Indenture by virtue thereof.
SECTION 1016. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless (i) Holdings or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value, as determined in good faith
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition, (ii)
at least 75% of the consideration thereof received by Holdings or such
Restricted Subsidiary is in the form of cash or Cash Equivalents and (iii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by Holdings (or such Restricted Subsidiary, as the case may be) (A)
first, to the extent Holdings or any Restricted Subsidiary, as the case may be,
-----
elects (or is required by the terms of any Senior Indebtedness), to prepay,
repay or purchase Senior Indebtedness or Indebtedness (other than any Preferred
Stock) of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed
to Holdings or an Affiliate of Holdings) within 180 days from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash; (B)
second, to the extent of the balance of such Net Available Cash after
------
application in accordance with clause (A), at Holdings' election to the
investment in Additional Assets within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; (C) third, to
-----
the extent of the balance of such Net Available Cash after application and in
accordance with clauses (A) and (B), to make an offer to purchase Senior
Subordinated Notes and other pari passu debt obligations
78
subject to a similar covenant at par plus accrued and unpaid interest, if any,
thereon; (D) fourth, to make an offer to purchase (an "Offer") the Discount
------
Notes at a price in cash equal to, prior to November 15, 2002, 100% of the
Accreted Value thereof on the purchase date and, thereafter, 100% of the
Accreted Value thereof plus accrued and unpaid interest to the purchase date;
and (E) fifth, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A), (B), (C) and (D), for other general
corporate purposes not prohibited by the Indenture; provided, however, that, in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (A) above, Holdings or such Restricted Subsidiary shall retire such
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. Notwithstanding the foregoing provisions, Holdings and its
Restricted Subsidiaries shall not be required to apply any Net Available Cash in
accordance herewith except to the extent that the aggregate Net Available Cash
from all Asset Dispositions which are not applied in accordance with this
covenant exceed $5 million. Holdings shall not be required to make an Offer for
the Discount Notes pursuant to this covenant if the Net Available Cash available
therefor (after application of the proceeds as provided in clauses (A), (B) and
(C)) are less than $5 million for any particular Asset Disposition (which lesser
amounts shall be carried forward for purposes of determining whether an Offer is
required with respect to the Net Available Cash from any subsequent Asset
Disposition).
(b) For the purposes of this covenant, the following will be deemed
to be cash: (x) the assumption by the transferee of Indebtedness of any
Restricted Subsidiary of Holdings and the release of Holdings or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition (in which case Holdings shall, without further action, be deemed to
have applied such assumed Indebtedness in accordance with clause (A) of the
preceding paragraph), (y) securities received by Holdings or any Restricted
Subsidiary of Holdings from the transferee that are promptly converted by
Holdings or such Restricted Subsidiary into cash and (z) any Designated Noncash
Consideration received by Holdings or any of its Restricted Subsidiaries in such
Asset Disposition having an aggregate fair market value, taken together with all
other Designated Noncash Consideration received pursuant to this clause (z) that
is at that time outstanding, not to exceed 10% of Consolidated Tangible Assets
at the time of the receipt of such Designated Noncash Consideration (with the
fair market value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to subsequent changes in
value).
(c) In the event of an Asset Disposition that requires the purchase
of Discount Notes pursuant to clause (a)(iii)(C), Holdings will be required to
purchase Discount Notes tendered pursuant to an offer by Holdings for the
Discount Notes at a price in cash equal to, prior to November 15, 2002, 100% of
the Accreted Value thereof on the purchase date and, thereafter, 100% of the
Accreted Value thereof plus accrued and unpaid interest, if any, to the purchase
date in accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. If the aggregate purchase price of
the Discount Notes tendered pursuant to the offer is less than the Net Available
Cash allotted to the purchase of the Discount Notes, Holdings will apply the
remaining Net Available Cash in accordance with clause (a)(iii)(E) above.
(d) Holdings will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Discount Notes pursuant to
the Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, Holdings will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Indenture by virtue thereof.
SECTION 1017. SEC Reports.
