EXHIBIT 4.1
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TOWN SPORTS INTERNATIONAL, INC.,
as Company
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
INDENTURE
Dated as of October 16, 1997
up to $125,000,000
9 3/4% Senior Notes due 2004
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.08; 7.10;
10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.03
313(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06; 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.06; 4.08;
10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . .2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . .6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.04
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
N.A. means Not Applicable.
_________________
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Incorporation by Reference of TIA. . . . . . . . . . 24
SECTION 1.03 Rules of Construction. . . . . . . . . . . . . . . . 24
ARTICLE TWO
THE NOTES
SECTION 2.01 Form and Dating. . . . . . . . . . . . . . . . . . . 25
SECTION 2.02 Execution and Authentication;
Aggregate Principal Amount . . . . . . . . . . . . 26
SECTION 2.03 Registrar and Paying Agent.. . . . . . . . . . . . . 27
SECTION 2.04 Paying Agent To Hold Assets in Trust.. . . . . . . . 27
SECTION 2.05 Holder Lists.. . . . . . . . . . . . . . . . . . . . 28
SECTION 2.06 Transfer and Exchange. . . . . . . . . . . . . . . . 28
SECTION 2.07 Replacement Notes. . . . . . . . . . . . . . . . . . 29
SECTION 2.08 Outstanding Notes. . . . . . . . . . . . . . . . . . 29
SECTION 2.09 Treasury Notes.. . . . . . . . . . . . . . . . . . . 30
SECTION 2.10 Temporary Notes. . . . . . . . . . . . . . . . . . . 30
SECTION 2.11 Cancellation.. . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12 Defaulted Interest.. . . . . . . . . . . . . . . . . 31
SECTION 2.13 CUSIP Number.. . . . . . . . . . . . . . . . . . . . 32
SECTION 2.14 Deposit of Monies. . . . . . . . . . . . . . . . . . 32
SECTION 2.15 Restrictive Legends. . . . . . . . . . . . . . . . . 32
SECTION 2.16 Book-Entry Provisions for Global Security. . . . . . 34
SECTION 2.17 Special Transfer Provisions. . . . . . . . . . . . . 36
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee.. . . . . . . . . . . . . . . . . 38
SECTION 3.02 Selection of Notes To Be Redeemed. . . . . . . . . . 39
SECTION 3.03 Optional Redemption. . . . . . . . . . . . . . . . . 39
SECTION 3.04 Notice of Redemption.. . . . . . . . . . . . . . . . 40
SECTION 3.05 Effect of Notice of Redemption.. . . . . . . . . . . 42
SECTION 3.06 Deposit of Redemption Price. . . . . . . . . . . . . 42
SECTION 3.07 Notes Redeemed in Part.. . . . . . . . . . . . . . . 42
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ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Notes.. . . . . . . . . . . . . . . . . . 42
SECTION 4.02 Maintenance of Office or Agency. . . . . . . . . . . 43
SECTION 4.03 Corporate Existence. . . . . . . . . . . . . . . . . 43
SECTION 4.04 Payment of Taxes and Other Claims. . . . . . . . . . 43
SECTION 4.05 Maintenance of Properties and Insurance. . . . . . . 44
SECTION 4.06 Compliance Certificate; Notice of Default. . . . . . 44
SECTION 4.07 Compliance with Laws.. . . . . . . . . . . . . . . . 45
SECTION 4.08 Reports to Holders.. . . . . . . . . . . . . . . . . 45
SECTION 4.09 Waiver of Stay, Extension or Usury Laws. . . . . . . 46
SECTION 4.10 Limitation on Restricted Payments. . . . . . . . . . 46
SECTION 4.11 Limitations on Transactions with Affiliates. . . . . 48
SECTION 4.12 Limitation on Incurrence of Additional Indebtedness. 49
SECTION 4.13 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . 50
SECTION 4.14 Change of Control. . . . . . . . . . . . . . . . . . 50
SECTION 4.15 Limitation on Asset Sales. . . . . . . . . . . . . . 52
SECTION 4.16 Limitation on Preferred Stock of Restricted
Subsidiaries.. . . . . . . . . . . . . . . . . . . 57
SECTION 4.17 Limitation on Liens. . . . . . . . . . . . . . . . . 57
SECTION 4.18 Limitation of Guarantees by Restricted Subsidiaries. 57
SECTION 4.19 Limitation on Designations of Unrestricted
Subsidiaries.. . . . . . . . . . . . . . . . . . . 58
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01 Merger, Consolidation and Sale of Assets.. . . . . . 60
SECTION 5.02 Successor Corporation Substituted. . . . . . . . . . 61
ARTICLE SIX
REMEDIES
SECTION 6.01 Events of Default. . . . . . . . . . . . . . . . . . 61
SECTION 6.02 Acceleration.. . . . . . . . . . . . . . . . . . . . 63
SECTION 6.03 Other Remedies.. . . . . . . . . . . . . . . . . . . 64
SECTION 6.04 Waiver of Past Defaults. . . . . . . . . . . . . . . 64
SECTION 6.05 Control by Majority. . . . . . . . . . . . . . . . . 64
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SECTION 6.06 Limitation on Suits. . . . . . . . . . . . . . . . . 65
SECTION 6.07 Right of Holders To Receive Payment. . . . . . . . . 65
SECTION 6.08 Collection Suit by Trustee.. . . . . . . . . . . . . 65
SECTION 6.09 Trustee May File Proofs of Claim.. . . . . . . . . . 66
SECTION 6.10 Priorities.. . . . . . . . . . . . . . . . . . . . . 66
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . 67
SECTION 6.12 Restoration of Rights and Remedies.. . . . . . . . . 67
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee. . . . . . . . . . . . . . . . . . 67
SECTION 7.02 Rights of Trustee. . . . . . . . . . . . . . . . . . 69
SECTION 7.03 Individual Rights of Trustee.. . . . . . . . . . . . 70
SECTION 7.04 Trustee's Disclaimer.. . . . . . . . . . . . . . . . 70
SECTION 7.05 Notice of Default. . . . . . . . . . . . . . . . . . 70
SECTION 7.06 Reports by Trustee to Holders. . . . . . . . . . . . 71
SECTION 7.07 Compensation and Indemnity.. . . . . . . . . . . . . 71
SECTION 7.08 Replacement of Trustee.. . . . . . . . . . . . . . . 72
SECTION 7.09 Successor Trustee by Merger, Etc.. . . . . . . . . . 73
SECTION 7.10 Eligibility; Disqualification. . . . . . . . . . . . 74
SECTION 7.11 Preferential Collection of Claims Against Company. . 74
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Termination of Company's Obligations.. . . . . . . . 74
SECTION 8.02 Application of Trust Money.. . . . . . . . . . . . . 77
SECTION 8.03 Repayment to the Company.. . . . . . . . . . . . . . 78
SECTION 8.04 Reinstatement. . . . . . . . . . . . . . . . . . . . 78
SECTION 8.05 Acknowledgment of Discharge by Trustee.. . . . . . . 79
ARTICLE NINE
MODIFICATION OF THE INDENTURE
SECTION 9.01 Without Consent of Holders.. . . . . . . . . . . . . 79
SECTION 9.02 With Consent of Holders. . . . . . . . . . . . . . . 80
SECTION 9.03 Compliance with TIA. . . . . . . . . . . . . . . . . 81
SECTION 9.04 Revocation and Effect of Consents. . . . . . . . . . 81
SECTION 9.05 Notation on or Exchange of Notes.. . . . . . . . . . 82
SECTION 9.06 Trustee To Sign Amendments, Etc. . . . . . . . . . . 82
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ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01 Unconditional Guarantee. . . . . . . . . . . . . . . 83
SECTION 10.02 Limitations on Guarantees. . . . . . . . . . . . . . 84
SECTION 10.03 Execution and Delivery of Guarantee. . . . . . . . . 85
SECTION 10.04 Release of the Guarantor.. . . . . . . . . . . . . . 85
SECTION 10.05 Waiver of Subrogation. . . . . . . . . . . . . . . . 86
SECTION 10.06 Immediate Payment. . . . . . . . . . . . . . . . . . 87
SECTION 10.07 Obligations Continuing.. . . . . . . . . . . . . . . 87
SECTION 10.08 Obligations Reinstated.. . . . . . . . . . . . . . . 87
SECTION 10.09 Obligations Not Affected.. . . . . . . . . . . . . . 87
SECTION 10.10 Waiver.. . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.11 No Obligation To Take Action Against the Company.. . 88
SECTION 10.12 Dealing with the Company and Others. . . . . . . . . 88
SECTION 10.13 Default and Enforcement. . . . . . . . . . . . . . . 89
SECTION 10.14 Amendment, Etc.. . . . . . . . . . . . . . . . . . . 89
SECTION 10.15 Acknowledgment.. . . . . . . . . . . . . . . . . . . 89
SECTION 10.16 Costs and Expenses.. . . . . . . . . . . . . . . . . 89
SECTION 10.17 No Waiver; Cumulative Remedies.. . . . . . . . . . . 89
SECTION 10.18 Survival of Obligations. . . . . . . . . . . . . . . 90
SECTION 10.19 Guarantee in Addition to Other Obligations.. . . . . 90
SECTION 10.20 Severability.. . . . . . . . . . . . . . . . . . . . 90
SECTION 10.21 Successors and Assigns.. . . . . . . . . . . . . . . 90
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01 TIA Controls.. . . . . . . . . . . . . . . . . . . . 90
SECTION 11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 11.03 Communications by Holders with Other Holders.. . . . 92
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.. 92
SECTION 11.05 Statements Required in Certificate or Opinion. . . . 92
SECTION 11.06 Rules by Trustee, Paying Agent, Registrar. . . . . . 93
SECTION 11.07 Legal Holidays.. . . . . . . . . . . . . . . . . . . 93
SECTION 11.08 Governing Law. . . . . . . . . . . . . . . . . . . . 93
SECTION 11.09 No Adverse Interpretation of Other Agreements. . . . 93
SECTION 11.10 No Personal Liability. . . . . . . . . . . . . . . . 93
SECTION 11.11 Successors.. . . . . . . . . . . . . . . . . . . . . 94
SECTION 11.12 Duplicate Originals. . . . . . . . . . . . . . . . . 94
SECTION 11.13 Severability.. . . . . . . . . . . . . . . . . . . . 94
SECTION 11.14 Independence of Covenants. . . . . . . . . . . . . . 94
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Exhibit A - Form of Initial Note. . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Exchange Note . . . . . . . . . . . . . . . . . B-1
Exhibit C - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors . . . . . . . C-1
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S. . . . . . . . . . . D-1
Exhibit E - Form of Guarantee . . . . . . . . . . . . . . . . . . . E-1
Note: This Table of Contents shall not, for any purpose, be
deemed to be part of this Indenture
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INDENTURE, dated as of October 16, 1997, between TOWN SPORTS
INTERNATIONAL, INC., a New York corporation (the "Company"), and UNITED STATES
TRUST COMPANY OF NEW YORK, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the Holders of the
Company's 9 3/4% Senior Notes due 2004 Series A (the "Initial Notes") and,
when and if issued as provided in the Registration Rights Agreement of even
date herewith, the Company's 9 3/4% Senior Notes due 2004 Series B (the
"Exchange Notes" and together with the Initial Notes, the "Notes").
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or
any of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with the Company or any
of the Restricted Subsidiaries or assumed in connection with the acquisition
of assets from such Person and in each case not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming
a Restricted Subsidiary or such acquisition, merger or consolidation.
"ADDITIONAL INTEREST" shall have the meaning set forth in
the Registration Rights Agreement.
"AFFILIATE" means, with respect to any specified Person,
any other Person who directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"AFFILIATE TRANSACTION" has the meaning provided in
Section 4.11.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGENT MEMBERS" has the meaning provided in Section 2.16.
"APPLICABLE PREMIUM" means, with respect to a Note at any
Redemption Date, the greater of (i) 1.0% of the principal amount of such Note
and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Note at October 15, 2002 (such redemption price
being described in Section 3.03) plus (2) all required interest payments
(excluding accrued but unpaid interest) due on such Note through ,
2002, computed using a discount rate equal to the Treasury Rate plus 75 basis
points, over (B) the principal amount of such Note.
"ASSET ACQUISITION" means (a) an Investment by the
Company or any Restricted Subsidiary in any other Person pursuant to which
such Person shall become a Restricted Subsidiary or shall be merged with or
into the Company or any Restricted Subsidiary, or (b) the acquisition by the
Company or any Restricted Subsidiary of the assets of any Person (other than
a Restricted Subsidiary) which constitute all or substantially all of the
assets of such Person or comprise any division or line of business of such
Person or any other properties or assets of such Person other than in the
ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and
Leaseback Transaction) to any Person other than the Company or a Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted
Subsidiary or (b) any other property or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business;
PROVIDED that Asset Sales shall not include (i) a transaction or series of
related transactions for which the Company or its Restricted Subsidiaries
receive aggregate consideration of less than $1 million, (ii) the sale,
lease, conveyance, disposition or other transfer of all or substantially all
of the assets of the Company as permitted under Section 5.01, (iii) disposals
or replacements of obsolete equipment in the ordinary course of business,
(iv) the sale, lease, conveyance, disposition or other transfer by the
Company or any Restricted Subsidiary of assets or property to the Company or
one or more Restricted Subsidiaries and (v) any Restricted Payment.
"AUTHENTICATING AGENT" has the meaning provided in
Section 2.02.
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"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, as to any Person, the board
of directors of such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a
copy of a resolution certified by the secretary or an assistant secretary of
such Person to have been duly adopted by the Board of Directors of such
Person and to be in full force and effect on the date of such certification
and delivered to the Trustee.
"BRS GROUP" means Bruckman, Rosser, ▇▇▇▇▇▇▇▇ & Co., Inc.
and its Affiliates.
"BUSINESS DAY" means any day other than a Saturday,
Sunday or any other day on which commercial banking institutions in the City
of New York are required or authorized by law or other governmental action to
be closed.
"CAPITAL STOCK" means (i) with respect to any Person that
is a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate
stock, including each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person,
the obligations of such Person under a lease that are required to be
classified and accounted for as capital lease obligations under GAAP and, for
purposes of this definition, the amount of such obligations at any date shall
be the capitalized amount of such obligations at such date, determined in
accordance with GAAP.
"CASH EQUIVALENTS" means (i) marketable direct
obligations issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition thereof; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition, having
one of the two highest ratings obtainable from either Standard & Poor's
Corporation ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
commercial
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paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from S&P or at least
P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than
$250,000,000; (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv) above;
and (vi) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"CERTIFICATED SECURITIES" means Notes in definitive
registered form.
"CHANGE OF CONTROL" means the occurrence of one or more
of the following events: (i) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or group of related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group"), together with
any Affiliates thereof (whether or not otherwise in compliance with the
provisions of this Indenture); (ii) the approval by the holders of the
Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company (whether or not otherwise in compliance with the
provisions of this Indenture); (iii) any Person or Group, other than a
Permitted Holder, shall become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company; or (iv) the replacement of a majority of the
Board of Directors of the Company over a two-year period from the directors
who constituted the Board of Directors of the Company at the beginning of
such period, and such replacement shall not have been approved by a vote of
at least a majority of the Board of Directors of the Company then still in
office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved.
"CHANGE OF CONTROL OFFER" has the meaning provided in
Section 4.14.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning provided in
Section 4.14.
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"COMMISSION" means the U.S. Securities and Exchange
Commission.
"COMMON STOCK" of any Person means any and all shares,
interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of such Person's common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"COMPANY" means Town Sports International, Inc., a New York
Corporation.
"CONSOLIDATED EBITDA" means, for any period, the sum
(without duplication) of (i) Consolidated Net Income and (ii) to the extent
Consolidated Net Income has been reduced thereby, (A) all income taxes of the
Company and its Restricted Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges less any non-cash
items increasing Consolidated Net Income for such period, all as determined
on a consolidated basis for the Company and its Restricted Subsidiaries in
accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means the
ratio of Consolidated EBITDA during the four full fiscal quarters (the "Four
Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio
(the "Transaction Date") to Consolidated Fixed Charges for the Four Quarter
Period. In addition to and without limitation of the foregoing, for purposes
of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges"
shall be calculated after giving effect on a pro forma (including any pro
forma expense and cost reductions calculated on a basis consistent with
Regulation S-X under the Securities Act) basis for the period of such
calculation to (i) the incurrence or repayment of any Indebtedness of the
Company or any of the Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness in
the ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day
-5-
of the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of the Company or one of the Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being liable
for Acquired Indebtedness and also including any Consolidated EBITDA
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Acquired
Indebtedness) occurred on the first day of the Four Quarter Period. If the
Company or any of its Restricted Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if the Company or any Restricted
Subsidiary had directly incurred or otherwise assumed such guaranteed
Indebtedness. Furthermore, in calculating "Consolidated Fixed Charges" for
purposes of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date, (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period, and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to the
Company for any period, the sum, without duplication, of (i) Consolidated
Interest Expense, plus (ii) the product of (x) the amount of all dividend
payments on any series of Preferred Stock of the Company (other than
dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be
paid or accrued during such period times (y) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
effective consolidated federal, state and local tax rate of the Company,
expressed as a decimal.
-6-
"CONSOLIDATED INTEREST EXPENSE" means, with respect to
the Company for any period, the sum of, without duplication: (i) the
aggregate of the interest expense of the Company and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, including, without limitation, (a) any amortization of debt
discount, (b) the net costs under Interest Swap Obligations, (c) all
capitalized interest and (d) the interest portion of any deferred payment
obligation; and (ii) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to the
Company, for any period, the aggregate net income (or loss) of the Company
and its Restricted Subsidiaries for such period on a consolidated basis,
determined in accordance with GAAP; provided that there shall be excluded
therefrom (a) after-tax gains and losses from Asset Sales or abandonments or
reserves relating thereto, (b) after-tax items classified as extraordinary or
nonrecurring gains and losses, (c) the net income (or loss) of any Person
acquired in a "pooling of interests" transaction accrued prior to the date it
becomes a Restricted Subsidiary or is merged or consolidated with the Company
or any Restricted Subsidiary, (d) the net income (but not loss) of any
Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is
restricted by contract, operation of law or otherwise, (e) the net income of
any Person, other than the Company or a Restricted Subsidiary, except to the
extent of cash dividends or distributions paid to the Company or to a
Restricted Subsidiary by such Person, (f) income or loss attributable to
discontinued operations (including, without limitation, operations disposed
of during such period whether or not such operations were classified as
discontinued), and (g) in the case of a successor to the Company by
consolidation or merger or as a transferee of the Company's assets, any net
income of the successor corporation prior to such consolidation, merger or
transfer of assets.
"CONSOLIDATED NET WORTH" of any Person means the
consolidated stockholders' equity of such Person, determined on a
consolidated basis in accordance with GAAP, less (without duplication)
amounts attributable to Disqualified Capital Stock of such Person; PROVIDED
that the Consolidated Net Worth of any Person shall exclude the effect of any
non-cash charges relating to the acceleration of stock options or similar
securities of such Person or another Person with which such Person is merged
or consolidated.
-7-
"CONSOLIDATED NON-CASH CHARGES" means, with respect to
the Company, for any period, the aggregate depreciation, amortization and
other non-cash expenses of the Company and the Restricted Subsidiaries
reducing Consolidated Net Income of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP (including deferred rent but excluding any such charge
which requires an accrual of or a reserve for cash charges for any future
period).
"CORPORATE TRUST OFFICE" means the office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
"COVENANT DEFEASANCE" has the meaning set forth in
Section 8.01.
"CREDIT FACILITY" means the amended and restated Credit
Agreement dated as of the Issue Date by and among the Company, Bankers Trust
Company and certain lenders from time to time a party thereto, together with
the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor
or replacement agreement and whether by the same or any other agent, lender
or group of lenders.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any Restricted Subsidiary of the Company against
fluctuations in currency values.
"CUSTODIAN" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means an event or condition the occurrence of
which is, or with the lapse of time or the giving of notice or both would be,
an Event of Default.
"DEPOSITORY" means The Depository Trust Company, its
nominees and successors.
-8-
"DESIGNATION" has the meaning provided in Section 4.19.
"DESIGNATION AMOUNT" has the meaning provided in Section
4.19.
"DISQUALIFIED CAPITAL STOCK" means that portion of any
Capital Stock which, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof, on or prior to the final maturity date of the Notes.
"EVENT OF DEFAULT" has the meaning provided in Section
6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, or any successor statute or statutes thereto.
"EXCHANGE NOTES" means the 9 3/4% Senior Notes due 2004
Series B to be issued pursuant to this Indenture in connection with the offer
to exchange Notes for the Initial Notes pursuant to the Registration Rights
Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the
registration statement filed by the Company pursuant to the Registration
Rights Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be determined by the Board of Directors
of the Company acting reasonably and in good faith and shall be evidenced by
a Board Resolution of the Board of Directors of the Company.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession of the United States, which are in effect as of the
Issue Date. All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance
with the terms of the covenants and with other provisions of this Inden
-9-
ture shall be made without giving effect to (i) the deduction or amortization
of any premiums, fees and expenses incurred in connection with any financings
or any other permitted incurrence of Indebtedness and (ii) depreciation,
amortization or other expenses recorded as a result of the application of
purchase accounting in accordance with Accounting Principles Board Opinion
Nos. 16 and 17.
"GLOBAL NOTE" has the meaning provided in Section 2.01.
"GUARANTEE" means, as applied to any obligation, (a) a
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, in any manner, of
any part or all of such obligation and (b) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any
way the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down by letters of credit
"GUARANTEE" has the meaning set forth in Section 10.01.