-----------
Notwithstanding that Holdings may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted
by the Exchange Act, Holdings will file with the SEC and provide, within 15 days
after Holdings is required to file the same with the SEC, the Trustee and the
79
holders of the Discount Notes with the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that are specified in Section
13 or 15(d) of the Exchange Act. In the event that Holdings is not permitted to
file such reports, documents and information with the SEC pursuant to the
Exchange Act, Holdings will nevertheless deliver such Exchange Act information
to the holders of the Discount Notes as if Holdings were subject to the
reporting requirements of Section 13 and 15(d) of the Exchange Act.
SECTION 1018. Limitation on Lines of Business.
-------------------------------
Holdings will not, and will not permit any Restricted Subsidiary to,
engage in any business other than a Related Business.
SECTION 1019. Statement by Officers as to Default.
-----------------------------------
(a) Holdings will deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of Holdings and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing officers with a
view to determining whether it has kept, observed, performed and fulfilled, and
has caused each of its Restricted Subsidiaries to keep, observe, perform and
fulfill its obligations under this Indenture and further stating, as to each
such officer signing such certificate, that, to the best of his or her
knowledge, Holdings during such preceding fiscal year has kept, observed,
performed and fulfilled, and has caused each of its Restricted Subsidiaries to
keep, observe, perform and fulfill each and every such covenant contained in
this Indenture and no Default or Event of Default occurred during such year and
at the date of such certificate there is no Default or Event of Default which
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe its status, with particularity
and that, to the best of his or her knowledge, no event has occurred and remains
by reason of which payments on the account of the principal of or interest, if
any, on the Discount Notes is prohibited or if such event has occurred, a
description of the event and what action each is taking or proposes to take with
respect thereto. The Officers' Certificate shall also notify the Trustee should
Holdings elect to change the manner in which it fixes its fiscal year end. For
purposes of this Section 1019(a), such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of Holdings or any Significant Subsidiary gives any notice or takes
any other action with respect to a claimed Default (other than with respect to
Indebtedness in the principal amount of less than $10 million), Holdings shall
deliver to the Trustee by registered or certified mail or facsimile transmission
an Officers' Certificate specifying such event, notice or other action within
five Business Days of its occurrence.
1100. ARTICLE ELEVEN. REDEMPTION OF DISCOUNT NOTES
SECTION 1101. Optional Redemption.
-------------------
The Discount Notes may or shall, as the case may be, be redeemed, as a
whole or from time to time in part, subject to the conditions and at the
Redemption Prices specified in the Form of Discount Note (Section 204), together
with accrued interest to the redemption date.
SECTION 1102. Applicability of Article.
------------------------
80
Redemption of Discount Notes at the election of Holdings or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of Holdings to redeem any Discount Notes pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of Holdings, Holdings shall, at least 90 days prior
to the Redemption Date fixed by Holdings (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of (or in the case of redemption prior to November 15,
2002, the Accreted Value of) Discount Notes to be redeemed and shall deliver to
the Trustee such documentation and records as shall enable the Trustee to select
the Discount Notes to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Discount Notes to Be Redeemed.
-----------------------------------------------------
If less than all the Discount Notes are to be redeemed at any time
pursuant to an optional redemption, the particular Discount Notes to be redeemed
shall be selected not more than 90 days prior to the Redemption Date by the
Trustee, from the outstanding Discount Notes not previously called for
redemption, in compliance with the requirements of the principal securities
exchange, if any, on which such Discount Notes are listed, or, if such Discount
Notes are not so listed, on a pro rata basis, by lot or by such other method as
the Trustee shall deem fair and appropriate (and in such manner as complies with
applicable legal requirements) and which may provide for the selection for
redemption of portions of the principal of (or Accreted Value of) the Discount
Notes; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of (or Accreted Value of) a Discount Note not
redeemed to less than $1,000.