"GUARANTOR" means each Restricted Subsidiary that
executes a Guarantee in accordance with Section 4.18.
"HOLDER" means a holder of Notes.
"INCUR" has the meaning set forth in Section 4.12.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, (ii) all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all Obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
Obligations under any title retention agreement (but excluding trade accounts
payable and other accrued liabilities arising in the ordinary course of
business that are not overdue by 160 days or more or are being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted), (v) all Obligations for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction, (vi)
guarantees and other contingent obligations in respect of Indebtedness
referred to in clauses (i) through (v) above and clause (viii) below, (vii)
all Obligations of any other Person of the type referred to in clauses (i)
through (vi) which are secured by any lien on any property
-10-
or asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset or the amount of the
Obligation so secured, (viii) all Obligations under currency agreements and
interest swap agreements of such Person and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the Company. The amount of Indebtedness of
any Person at any date shall be the outstanding balance on such date of all
unconditional Obligations as described above, and the maximum liability upon the
occurrence of the contingency giving rise to the Obligation, on any contingent
Obligations at such date; PROVIDED, HOWEVER, that the amount outstanding at any
time of any Indebtedness incurred with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"INDENTURE" means this Indenture, as amended or
supplemented from time to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means a firm (i) which
does not, and whose directors, officers and employees or Affiliates do not,
have a direct or indirect financial interest in the Company and (ii) which,
in the judgment of the Board of Directors of the Company, is otherwise
independent and qualified to perform the task for which it is to be engaged.
"INITIAL NOTES" means the 9 3/4% Senior Notes due 2004
Series A, issued under this Indenture on or about the date hereof.
"INITIAL PURCHASER" means BT Alex. ▇▇▇▇▇ Incorporated.
"INTEREST" when used with respect to any Note means the
amount of all interest accruing on such Note, including any applicable
defaulted interest pursuant to Section 2.12 and any
-11-
Additional Interest pursuant to the Registration Rights Agreement.
"INTEREST PAYMENT DATE" means the stated maturity of an
installment of interest on the Notes.
"INTEREST SWAP OBLIGATIONS" means the obligations of any
Person pursuant to any arrangement with any other Person, whereby, directly
or indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
other Person calculated by applying a fixed or a floating rate of interest on
the same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"INTERNAL REVENUE CODE" means the Internal Revenue Code
of 1986, as amended to the date hereof and from time to time hereafter.
"INVENTORY" means, as of any date, all inventory of the
Company and any of its Restricted Subsidiaries, wherever located, valued in
accordance with GAAP and shown on the balance sheet of the Company for the
quarterly period most recently ended prior to such date for which financial
statements of the Company are available.
"INVESTMENT" means, with respect to any Person, any
direct or indirect loan, advance or other extension of credit (including,
without limitation, a guarantee) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others) to, or any purchase or acquisition
by such Person of any Capital Stock, bonds, notes, debentures or other
securities or evidences of Indebtedness issued by, any Person. "Investment"
shall exclude extensions of trade credit by the Company and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Restricted Subsidiary, as the case may be.
If the Company or any Restricted Subsidiary sells or otherwise disposes of
any Common Stock of any direct or indirect Restricted Subsidiary such that,
after giving effect to any such sale or disposition, it ceases to be a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of.
"ISSUE DATE" means October 9, 1997.
-12-
"LEGAL DEFEASANCE" has the meaning set forth in Section
8.01.
"LEGAL HOLIDAY" has the meaning provided in Section 11.07.
"LIEN" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest).
"MATURITY DATE" means October 15, 2004.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"NET CASH PROCEEDS" means, with respect to any Asset
Sale, the proceeds in the form of cash or Cash Equivalents including payments
in respect of deferred payment obligations when received in the form of cash
or Cash Equivalents (other than the portion of any such deferred payment
constituting interest) received by the Company or any of its Restricted
Subsidiaries from such Asset Sale net of (a) reasonable out-of-pocket
expenses and fees relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions), (b)
taxes paid or payable after taking into account any reduction in consolidated
tax liability due to available tax credits or deductions and any tax sharing
arrangements, (c) repayment of Indebtedness that is required to be repaid in
connection with such Asset Sale and (d) appropriate amounts to be provided by
the Company or any Restricted Subsidiary, as the case may be, as a reserve,
in accordance with GAAP, against any liabilities associated with such Asset
Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale.
"NET PROCEEDS OFFER" has the meaning set forth in Section
4.15.
"NET PROCEEDS OFFER AMOUNT" has the meaning set forth in
Section 4.15.
"NET PROCEEDS OFFER PAYMENT DATE" has the meaning set
forth in Section 4.15.
-13-
"NET PROCEEDS OFFER TRIGGER DATE" has the meaning set
forth in Section 4.15.
"NOTES" means, collectively, the Initial Notes and, when
and if issued as provided in the Registration Rights Agreement, the Exchange
Notes.
"OBLIGATIONS" means all obligations for principal,
premium, interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities payable under the documentation governing any
Indebtedness.
"OFFERING MEMORANDUM" means the confidential Offering
Memorandum dated October 9, 1997 of the Company relating to the offering of
the Notes.
"OFFICER" means, with respect to any Person, the Chairman
of the Board of Directors, the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the Controller,
or the Secretary of such Person, or any other officer designated by the Board
of Directors serving in a similar capacity.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers of the Company.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 11.04 and 11.05, as they relate to the giving of an
Opinion of Counsel.
"PAYING AGENT" has the meaning provided in Section 2.03.
"PERMITTED HOLDERS" means BRS Group, Farallon and their
respective Affiliates.
"PERMITTED INDEBTEDNESS" means, without duplication, each
of the following:
(i)Indebtedness under the Notes and this Indenture
incurred as of the Issue Date;
(ii)Indebtedness incurred pursuant to the Credit Facility in an
aggregate principal amount at any time outstanding not to exceed
$25 million, less any required permanent repayments under all revolving
credit facilities in accordance with the provisions of Section 4.15 (which
are accompanied by a corresponding permanent commitment reduction
thereunder);
-14-
(iii)other Indebtedness (including Capitalized Lease Obligations) of
the Company and the Restricted Subsidiaries outstanding on the Issue Date;
(iv)Purchase Money Indebtedness of the Company and Capitalized Lease
Obligations of the Company and, to the extent constituting Acquired
Indebtedness, of the Restricted Subsidiaries in an aggregate amount for all
Indebtedness incurred pursuant to this subclause (iv) not to exceed $20
million outstanding at any one time;
(v)Interest Swap Obligations of the Company covering Indebtedness of
the Company or any of the Restricted Subsidiaries; PROVIDED, HOWEVER, that
such Interest Swap Obligations are entered into to protect the Company and
the Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(vi)Indebtedness under Currency Agreements; PROVIDED that in the case
of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and the
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vii)Indebtedness of a Restricted Subsidiary to the Company or to a
Restricted Subsidiary for so long as such Indebtedness is held by the
Company or a Restricted Subsidiary, in each case subject to no Lien held by
a Person other than the Company or a Restricted Subsidiary; PROVIDED that
if as of any date any Person other than the Company or a Restricted
Subsidiary owns or holds any such Indebtedness or holds a Lien in respect
of such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness by the issuer of such
Indebtedness;
(viii)Indebtedness of the Company to a Restricted Subsidiary for so
long as such Indebtedness is held by a Restricted Subsidiary, in each case
subject to no Lien; PROVIDED that (a) any Indebtedness of the Company to
any Restricted Subsidiary is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under this Indenture and
the Notes and (b) if as of any date any Person other than a Restricted
Subsidiary owns or holds any such Indebtedness or any Person holds a Lien
in
-15-
respect of such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness by the Company;
(ix)Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; PROVIDED, HOWEVER, that such
Indebtedness is extinguished within two business days of incurrence;
(x)Indebtedness of the Company or any of the Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;
(xi)Refinancing Indebtedness; and
(xii)additional Indebtedness of the Company in an aggregate principal
amount not to exceed $10 million at any one time outstanding.
"PERMITTED INVESTMENTS" means (i) Investments by the
Company or any Restricted Subsidiary in any Person that is or will become
immediately after such Investment a Restricted Subsidiary or that will merge
or consolidate into the Company or a Restricted Subsidiary, (ii) Investments
in the Company by any Restricted Subsidiary; PROVIDED that any Indebtedness
incurred by the Company evidencing such Investment by a Restricted Subsidiary
is unsecured and subordinated, pursuant to a written agreement, to the
Company's obligations under the Notes and this Indenture; (iii) investments
in cash and Cash Equivalents; (iv) loans and advances to employees and
officers of the Company and the Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes not in excess of
$5,000,000 at any one time outstanding; (v) Currency Agreements and Interest
Swap Obligations entered into in the ordinary course of the Company's or a
Restricted Subsidiary's businesses and otherwise in compliance with this
Indenture; (vi) other Investments, including Investments in Unrestricted
Subsidiaries not to exceed $5,000,000 at any one time outstanding; (vii)
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; and (viii) Investments made
by the Company or the Restricted Subsidiaries as a result of considera
-16-
tion received in connection with an Asset Sale made in compliance with
Section 4.15.
"PERMITTED LIENS" means the following types of Liens:
(i)Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or the Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(ii)statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(iii)Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance,
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv)judgment Liens not giving rise to an Event of Default;
(v)easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
and its Restricted Subsidiaries;
(vi)any interest or title of a lessor under any Capitalized Lease
Obligation, provided that such Liens do not extend to any property or asset
which is not leased property subject to such Capitalized Lease Obligation;
(vii)purchase money Liens to finance property or assets of the Company
or any Restricted Subsidiary acquired after the Issue Date; provided,
however, that (A) the related purchase money Indebtedness shall not exceed
the cost of such property or assets and shall not be secured
-17-
by any property or assets of the Company or any Restricted Subsidiary other
than the property and assets so acquired and (B) the Lien securing such
Indebtedness shall be created within 90 days of such acquisition;
(viii)Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(ix)Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x)Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and
set-off;
(xi)Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii)Liens securing Indebtedness under Currency Agreements; and
(xiii)Liens securing Acquired Indebtedness incurred in accordance with
Section 4.12; PROVIDED that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and were not granted
in connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and (B) such Liens
do not extend to or cover any property or assets of the Company or of any
of its Restricted Subsidiaries other than the property or assets that
secured the Acquired Indebtedness prior to the time such Indebtedness
became Acquired Indebtedness of the Company or a Restricted Subsidiary and
are no more favorable to the lienholders than those securing the Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary.
"PERSON" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
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"PHYSICAL NOTES" has the meaning provided in Section 2.01.
"PLAN OF LIQUIDATION" means, with respect to any Person,
a plan (including by operation of law) that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person
otherwise than as an entirety or substantially as an entirety and (b) the
distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition and all or substantially all of the remaining
assets of such Person to holders of Capital Stock of such Person.
"PREFERRED STOCK" of any Person means any Capital Stock
of such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemptions or upon liquidation.