The Trustee shall promptly notify Holdings in writing of the Discount
Notes selected for redemption and, in the case of any Discount Notes selected
for partial redemption, the principal amount thereof (or Accreted Value thereof)
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Discount Notes shall relate,
in the case of any Discount Note redeemed or to be redeemed only in part, to the
portion of the principal amount of (or Accreted Value of) such Discount Note
which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 90 days prior to the Redemption Date,
to each Holder of Discount Notes to be redeemed. The Trustee shall give notice
of redemption in Holdings' name and at Holdings' expense; provided, however,
that Holdings shall deliver to the Trustee, at least 45 days prior to the
Redemption Date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the following items.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price and the amount of accrued interest
to the Redemption Date payable as provided in Section 1107, if any,
81
(iii) if less than all outstanding Discount Notes are to be
redeemed, the identification of the particular Discount Notes (or portion
thereof) to be redeemed, as well as the aggregate principal amount of (or
Accreted Value of) Discount Notes to be redeemed and the aggregate
principal amount of (or Accreted Value of) Discount Notes to be outstanding
after such partial redemption,
(iv) in case any Discount Note is to be redeemed in part
only, the notice which relates to such Discount Note shall state that on
and after the Redemption Date, upon surrender of such Discount Note, the
holder will receive, without charge, a new Discount Note or Discount Notes
of authorized denominations for the principal amount thereof (or Accreted
Value thereof) remaining unredeemed,
(v) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Discount Note, or
the portion thereof, to be redeemed, and, unless Holdings defaults in
making the redemption payment, that interest on Discount Notes called for
redemption (or the portion thereof) will cease to accrue on and after said
date,
(vi) the place or places where such Discount Notes are to be
surrendered for payment of the Redemption Price and accrued interest, if
any,
(vii) the name and address of the Paying Agent,
(viii) that Discount Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price,
(ix) the CUSIP number, and that no representation is made as
to the accuracy or correctness of the CUSIP number, if any, listed in such
notice or printed on the Discount Notes, and
(x) the paragraph of the Discount Notes or Section of the
Indenture pursuant to which the Discount Notes are to be redeemed.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, Holdings shall deposit with the Trustee
or with a Paying Agent (or, if Holdings is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and accrued interest on, all the
Discount Notes which are to be redeemed on that date.
SECTION 1107. Discount Notes Payable on Redemption Date.
-----------------------------------------
Notice of redemption having been given as aforesaid, the Discount
Notes so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified (together with accrued interest, if any,
to the Redemption Date), and from and after such date (unless Holdings shall
default in the payment of the Redemption Price and accrued interest) such
Discount Notes shall cease to bear interest. Upon surrender of any such
Discount Note for redemption in accordance with said notice, such Discount Note
shall be paid by Holdings at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Discount Notes, or one or more Predecessor
Discount Notes, registered as such at the close of business on the relevant
Regular Record Date or Special Record Date, as the case may be, according to
their terms and the provisions of Section 311.
82
If any Discount Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Discount Notes.
SECTION 1108. Discount Notes Redeemed in Part.
-------------------------------
Any Discount Note which is to be redeemed only in part (pursuant to
the provisions of this Article) shall be surrendered at the office or agency of
Holdings maintained for such purpose pursuant to Section 1002 (with, if Holdings
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to Holdings and the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing), and
Holdings shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Note at the expense of Holdings, a new Discount Note or Discount
Notes, of any authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Discount Note so surrendered, provided, that each such
new Note will be in a principal amount of $1,000 or integral multiple thereof.
1200.
ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Holdings' Option to Effect Legal Defeasance or Covenant
-------------------------------------------------------
Defeasance.
----------
Holdings may, at its option, at any time, with respect to the Discount
Notes, elect to have either Section 1202 or Section 1203 be applied to all
outstanding Discount Notes upon compliance with the conditions set forth in this
Article Twelve. Holdings in its sole discretion can defease the Discount Notes.
SECTION 1202. Legal Defeasance and Discharge.
------------------------------
Upon Holdings' exercise under Section 1201 of the option applicable to
this Section 1202, Holdings shall be deemed to have been discharged from its
obligations with respect to all outstanding Discount Notes on the date the
conditions set forth in Section 1204 are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that Holdings shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Discount Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 1205 and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Discount Notes and this Indenture insofar as such
Discount Notes are concerned (and the Trustee, at the expense of Holdings, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Discount Notes to receive, solely from the
trust fund described in Section 1204 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any, on) and
interest on such Discount Notes when such payments are due, (ii) Holdings'
obligations with respect to such Discount Notes under Sections 304, 305, 310,
1002 and 1003, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and Holdings' obligations in connection therewith and (iv)
this Article Twelve.