"PRINCIPAL" of any Indebtedness (including the Notes)
means the principal amount of such Indebtedness plus the premium, if any, on
such Indebtedness.
"PRIVATE EXCHANGE NOTES" has the meaning set forth in the
Registration Rights Agreement.
"PRIVATE PLACEMENT LEGEND" means the legend initially set
forth on the Notes in the form set forth in Section 2.15.
"PRO FORMA" means, with respect to any calculation made
or required to be made pursuant to the terms of this Indenture, a calculation
in accordance with Article 11 of Regulation S-X under the Securities Act, as
determined by the Board of Directors of the Company in consultation with its
independent public accountants.
"PUBLIC EQUITY OFFERING" means an underwritten public
offering of Qualified Capital Stock of the Company pursuant to a registration
statement filed with the Commission in accordance with the Securities Act.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the
Company or its Restricted Subsidiaries incurred for the purpose of financing
all or any part of the purchase price or the cost of installation,
construction or improvement of any property.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is
not Disqualified Capital Stock.
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"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the
meaning specified in Rule 144A under the Securities Act.
"RECEIVABLES" means, as of any date, all accounts
receivable of the Company and any of its Restricted Subsidiaries arising out
of the sale of inventory in the ordinary course of business, valued in
accordance with GAAP and shown on the balance sheet of the Company for the
quarterly period most recently ended prior to such date for which financial
statements of the Company are available.
"RECORD DATE" means the Record Date specified in the Notes.
"REDEMPTION DATE," when used with respect to any Note to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture and the Notes.
"REDEMPTION PRICE," when used with respect to any Note to
be redeemed, means the price fixed for such redemption, including principal
and premium, if any, pursuant to this Indenture and the Notes.
"REFERENCE DATE" has the meaning set forth in Section 4.10.
"REFINANCE" means, in respect of any security or
Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem,
defease or retire, or to issue a security or Indebtedness in exchange or
replacement for, such security or Indebtedness in whole or in part.
"Refinanced" and "Refinancing" shall have correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the
Company or any Restricted Subsidiary of Indebtedness incurred in accordance
with Section 4.12 (other than pursuant to clause (ii), (iv), (v), (vi),
(vii), (viii), (ix), (x) or (xii) of the definition of Permitted
Indebtedness), in each case that does not (1) result in an increase in the
aggregate principal amount of Indebtedness of such Person as of the date of
such proposed Refinancing (plus the amount of any premium required to be paid
under the terms of the instrument governing such Indebtedness and plus the
amount of reasonable expenses incurred by the Company or any Restricted
Subsidiary in connection with such Refinancing) or (2) create Indebtedness
with (A) a Weighted Average Life to Maturity that is less than the Weighted
Average Life to Maturity of the Indebtedness being Refinanced or (B) a final
maturity earlier than the final maturity of the Indebtedness being
Refinanced; provided that (x) if such Indebtedness being Refinanced is
Indebtedness of the Company or a guarantor, then such Refinancing
Indebtedness shall
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be Indebtedness solely of the Company or such guarantor, as the case may be, and
(y) if such Indebtedness being Refinanced is subordinate or junior to the Notes,
then such Refinancing Indebtedness shall be subordinate to the Notes at least to
the same extent and in the same manner as the Indebtedness being Refinanced.
"REGISTRAR" has the meaning provided in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement dated as of the Issue Date between the Company and the
Initial Purchaser.
"REGULATION S" means Regulation S under the Securities Act.
"REPLACEMENT ASSETS" means assets of a kind used or
usable in the business of the Company and its Restricted Subsidiaries as
conducted on the date of the relevant Asset Sale.
"RESTRICTED PAYMENT" shall have the meaning set forth in
Section 4.10.
"RESTRICTED SECURITY" has the meaning assigned to such
term in Rule 144(a)(3) under the Securities Act; PROVIDED, HOWEVER, that the
Trustee shall be entitled to request and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the
Company that has not been designated by the Board of Directors of the
Company, by a Board Resolution delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to and in compliance with Section 4.19. Any such
Designation may be revoked by a Board Resolution of the Company delivered to
the Trustee, subject to the provisions of such covenant.
"REVOCATION" has the meaning set forth in Section 4.19.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE AND LEASEBACK TRANSACTION" means any direct or
indirect arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Company or a Restricted Subsidiary of any
property, whether owned by the Company or any Restricted Subsidiary at the
Issue Date or later acquired, which has been or is to be sold or transferred
by the Company or such Restricted Subsidiary to such Person or to any other
Person from whom funds have been or are to be advanced by such Person on the
security of such Property.
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"S&P" means Standard & Poor's Rating Services, a division
of The McGraw Hill Companies, Inc., and its successors.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"SIGNIFICANT SUBSIDIARY" shall have the meaning set forth
in Rule 1.02(w) of Regulation S-X under the Securities Act.
"SUBSIDIARY" of any Person means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii)
any other Person of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by such
Person.
"SURVIVING ENTITY" shall have the meaning set forth in
Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture, except as otherwise provided in Section 9.03.
"TOTAL CAPITALIZATION" means the sum of (i) the total
consolidated indebtedness of the Company and (ii) the Company's consolidated
shareholders' equity (excluding any goodwill reserve).
"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 October 15, 2002,
PROVIDED, HOWEVER, that if the period from the Redemption Date to October 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 October 15, 2002 is less than one year, the weekly average
yield on
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actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"TRUST OFFICER" means any officer or assistant officer of
the Trustee assigned by the Trustee to administer this Indenture, or in the
case of a successor trustee, an officer assigned to the department, division
or group performing the corporation trust work of such successor and assigned
to administer this Indenture.
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the
Company designated as such pursuant to and in compliance with Section 4.19.
Any such designation may be revoked by a Board Resolution of the Company
delivered to the Trustee, subject to the provisions of Section 4.19.
"U.S. GOVERNMENT OBLIGATIONS" mean direct obligations of,
and obligations guaranteed by, the United States of America for the payment
of which the full faith and credit of the United States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the
United States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied
to any Indebtedness at any date, the number of years obtained by dividing (a)
the then outstanding aggregate principal amount of such Indebtedness into (b)
the sum of the total of the products obtained by multiplying (i) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payment of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such
payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary of which all the outstanding voting securities (other than in the
case of a foreign Restricted Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by the Company or any Wholly Owned Restricted
Subsidiary.
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SECTION 1.02. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA,
such provision is incorporated by reference in, and made a part of, this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the Indenture securities means the Company
or any other obligor on the Notes.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
Commission rule and not otherwise defined herein have the meanings assigned
to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP of any date of
determination;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) any reference to a statute, law or regulation means
that statute, law or regulation as amended and in effect from
time to time and includes any successor statute, law or
regulation; PROVIDED, HOWEVER, that any reference to the
Bankruptcy Law shall mean the Bankruptcy Law as applicable
to the relevant case.
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ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
The Initial Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form of EXHIBIT
A. The Exchange Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of EXHIBIT B. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule or depository rule or usage. The Company and the Trustee shall approve
the form of the Notes and any notation, legend or endorsement on them. If
required, the Notes may bear the appropriate legend regarding any original
issue discount for federal income tax purposes. Each Note shall be dated the
date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed
hereto as EXHIBITS A AND B, shall constitute, and are hereby expressly made,
a part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A and Notes
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more permanent global Notes in registered form, substantially
in the form set forth in EXHIBIT A (the "Global Note"), deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Section 2.15. The aggregate principal amount of the
Global Note may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Notes issued in exchange for interests in a Global Note
pursuant to Section 2.16 may be issued in the form of permanent certificated
Notes in registered form in substantially the form set forth in EXHIBIT A
(the "Physical Notes"). All Notes offered and sold in reliance on Regulation
S shall remain in the form of a Global Note until the consummation of the
Exchange Offer pursuant to the Registration Rights Agreement; PROVIDED,
HOWEVER, that all of the time periods specified in the Registration Rights
Agreement to be complied with by the Company have been so complied with.
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SECTION 2.02. EXECUTION AND AUTHENTICATION;
AGGREGATE PRINCIPAL AMOUNT.
Two Officers of the Company shall sign (each of whom
shall have been duly authorized by all requisite corporate actions) the Notes
for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer
at the time of such execution but no longer holds that office or position at
the time the Trustee authenticates the Note, the Note shall nevertheless be
valid.
A Note shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the Note.
The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for
original issue in the aggregate principal amount not to exceed $85,000,000
and (ii) Exchange Notes for issue only in a Registered Exchange Offer,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial Notes, in each case upon a written order of the Company in the form
of an Officers' Certificate of the Company. Each such written order shall
specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes or
Exchange Notes and whether the Notes are to be issued as Physical Notes or
Global Notes or such other information as the Trustee may reasonably request.
In addition, with respect to authentication pursuant to clause (ii) of the
first sentence of this paragraph, the first such written order from the
Company shall be accompanied by an Opinion of Counsel of the Company in a
form reasonably satisfactory to the Trustee stating that the issuance of the
Exchange Notes does not give rise to an Event of Default, complies with this
Indenture and has been duly authorized by the Company. The aggregate
principal amount of Notes outstanding at any time may not exceed
$125,000,000, except as provided in Sections 2.07 and 2.08.
The Trustee may appoint an authenticating agent (the
"Authenticating Agent") reasonably acceptable to the Company to authenticate
Notes. Unless otherwise provided in the appointment, an Authenticating Agent
may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by
such Authenticating Agent. An Authenticating Agent has the same rights as an
Agent to deal with the Company or with any Affiliate of the Company.
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The Notes shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which
shall be located in the Borough of Manhattan in the City of New York, State
of New York) where (a) Notes may be presented or surrendered for registration
of transfer or for exchange ("Registrar"), (b) Notes may be presented or
surrendered for payment ("Paying Agent") and (c) notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company, upon prior written notice to the Trustee, may have
one or more co-Registrars and one or more additional paying agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
Paying Agent. The Company may act as its own Paying Agent, except that for
the purposes of payments on the Notes pursuant to Sections 4.14 and 4.15,
neither the Company nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which agreement shall
incorporate the provisions of the TIA and implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee,
in advance, of the name and address of any such Agent. If the Company fails
to maintain a Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar,
Paying Agent and agent for service of demands and notices in connection with
the Notes, until such time as the Trustee has resigned or a successor has
been appointed. Any of the Registrar, the Paying Agent or any other agent
may resign upon 30 days' notice to the Company.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than
the Trustee to agree in writing that such Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all assets held by the Paying
Agent for the payment of principal of, premium, if any, or interest on, the
Notes (whether such assets have been distributed to it by the Company or any
other obligor on the Notes), and the Company and the Paying Agent shall
notify the Trustee of any Default by the
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Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held
by it to the Trustee and account for any assets disbursed and the Trustee may
at any time during the continuance of any payment Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by
the Company to the Paying Agent, the Paying Agent shall have no further
liability for such assets.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of the Holders. If the Trustee is not the Registrar, the Company
shall furnish or cause the Registrar to furnish to the Trustee before each
Record Date and at such other times as the Trustee may request in writing a
list as of such date and in such form as the Trustee may reasonably require
of the names and addresses of the Holders, which list may be conclusively
relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes or other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; PROVIDED, HOWEVER, that the Notes presented or
surrendered for registration of transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form satisfactory to
the Company, the Trustee and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of
a sum sufficient to cover any transfer tax, fee or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers pursuant to
Section 2.10, 3.04, 4.14, 4.15 or 9.05, in which event the Company shall be
responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Note (i) during a period
beginning at the opening of business 15 days before
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the mailing of a notice of redemption of Notes and ending at the close of
business on the day of such mailing,(ii) selected for redemption in whole or
in part pursuant to Article Three, except the unredeemed portion of any Note
being redeemed in part or (iii) between a Record Date and the next succeeding
Interest Payment Date.
Any Holder of a beneficial interest in a Global Note
shall, by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Notes may be effected only through a book entry
system maintained by the Holder of such Global Note (or its agent), and that
ownership of a beneficial interest in the Note shall be required to be
reflected in a book entry system.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if
the Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Note. If required by the Trustee or the Company, such Holder
must provide satisfactory evidence of such loss, destruction or taking, and
an indemnity bond or other indemnity of reasonable tenor, sufficient in the
reasonable judgment of the Company and the Trustee, to protect the Company,
the Trustee or any Agent from any loss which any of them may suffer if a Note
is replaced. Every replacement Note shall constitute an obligation of the
Company. The Company and the Trustee each may charge such Holder for its
expenses in replacing such Note.
SECTION 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have
been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Subject to the provisions of Section 2.09, a Note does not cease
to be outstanding because an Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other
than a mutilated Note surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a BONA FIDE purchaser. A mutilated Note ceases to
be outstanding upon surrender of such Note and replacement thereof pursuant
to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying
Agent holds U.S. Legal Tender or U.S. Government Obligations sufficient to
pay all of the principal, premium, if any,
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and interest due on the Notes payable on that date and is not prohibited from
paying such money to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Notes shall be deemed not to be
outstanding and interest on them shall cease to accrue.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver, consent or
notice, Notes owned by the Company or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer of the Trustee
actually knows are so owned shall be so considered. The Company shall notify
the Trustee, in writing, when it or, to its knowledge, any of its Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired and such other information as
the Trustee may reasonably request and the Trustee shall be entitled to rely
thereon.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes upon
receipt of a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of temporary
Notes to be authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and so indicate in the Officers' Certificate.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate, upon receipt of a written order of the Company pursuant to
Section 2.02, definitive Notes in exchange for temporary Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Notes surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, shall dispose, in its customary manner, of all Notes surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for
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cancellation. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
The Company will pay interest on overdue principal from
time to time on demand at the rate of interest then borne by the Notes. The
Company shall, to the extent lawful, pay interest on overdue installments of
interest (without regard to any applicable grace periods) from time to time
on demand at the rate of interest then borne by the Notes. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months,
and, in the case of a partial month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the Persons who are Holders on
a subsequent special record date, which special record date shall be the
fifteenth day next preceding the date fixed by the Company for the payment of
defaulted interest or the next succeeding Business Day if such date is not a
Business Day. The Company shall notify the Trustee in writing of the amount
of defaulted interest proposed to be paid on each Note and the date of the
proposed payment (a "Default Interest Payment Date"), and at the same time
the Company 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 on or
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 provided in this Section; PROVIDED, HOWEVER, that in no event
shall the Company deposit monies proposed to be paid in respect of defaulted
interest later than 11:00 a.m. New York City time of the proposed Default
Interest Payment Date. At least 15 days before the subsequent special record
date, the Company shall mail (or cause to be mailed) to each Holder, as of a
recent date selected by the Company, with a copy to the Trustee, a notice
that states the subsequent special record date, the payment date and the
amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid. Notwithstanding the foregoing, any interest
which is paid prior to the expiration of the 30-day period set forth in
Section 6.01(a) shall be paid to Holders as of the regular record date for
the Interest Payment Date for which interest has not been paid.
Notwithstanding the foregoing, the Company may make payment of any defaulted
interest in any other lawful man
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ner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by
such exchange.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP"
number, and, if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; PROVIDED, HOWEVER, that
no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee
of any change in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONIES.
Prior to 11:00 a.m. New York City time on each Interest
Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date
and Net Proceeds Offer Payment Date, the Company shall have deposited with
the Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date and Net Proceeds Offer
Payment Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Maturity
Date, Redemption Date, Change of Control Payment Date and Net Proceeds Offer
Payment Date, as the case may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Note that constitutes a
Restricted Security or is sold in compliance with Regulation S shall bear the
following legend (the "Private Placement Legend") on the face thereof until
after the second anniversary of the later of the Issue Date and the last date
on which the Company or any Affiliate of the Company was the owner of such
Note (or any predecessor security) (or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel
for the Company, unless otherwise agreed by the Company and the Holder
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
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AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY THEREOF OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend on the face
thereof
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR
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BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF
SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO AN COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS 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 DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF 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 SECTION 2.17 OF THE INDENTURE GOVERNING THIS
NOTE.
SECTION 2.16. BOOK-ENTRY PROVISIONS
FOR GLOBAL SECURITY.
(a) The Global Notes initially shall (i) be registered
in the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Section 2.15.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Notes, and the Depository may be treated by
the Company, the Trustee and any Agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any Agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
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(b) Transfers of a Global Note shall be limited to
transfers in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in a Global Note
may be transferred or exchanged for Physical Notes in accordance with the
rules and procedures of the Depository and the provisions of Section 2.17.
In addition, Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Note if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Global Notes and a successor depositary is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request
from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in a Global Note to beneficial owners
pursuant to paragraph (b), the Registrar shall (if one or more Physical Notes
are to be issued) reflect on its books and records the date and a decrease in
the principal amount of such Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and
the Company shall execute and the Trustee shall authenticate and deliver, one
or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global
Note to beneficial owners pursuant to paragraph (b), such Global Note shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security
delivered in exchange for an interest in a Global Note pursuant to paragraph
(b) or (c) shall, except as otherwise provided by paragraphs (a)(i)(x) and
(c) of Section 2.17, bear the legend regarding transfer restrictions
applicable to the Physical Notes set forth in Section 2.15.
(f) The Holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
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SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED
INVESTORS AND NON-U.S. PERSONS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to any Institutional Accredited Investor which is not a
QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date (PROVIDED, HOWEVER, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the second anniversary
of the Issue Date) or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of EXHIBIT C and any legal opinions and
certifications required thereby or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of EXHIBIT D; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
written instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of such Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
(b) TRANSFERS TO QIBS. The following provisions shall
apply with respect to the registration of any proposed transfer of a Note
constituting a Restricted Security to a QIB (excluding transfers to Non-U.S.
Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note
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stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who has signed the certification provided for on the form
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in a Global Note, upon receipt by the Registrar of
written instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of such Global
Note in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the transfer,
exchange or replacement of Notes not bearing the Private Placement Legend,
the Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear
the Private Placement Legend unless (i) the requested transfer is after the
second anniversary of the Issue Date (PROVIDED, HOWEVER, that neither the
Company nor any Affiliate of the Company has held any beneficial interest in
such Note, or portion thereof, at any time prior to or on the second
anniversary of the Issue Date), or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee
to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of
the Securities Act.
(d) GENERAL. By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and
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agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 2.16 or this
Section 2.17. The Company shall have the right to inspect and make copies of
all such letters, notices or other written communications at any reasonable
time during the Registrar's normal business hours upon the giving of
reasonable written notice to the Registrar.
(e) TRANSFERS OF NOTES HELD BY AFFILIATES. Any
certificate (i) evidencing a Note that has been transferred to an Affiliate
of an Company within three years after the Issue Date, as evidenced by a
notation on the Assignment Form for such transfer or in the representation
letter delivered in respect thereof or (ii) evidencing a Note that has been
acquired from an Affiliate (other than by an Affiliate) in a transaction or a
chain of transactions not involving any public offering, shall, until two
years after the last date on which either the Company or any Affiliate of the
Company was an owner of such Note, in each case, bear a legend in
substantially the form set forth in Section 2.15, unless otherwise agreed by
the Company (with written notice thereof to the Trustee).
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to
Paragraph 5 of the Notes and Section 3.03, it shall notify the Trustee and
the Paying Agent in writing of the Redemption Date and the principal amount
of the Notes to be redeemed.
The Company shall give each notice provided for in this
Section 3.01 at least 45 but not more than 60 days before the Redemption Date
(unless a shorter notice period shall be satisfactory to the Trustee, as
evidenced in a writing signed on behalf of the Trustee), together with an
Officers' Certificate stating that such redemption shall comply with the
conditions contained herein and in the Notes, the Redemption Date, the
redemption price and the principal amount of the Notes to be redeemed.
If the Company is required to make an offer to redeem
Notes pursuant to the provisions of Section 4.14 or 4.15 hereof, it shall
furnish to the Trustee at least 30 days but
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not more than 60 days before a Redemption Date (or such shorter period as may be
agreed to by the Trustee in writing), an Officers' Certificate setting forth
(i) the Section of this Indenture pursuant to which the redemption shall occur,
(ii) the Redemption Date, (iii) the principal amount of Notes to be redeemed,
(iv) the redemption price and (v) a statement to the effect that (a) the Company
or one of its Subsidiaries has effected an Asset Sale and the conditions set
forth in Section 4.15 have been satisfied or (b) a Change of Control has
occurred and the conditions set forth in Section 4.14 have been satisfied, as
applicable.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
In the event that less than all of the Notes are to be
redeemed at any time, selection of such Notes for redemption will be made by
the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed or, if such Notes
are not then listed on a national securities exchange, on a PRO RATA basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
PROVIDED, HOWEVER, that no Notes of a principal amount of U.S. $1,000 or less
shall be redeemed in part; PROVIDED, FURTHER, that if a partial redemption is
made with the proceeds of a Public Equity Offering, selection of the Notes or
portions thereof for redemption shall be made by the Trustee only on a PRO
RATA basis or on as nearly a PRO RATA basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days
before the redemption date to each Holder of Notes to be redeemed at its
registered address. If any Note is to be redeemed in part only, the notice
of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Company has deposited with the Paying
Agent funds in satisfaction of the applicable redemption price pursuant to
this Indenture.
SECTION 3.03. OPTIONAL REDEMPTION.
(a) The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after
October 15, 2001, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) if redeemed during the twelve-month period commencing on October 15
of the
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year set forth below, plus, in each case, accrued and unpaid interest thereon,
if any, to the date of redemption:
YEAR PERCENTAGE
---- ----------
2001............................ 104.875%
2002............................ 102.438%
2003 and thereafter............. 100.000%
(b) At any time, or from time to time, on or prior to
October 15, 2000, the Company may, at its option, use the net cash proceeds
of one or more Public Equity Offerings to redeem up to 35% of the Notes at a
redemption price equal to 109.750% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of redemption;
provided that a least 65% of the principal amount of Notes originally issued
remains outstanding immediately after any such redemption. In order to
effect the foregoing redemption with the proceeds of any Public Equity
Offering, the Company shall make such redemption not more than 120 days after
the consummation of any such Public Equity Offering.