If Holdings exercises its Legal Defeasance Option, payment of the
Discount Notes may not be accelerated because of an Event of Default.
Subject to compliance with this Article Twelve, Holdings may exercise
its option under this Section 1202 notwithstanding the prior exercise of its
option under Section 1203 with respect to the Discount Notes.
SECTION 1203. Covenant Defeasance.
-------------------
83
Upon Holdings' exercise under Section 1201 of the option applicable to
this Section 1203, Holdings may terminate (i) its obligations under any covenant
contained in Sections 1004 through 1019, (ii) the operation of Section 501(v),
Section 501(vi) (with respect only to Significant Subsidiaries), Section
501(vii) (with respect only to Significant Subsidiaries) and 501(viii) and (iii)
the limitations contained in Sections 801(a)(iii) with respect to the
outstanding Discount Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Discount Notes shall
thereafter be deemed not to be "outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Discount Notes will not be outstanding for accounting purposes). If Holdings
exercises its covenant defeasance option, payment of the Discount Notes may not
be accelerated because of an Event of Default specified under Section 501(iii),
(v), (vi) (with respect only to Significant Subsidiaries), (vii) (with respect
only to Significant Subsidiaries) and (viii) or because of the failure of
Holdings to comply with Section 801(a)(iii). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Discount Notes, Holdings
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 501(iii), but, except as specified above,
the remainder of this Indenture and such Discount Notes shall be unaffected
thereby.
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance.
-----------------------------------------------------
The following shall be the conditions to application of either Section
1202 or Section 1203 to the outstanding Discount Notes:
(i) Holdings shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of this Indenture who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust money or
Government Obligations, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants
selected by Holdings, to pay the principal of, premium, if any, and
interest due on the outstanding Discount Notes on the Stated Maturity or on
the applicable Redemption Date as the case may be, of such principal,
premium, if any, or interest on the outstanding Discount Notes;
(ii) in the case of Legal Defeasance, Holdings shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee (which opinion may be subject to
customary assumptions and exclusions) confirming that (A) Holdings has
received from, or there has been published by, the United States Internal
Revenue Service a ruling or (B) since the Issue Date, there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel in the United States
(which opinion may be subject to customary assumptions and exclusions)
shall confirm that the Holders of the outstanding Discount Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Legal Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, Holdings shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the outstanding Discount Notes
will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Covenant
84
Defeasance and will be subject to such tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 123rd day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
Holdings is a party or by which Holdings is bound;
(vi) Holdings shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. federal or state law, and that the Trustee has a
perfected security interest in such trust funds for the ratable benefit of
the Holders;
(vii) Holdings shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by Holdings
with the intent of defeating, hindering, delaying or defrauding any
creditors of Holdings or others;
(viii) Holdings shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States (which
Opinion of Counsel may be subject to customary assumptions and exclusions)
each stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance, as the case may be, have been
complied with; and
(ix) Holdings shall have delivered to the Trustee the opinion
of a nationally recognized firm of independent public accountants stating
the matters set forth in paragraph (i) above.
SECTION 1205. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
outstanding Discount Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Discount Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including Holdings acting
as its own Paying Agent) as the Trustee may determine, to the Holders of such
Discount Notes of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
Holdings shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1204 or the principal and interest received in respect
thereof.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to Holdings from time to time upon Holdings Request
any money or Government Obligations held by it as provided in Section 1204
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount
85
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance, as applicable, in accordance with this
Article.
SECTION 1206. Reinstatement.
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If the Trustee or any Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 1205 by reason of any legal
proceeding or by any reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then Holdings' obligations under this Indenture and the Discount
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 1202 or 1203, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1205; provided, however, that if Holdings makes any payment of principal of (or
premium, if any) or interest on any Discount Note following the reinstatement of
its obligations, Holdings shall be subrogated to the rights of the Holders of
such Discount Notes to receive such payment from the money and Government
Obligations held by the Trustee or Paying Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
DETAILS HOLDINGS CORP.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Attest:
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President