(c) At any time on or prior to October 15, 2002, the
Notes may also be redeemed as a whole but not in part at the option of the
Company upon the occurrence of a Change of Control, upon not less than 30 nor
more than 60 days' prior notice (but in no event more than 90 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued but
unpaid interest, in any, to, the date of redemption (the "Redemption Date")
(subject to the rights of Holders on the relevant record date to receive
interest due on the relevant interest payment date).
SECTION 3.04. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before the
Redemption Date, the Company shall mail or cause to be mailed a notice of
redemption by first class mail to each Holder of Notes to be redeemed at its
registered address, with a copy to the Trustee and any Paying Agent. At the
Company's request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. The Company shall provide such
notices of redemption to the Trustee at least five days before the intended
mailing date. In any case, failure to give such notice or any defect in the
notice to the holder of any Note shall not affect the validity of the
proceeding for the redemption of any other Note.
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Each notice of redemption shall identify (including the
CUSIP number) the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the redemption price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption
is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes or applicable portions thereof called for
redemption ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Notes is to receive payment of the
redemption price plus accrued interest as of the Redemption Date, if any,
upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
and
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
No representation is made as to the accuracy of the CUSIP
numbers listed in such notice or printed on the Notes.
The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the purchase of Notes.
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SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with
Section 3.04, such notice of redemption shall be irrevocable and Notes called
for redemption become due and payable on the Redemption Date and at the
redemption price plus accrued interest as of such date, if any. Upon
surrender to the Trustee or Paying Agent, such Notes called for redemption
shall be paid at the redemption price plus accrued interest thereon to the
Redemption Date, but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant record dates referred to in the Notes.
Interest shall accrue on or after the Redemption Date and shall be payable
only if the Company defaults in payment of the redemption price.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date and in accordance with
Section 2.14, the Company shall deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the redemption price plus accrued interest, if any,
of all Notes to be redeemed on that date. The Paying Agent shall promptly
return to the Company any U.S. Legal Tender so deposited which is not
required for that purpose, except with respect to monies owed as obligations
to the Trustee pursuant to Article Seven.
Unless the Company fails to comply with the preceding
paragraph and defaults in the payment of such redemption price plus accrued
interest, if any, interest on the Notes to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Notes are
presented for payment.
SECTION 3.07. NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part,
the Trustee shall authenticate for the Holder a new Note or Notes equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
(a) The Company shall pay the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes and in this Indenture.
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(b) An installment of principal of or interest on the
Notes shall be considered paid on the date it is due if the Trustee or Paying
Agent (other than the Company or any of its Affiliates) holds, prior to 11:00
a.m. New York City time on that date, U.S. Legal Tender designated for and
sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture or the
Notes.
(c) Notwithstanding anything to the contrary contained
in this Indenture, the Company may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the United
States of America from principal or interest payments hereunder.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required
under Section 2.03. The Company shall give prior written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 11.02.
SECTION 4.03. CORPORATE EXISTENCE.
Except as provided in Article Five, the Company shall do
or shall cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or
other existence of each of the Subsidiaries in accordance with the respective
organizational documents of the Company and the Subsidiaries and the rights
(charter and statutory) and material franchises of the Company and the
Subsidiaries.
SECTION 4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the
Company or any of the Subsidiaries or properties of the Company or any of the
Subsidiaries and (ii) all material lawful claims for labor, materials and
supplies that, if unpaid, might by law become a Lien upon the property of the
Company or any of the Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any
such
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tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate negotiations or proceedings
properly instituted and diligently conducted for which adequate reserves, to
the extent required under GAAP, have been taken.
SECTION 4.05. MAINTENANCE OF PROPERTIES
AND INSURANCE.
(a) The Company and each of its Subsidiaries shall cause
all material properties owned by or leased to it and used or useful in the
conduct of its business to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause
to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company or such
Subsidiary may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company or
any of its Subsidiaries from discontinuing the use, operation or maintenance
of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors of
the Company or of the Board of Directors of the Subsidiary concerned, or of
an officer (or other agent employed by the Company or any of its
Subsidiaries) of the Company or such Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the
business of the Company or any of its Subsidiaries.
(b) The Company and the Subsidiaries shall cause to be
provided insurance (including appropriate self-insurance) against loss or
damage of the kinds that, in the good faith judgment of the respective Boards
of Directors or other governing body or officer of the Company or such
Subsidiaries, as the case may be, are adequate and appropriate for the
conduct of the business of the Company or such Subsidiaries, as the case may
be, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the good faith
judgment of the respective Boards of Directors or other governing body or
officer of the Company or such Subsidiary, as the case may be, for companies
similarly situated in the industry.
SECTION 4.06. COMPLIANCE CERTIFICATE;
NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 105
days after the end of its fiscal years, an Officers' Certificate (PROVIDED,
HOWEVER, that one of the signatories to
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such Officers' Certificate shall be the Company's principal executive
officer, principal financial officer or principal accounting officer), as to
such Officers' knowledge of the Company's compliance with all conditions and
covenants under this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and in the event any Default of the
Company exists, such Officers shall specify the nature of such Default. Each
such Officers' Certificate shall also notify the Trustee should the Company
elect to change the manner in which it fixes its fiscal year end.
(b) (i) If any Default or Event of Default has occurred
and is continuing or (ii) if any Holder seeks to exercise any remedy
hereunder with respect to a claimed Default under this Indenture or the
Notes, the Company shall deliver to the Trustee, at its address set forth in
Section 11.02, by registered or certified mail or by facsimile transmission
followed by hard copy by registered or certified mail an Officers'
Certificate specifying such event, notice or other action within 10 days of
its becoming aware of such occurrence.
SECTION 4.07. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations,
orders and restrictions of the United States of America, all states and
municipalities thereof and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of
their respective properties, except for such noncompliances as could not
singly or in the aggregate reasonably be expected to have a material adverse
effect on the financial condition, business, prospects or results of
operations of the Company and its Subsidiaries taken as a whole.
SECTION 4.08. REPORTS TO HOLDERS.
The Company will deliver to the Trustee within 15 days
after the filing of the same with the Commission, copies of the quarterly and
annual reports and of the information, documents and other reports, if any,
which the Company is required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the Commission, upon the earlier of the
effectiveness of the Exchange Offer Registration Statement and 150 days
following the Issue Date, and provide the Trustee and Holders with such
annual reports and such information, documents and other reports specified in
Sections 13 and 15(d) of the Exchange Act. The
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Company will also comply with the other provisions of TIA Section 314(a).
SECTION 4.09. WAIVER OF STAY, EXTENSION
OR USURY LAWS.
The Company covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury law or other law that would prohibit or forgive the Company
from paying all or any portion of the principal of or interest on the Notes
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.10. LIMITATION ON RESTRICTED
PAYMENTS.
The Company will not, and will not cause or permit any of
the Restricted Subsidiaries to, directly or indirectly, (a) declare or pay
any dividend or make any distribution (other than dividends or distributions
payable in Qualified Capital Stock of the Company) on or in respect of shares
of the Company's Capital Stock to holders of such Capital Stock, (b)
purchase, redeem or otherwise acquire or retire for value any Capital Stock
of the Company or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, (c) make any principal payment on,
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire
for value, prior to any scheduled maturity, scheduled or mandatory repayment
or scheduled sinking fund payment, any Indebtedness of the Company or its
Subsidiaries that is subordinate or junior in right of payment to the Notes,
or (d) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being referred
to as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the Company is not able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.12 or (iii) the aggregate amount
of Restricted Payments (including such proposed Restricted Payment) made
subsequent to the Issue Date (the amount expended for such purposes, if other
than in cash, being the fair market value of such property as determined
reasonably and
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in good faith by the Board of Directors of the Company) shall exceed the sum,
without duplication, of: (w) 50% of the cumulative Consolidated Net Income (or
if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)
of the Company earned subsequent to the Issue Date and on or prior to the date
the Restricted Payment occurs (the "Reference Date") (treating such period as a
single accounting period); plus (x) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date and on or prior to the
Reference Date of Qualified Capital Stock of the Company; plus (y) without
duplication of any amounts included in clause (iii)(x) above, 100% of the
aggregate net cash proceeds of any equity contribution received by the Company
from a holder of the Company's Capital Stock; plus (z) an amount equal to the
sum of (1) the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances or other transfers of
assets by any Unrestricted Subsidiary to the Company or any Restricted
Subsidiary or the receipt of proceeds by the Company or any Restricted
Subsidiary from the sale or other disposition of any portion of the Capital
Stock of any Unrestricted Subsidiary, in each case occurring subsequent to the
Issue Date, and (2) the consolidated net Investments on the date of Revocation
made by the Company or any of the Restricted Subsidiaries in any Subsidiary of
the Company that has been designated an Unrestricted Subsidiary after the Issue
Date upon its redesignation as a Restricted Subsidiary in accordance with
Section 4.18.
Notwithstanding the foregoing, the provisions set forth
in the immediately preceding paragraph do not prohibit: (1) the payment of
any dividend or redemption payment within 60 days after the date of
declaration of such dividend if the dividend or redemption payment, as the
case may be, would have been permitted on the date of declaration; (2) if no
Default or Event of Default shall have occurred and be continuing, the
acquisition of any shares of Capital Stock of the Company, either (i) solely
in exchange for shares of Qualified Capital Stock of the Company or (ii)
through the application of net proceeds of a substantially concurrent sale
for cash (other than to a Restricted Subsidiary of the Company) of shares of
Qualified Capital Stock of the Company; (3) if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any Indebtedness of
the Company or a Subsidiary of the Company that is subordinate or junior in
right of payment to the Notes either (i) solely in exchange for shares of
Qualified Capital Stock of the Company, or (ii) through the application of
net proceeds of a substantially concurrent sale for cash (other than to a
Restricted Subsidiary of the Company) of (A) shares of Qualified Capital
Stock of the Company or (B) Refinancing Indebtedness; and (4) so long as no
Default or Event of Default
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shall have occurred and be continuing, repurchases by the Company of Capital
Stock of the Company or options to purchase Capital Stock of the Company, stock
appreciation rights or any similar equity interest in the Company from directors
and employees of the Company or any of its Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, in an aggregate amount not to exceed $500,000 in any calendar year;
and (5) so long as no Default or Event of Default shall have occurred and be
continuing, repurchases by the Company of shares of its Series B Preferred Stock
held by directors and employees of the Company pursuant to provisions thereof
requiring the redemption thereof at the election of the holders thereof at any
time following an initial public offering of the Company. In determining the
aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the immediately preceding paragraph, amounts
expended pursuant to clauses (1), (2)(ii), (3)(ii)(A), (4) and (5) above shall
be included in such calculation.
Not later than the date of making any Restricted Payment,
the Company shall deliver to the Trustee an officers' certificate stating
that such Restricted Payment complies with the Indenture and setting forth in
reasonable detail the basis upon which the required calculations were
computed, which calculations may be based upon the Company's latest available
internal quarterly financial statements.
SECTION 4.11. LIMITATIONS ON TRANSACTIONS
WITH AFFILIATES.
(a) The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates
(each an "Affiliate Transaction"), other than (x) Affiliate Transactions
permitted under paragraph (b) below and (y) Affiliate Transactions on terms
that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length basis
from a Person that is not an Affiliate of the Company or such Restricted
Subsidiary. All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2,500,000
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the
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foregoing provisions. If the Company or any Restricted Subsidiary enters into
an Affiliate Transaction (or a series of related Affiliate Transactions related
to a common plan) that involves an aggregate fair market value of more than
$10,000,000, the Company or such Restricted Subsidiary, as the case may be,
shall, prior to the consummation thereof, obtain an opinion stating that such
transaction or series of related transactions are fair to the Company or the
relevant Restricted Subsidiary, as the case may be, from a financial point of
view, from an Independent Financial Advisor.
(b) The restrictions set forth in clause (a) shall not
apply to (i) reasonable fees and compensation paid to and indemnity provided
on behalf of, officers, directors, employees or consultants of the Company or
any Restricted Subsidiary as determined in good faith by the Company's Board
of Directors; (ii) transactions exclusively between or among the Company and
any of the Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture; (iii) Restricted Payments permitted by this
Indenture; and (iv) advisory fees pursuant to the Professional Services
Agreement between the Company and BRS Group in effect on the Issue Date.
SECTION 4.12. LIMITATION ON INCURRENCE
OF ADDITIONAL INDEBTEDNESS.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, acquire, become liable, contingently or otherwise, with respect
to, or otherwise become responsible for payment of (collectively, "incur")
any Indebtedness (other than Permitted Indebtedness); PROVIDED, HOWEVER, that
if no Default or Event of Default shall have occurred and be continuing at
the time of or as a consequence of the incurrence of any such Indebtedness,
the Company may incur Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such Indebtedness, after
giving effect to the incurrence thereof, the Consolidated Fixed Charge
Coverage Ratio of the Company is greater than 2.00 to 1.00.
The Company will not, directly or indirectly, in any
event incur any Indebtedness which by its terms (or by the terms of any
agreement governing such Indebtedness) is subordinated to any other
Indebtedness of the Company unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes to the same extent and in the same manner as such
Indebtedness is subordinated pursuant to subordination provisions that are
most favorable to the holders of any other Indebtedness of the Company.
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SECTION 4.13. LIMITATION ON DIVIDEND AND
OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company will not, and will not cause or permit any of
the Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any encumbrance or restriction
on the ability of any Restricted Subsidiary to (a) pay dividends or make any
other distributions on or in respect of its Capital Stock; (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company
or any other Restricted Subsidiary; or (c) transfer any of its property or
assets to the Company or any other Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of: (1) applicable
law; (2) this Indenture and the Notes; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary; (4) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person so acquired (including, but not limited to, such
Person's direct and indirect Subsidiaries); (5) agreements existing on the
Issue Date to the extent and in the manner such agreements are in effect on
the Issue Date; or (6) an agreement governing Indebtedness incurred to
Refinance the Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (2), (4) or (5) above; PROVIDED, HOWEVER,
that the provisions relating to such encumbrance or restriction contained in
any such Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in its
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4) or (5).
SECTION 4.14. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each
Holder shall have the right to require that the Company purchase all or a
portion of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, thereon to
the date of purchase.
(b) Within 30 days following the date upon which the
Change of Control occurred, the Company shall send, by first class mail, a
notice to each Holder at such Holder's last registered address, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. The notice to
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the Holders shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Change of Control Offer. Such
notice shall state:
(i) that the Change of Control Offer is being made pursuant to
this Section 4.14 and that all Notes tendered and not withdrawn shall be
accepted for payment;
(ii) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
(iii) that any Note not tendered shall continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third business day prior to the
Change of Control Payment Date;
(vi) that Holders shall be entitled to withdraw their election if
the Paying Agent receives, not later than the second business day prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Notes purchased;
(vii) that Holders whose Notes are purchased only in part shall be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; PROVIDED, HOWEVER, that each Note purchased and each
new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof; and
(viii) the circumstances and relevant facts regarding such Change of
Control.
On the Change of Control Payment Date, the Company shall, to the
extent permitted by law, (i) accept for payment
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all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent an amount equal to the
aggregate Change of Control Payment in respect of all Notes or portions thereof
so tendered and (iii) deliver, or cause to be delivered, to the Trustee for
cancellation the Notes so accepted together with an Officers' Certificate
stating that such Notes or portions thereof have been tendered to and purchased
by the Company. The Paying Agent will promptly either (x) pay to the Holder
against presentation and surrender (or, in the case of partial payment,
endorsement) of the Global Notes or (y) in the case of Certificated Securities,
mail to each Holder of Notes the Change of Control Payment for such Notes, and
the Trustee will promptly authenticate and deliver to the Holder of the Global
Notes a new Global Note or Notes or, in the case of Definitive Notes, mail to
each Holder new Certificated Securities, as applicable, equal in principal
amount to any unpurchased portion of the Notes surrendered, if any, provided
that each new Certificated Security will be in a principal amount of $1,000 or
an integral multiple thereof. The Company will notify the Trustee and the
Holders of the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer at
the Change of Control Purchase Price, at the same times and otherwise in
compliance with the requirements applicable to a Change of Control Offer made by
the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
Neither the Board of Directors of the Company nor the Trustee may
waive the provisions of this Section 4.14 relating to the Company's obligation
to make a Change of Control Offer or a Holder's right to redemption upon a
Change of Control.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.14, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under the provisions of this Section 4.14 by virtue thereof.
SECTION 4.15. LIMITATION ON ASSET SALES.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, consummate an Asset Sale unless (i)
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the Company or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined in good
faith by the Company's Board of Directors), (ii) at least 80% of the
consideration received by the Company or the Restricted Subsidiary, as the case
may be, from such Asset Sale shall be in the form of cash or Cash Equivalents
and is received at the time of such disposition; PROVIDED, HOWEVER, that the
amount of (A) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or the notes thereto), of the Company or
any Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee in such Asset Sale
and from which the Company or such Restricted Subsidiary is released and (B) any
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are immediately converted by the Company or
such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the
cash or Cash Equivalents received), shall be deemed to be cash for the purposes
of this provision; and (iii) upon the consummation of an Asset Sale, the Company
shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 360 days of receipt thereof either (A) to
prepay any Indebtedness ranking at least PARI PASSU with the Notes (including
amounts under the Credit Facility) and, in the case of any such Indebtedness
under any revolving credit facility, effect a permanent reduction in the
availability under such revolving credit facility, (B) to make an investment in
properties and assets that replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that will be used in the
business of the Company and the Restricted Subsidiaries as existing on the Issue
Date or in businesses reasonably related thereto ("Replacement Assets"), or (C)
a combination of prepayment and investment permitted by the foregoing clauses
(iii)(A) and (iii)(B). On the 361st day after an Asset Sale or such earlier
date, if any, as the Board of Directors of the Company or of such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next
preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate
amount of Net Cash Proceeds which have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and
(iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount")
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 45 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a PRO RATA basis, that
amount of Notes equal to the Net
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Proceeds Offer Amount at a price equal to 100% of the principal amount of the
Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the
date of purchase; PROVIDED, HOWEVER, that if at any time any non-cash
consideration received by the Company or any Restricted Subsidiary, as the case
may be, in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.15. The Company may defer the Net
Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount
equal to or in excess of $5 million resulting from one or more Asset Sales (at
which time, the entire unutilized Net Proceeds Offer Amount, not just the amount
in excess of $5 million, shall be applied as required pursuant to this
paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and the Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and the Restricted Subsidiaries not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.
Notwithstanding the two immediately preceding paragraphs, the Company
and the Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 80% of the
consideration for such Asset Sale constitutes Replacement Assets and (ii) such
Asset Sale is for fair market value; PROVIDED that any consideration not
constituting Replacement Assets received by the Company or any of the Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall constitute Net Cash Proceeds subject to the provisions of
the two preceding paragraphs.
Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 30 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes in an amount exceeding the
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Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on a PRO
RATA basis (based on amounts tendered). A Net Proceeds Offer shall remain open
for a period of 20 business days or such longer period as may be required by
law.
If the Net Proceeds Offer is on or after a Record Date and on or
before the related Interest Payment Date, any accrued interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
Record Date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Net Proceeds Offer.
The notice, which shall govern the terms of the Net Proceeds Offer,
shall include such disclosures as are required by law and shall state:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.15;
(ii) the purchase price (including the amount of accrued interest,
if any) to be paid for Notes purchased pursuant to the Net Proceeds Offer
and teh Net Proceeds Payment Date;
(iii) that any Note not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(iv) that, unless the Company defaults on making the payment, any
Note accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Net Proceeds Payment Date;
(v) that Holders accepting the Offer to have their Notes purchased
pursuant to the Net Proceeds Offer will be required to surrender their
Notes to the Paying Agent at the address specified in the notice prior to
the close of business on the Excess Net Payment Date;
(vi) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
second Business Day prior to the Net Proceeds Payment Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Notes purchased;
(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered;
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PROVIDED that each Note purchased and each such new Note issued shall be in an
original principal amount in denominations of $1,000 and integral multiples
thereof;
(viii) any other procedures that a Holder must follow to accept a Net
Proceeds Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Net Proceeds Payment Date, the Company shall (i) accept for
payment Notes or portions thereof tendered pursuant to the Net Proceeds Offer in
accordance with this Section 4.15, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price, plus accrued interest, if any, of
all Notes to be purchased in accordance with this Section 4.15 and (iii) deliver
to the Trustee Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof tendered to and accepted for payment by the
Company.
For purposes of this Section 4.15, the Trustee shall act as the Paying
Agent. The Paying Agent shall promptly (but in any case no later than 10
calendar days after the Net Proceeds Payment Date) mail or deliver to the
Holders of Notes so accepted payment in an amount equal to the purchase price
for such Notes, and the Company shall execute and issue, and the Trustee shall
promptly authenticate and mail to such Holders, a new Note equal in principal
amount to any unpurchased portion of the Note surrendered; PROVIDED that each
such new Note shall be issued in an original principal amount in denominations
of $1,000 and integral multiples thereof. The Company will send to the Trustee
and the Holders of Notes on or as soon as practicable after the Net Proceeds
Payment Date a notice setting forth the results of the Net Proceeds Offer. Any
Notes not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
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SECTION 4.16. LIMITATION ON PREFERRED
STOCK OF RESTRICTED SUBSIDIARIES.
The Company shall not permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or to a Wholly Owned
Restricted Subsidiary) or permit any Person (other than the Company or a Wholly
Owned Restricted Subsidiary) to own any Preferred Stock of any Restricted
Subsidiary.
SECTION 4.17. LIMITATION ON LIENS.
The Company will not, and will not cause or permit any of the
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens upon any property or assets of the Company
or any of the Restricted Subsidiaries whether owned on the Issue Date or
acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise
convey any right to receive income or profits therefrom unless (i) in the case
of Liens securing Indebtedness that is expressly subordinate or junior in right
of payment to the Notes, the Notes are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Liens and (ii) in all
other cases, the Notes are secured on an equal and ratable basis, except for (a)
Liens existing as of the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date; (b) Liens securing Indebtedness under the
Credit Facility; (c) Liens securing the Notes; (d) Liens of the Company or a
Restricted Subsidiary on assets of any Restricted Subsidiary of the Company; (e)
Liens securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under the Indenture and
which has been incurred in accordance with the provisions of the Indenture;
PROVIDED, HOWEVER, that such Liens (A) are no less favorable to the Holders and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (B) do not extend to
or cover any property or assets of the Company or any of the Restricted
Subsidiaries not securing the Indebtedness so Refinanced; (f) Liens in favor of
the Company; and (g) Permitted Liens.
SECTION 4.18. LIMITATION OF GUARANTEES BY
RESTRICTED SUBSIDIARIES
The Company will not permit any Restricted Subsidiary, directly or
indirectly, by way of the pledge of any intercompany note or otherwise, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company (other than Indebtedness incurred under the Credit
Facility) unless, in any such case (a) such Restricted Subsidiary
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executes and delivers a supplemental indenture to the Indenture, providing a
guarantee of payment of the Notes by such Restricted Subsidiary substantially in
the form of Exhibit E (the "Guarantee") and (b) if such assumption, guarantee or
other liability of such Restricted Subsidiary is provided in respect of
Indebtedness that is expressly subordinated to the Notes, the guarantee or other
instrument provided by such Restricted Subsidiary in respect of such subordinate
Indebtedness shall be subordinated to the Guarantee pursuant to subordination
provisions not less favorable to the Holders of the Notes than those contained
in the indenture or similar document governing such subordinated Indebtedness.
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon: (i) the
unconditional release of such Restricted Subsidiary from its liability in
respect of the Indebtedness in connection with which such Guarantee was executed
and delivered pursuant to the preceding paragraph; or (ii) any sale or other
disposition (by merger or otherwise) to any Person which is not a Restricted
Subsidiary of the Company, of all of the Company's Capital Stock in, or all or
substantially all of the assets of, such Restricted Subsidiary; PROVIDED,
HOWEVER, that (a) such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of the Indenture and (b) such assumption,
guarantee or other liability of such Restricted Subsidiary has been released by
the holders of the other Indebtedness so guaranteed.
SECTION 4.19. LIMITATION ON DESIGNATIONS
OF UNRESTRICTED SUBSIDIARIES.
The Company may designate any Subsidiary of the Company (other than a
Subsidiary of the Company which owns Capital Stock of a Restricted Subsidiary)
as an "Unrestricted Subsidiary" under the Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation; and
(b) the Company would be permitted under the Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the sum of
(i) fair market value of the Capital Stock of such Subsidiary owned by the
Company and the Restricted Subsidiaries on such date and (ii) the aggregate
amount of other
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Investments of the Company and the Restricted Subsidiaries in such
Subsidiary on such date; and
(c) the Company would be permitted to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.12
at the time of Designation (assuming the effectiveness of such
Designation).
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to
Section 4.10 for all purposes of this Indenture in the Designation Amount. The
Company shall not, and shall not permit any Restricted Subsidiary to, at any
time (x) provide direct or indirect credit support for or a guarantee of any
Indebtedness of any Unrestricted Subsidiary (including of any undertaking,
agreement or instrument evidencing such Indebtedness), (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z) be
directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary), except, in the case of
clause (x) or (y), to the extent permitted under Section 4.10
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then
constitute a Restricted Subsidiary, if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company certifying compliance with the foregoing provisions.
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ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. MERGER, CONSOLIDATION
AND SALE OF ASSETS.
The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Restricted Subsidiaries) whether as
an entirety or substantially as an entirety to any Person unless (i) either
(a) the Company shall be the surviving or continuing corporation or (b) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of
the Company and of the Restricted Subsidiaries substantially as an entirety (the
"Surviving Entity") (x) shall be a corporation organized and validly existing
under the laws of the United States, any state thereof or the District of
Columbia and (y) shall expressly assume, by supplemental indenture (in form and
substance satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any, and
interest on all of the Notes and the performance of every covenant of the Notes,
this Indenture, and the Registration Rights Agreement on the part of the Company
to be performed or observed; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(b)(y) above (including
giving effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be,
(1) shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction and
(2) shall be able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section 4.12; (iii) immediately before and
immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(b)(y) above (including, without limitation giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to
be incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred and be
continuing; and (iv) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers'
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Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
SECTION 5.02. SUCCESSOR CORPORATION
SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with Section
5.01 in which the Company is not the Surviving Entity, the Surviving Entity
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture and the Notes with the same effect as if
such Surviving Entity had been named as such.
ARTICLE SIX
REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" means any of the following events:
(a) the failure to pay interest on any Notes when the same becomes
due and payable and the default continues for a period of 30 days;
(b) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);
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(c) a default in the observance or performance of any other covenant
or agreement contained in this Indenture which default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Notes (except in the case of a default with respect to Section 5.01, which
will constitute an Event of Default with such notice requirement but
without such passage of time requirement);
(d) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary or the
acceleration of the final stated maturity of any such Indebtedness if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to
pay principal at final maturity or which has been accelerated, aggregates
$2,500,000 or more at any time;
(e) one or more judgments in an aggregate amount in excess of
$2,500,000 shall have been rendered against the Company or any of its
Restricted Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and non-appealable;
(f) the Company or any of its Significant Subsidiaries pursuant to or
under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief against it
in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts
generally; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
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(i) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries for all or substantially all of their
properties taken as a whole, or
(iii) orders the liquidation of the Company, the Company or
any of their Significant Subsidiaries,
and in each case the order or decree remains unstayed and in effect for 60
days.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01 (f) or (g) relating to the Company) shall occur and be continuing,
the Trustee or the Holders of at least 25% in principal amount of outstanding
Notes may declare the principal of and accrued interest on all the Notes to be
due and payable by notice in writing to the Company and the Trustee specifying
the respective Event of Default and the same shall become immediately due and
payable. If an Event of Default specified in Section 6.01 (f) or (g) with
respect to the Company occurs and is continuing, then all unpaid principal of,
and premium, if any, and accrued and unpaid interest on all of the outstanding
Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Notes as described in the preceding paragraph, the Holders of a majority in
principal amount of the Notes may rescind and cancel such declaration and its
consequences (a) if the rescission would not conflict with any judgment or
decree, (b) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (c) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid, (d) if the
Company has paid the Trustee its reasonable compensation and reimbursed the
Trustee for its expenses, disbursements and advances and (e) in the event of the
cure or waiver of an Event of Default of the type described in Section 6.01, the
Trustee shall have received an Officers' Certificate and an opinion of counsel
that such Event of Default has been cured or waived. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
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SECTION 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of, premium, if any, or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.
(b) All rights of action and claims under this Indenture or the Notes
may be enforced by the Trustee even if it does not possess any of the Notes or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Prior to the acceleration of the Notes, the Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may, on behalf of the Holders of all the Notes, waive any existing
Default or Event of Default and its consequences under this Indenture, except a
Default or Event of Default specified in Section 6.01(a) or (b) or in respect of
any provision hereof which cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 9.02. When a Default or Event of
Default is so waived, it shall be deemed cured and shall cease to exist. This
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of the Notes may not enforce this Indenture or the Notes
except as provided in this Article Six and under the TIA. The Holders of a
majority in aggregate principal amount of the then outstanding Notes have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, PROVIDED, HOWEVER, that the Trustee may refuse to follow any
direction (a) that conflicts with any rule of law or this Indenture, (b) that
the Trustee, in its sole discretion, determines may be unduly prejudicial to the
rights of another Holder, or (c) that may expose the Trustee to personal
liability for which adequate indemnity provided to the Trustee against such
liability is not reasonably assured to it; PROVIDED, FURTHER, HOWEVER, that the
Trustee may take any other action deemed proper by the Trustee that is not
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inconsistent with such direction or this Indenture. This Section 6.05 shall be
in lieu of Section 316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of any Notes shall have any right to institute any
proceeding with respect to this Indenture or the Notes or any remedy hereunder,
unless the Holders of at least 25% in aggregate principal amount of the
outstanding Notes have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as Trustee under the Notes and this
Indenture, the Trustee has failed to institute such proceeding within 30 days
after receipt of such notice, request and offer of indemnity and the Trustee,
within such 30-day period, has not received directions inconsistent with such
written request by Holders of a majority in aggregate principal amount of the
outstanding Notes.
The foregoing limitations shall not apply to a suit instituted by a
Holder of a Note for the enforcement of the payment of the principal of,
premium, if any, or interest on, such Note on or after the respective due dates
expressed or provided for in such Note.
A Holder may not use this Indenture to prejudice the rights of any
other Holders or to obtain priority or preference over such other Holders.
SECTION 6.07. RIGHT OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision in this Indenture, the right of
any Holder of a Note to receive payment of the principal of, premium, if any,
and interest on such Note, on or after the respective due dates expressed or
provided for in such Note, or to bring suit for the enforcement of any such
payment on or after the respective due dates, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company, or any other obligor on the
Notes for the whole amount of the principal of, premium, if any, and accrued
interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest,
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in each case at the rate per annum provided for by the Notes and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and any other amounts due the Trustee
pursuant to the provisions of Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, counsel, accountants and
experts) and the Holders allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article Six it
shall pay out such money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the cost
and expenses of collection;
Second: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for interest;
Third: to Holders for the principal amounts (including any premium)
owing under the Notes, ratably,
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without preference or priority of any kind, according to the amounts due
and payable on the Notes for the principal (including any premium); and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court may in its discretion require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee, any suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in aggregate principal amount of the outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person
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would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.
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(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 11.04 and 11.05.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel and the written advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect to any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives
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of the Company, including the Company's accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of its
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders have offered to the Trustee reasonable
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request,
order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.08 is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of their covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, the Company,
or any of the Subsidiaries, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Company's
use of the proceeds from the Notes, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement of the Company in this
Indenture or the Notes other than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer, the Trustee
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shall mail to each Holder notice of the uncured Default or Event of Default
within 90 days after obtaining knowledge thereof. Except in the case of a
Default or an Event of Default in payment of principal of, or interest on, any
Note, including an accelerated payment, a Default in payment on the Change of
Control Payment Date pursuant to a Change of Control Offer or on the Net
Proceeds Offer Payment Date pursuant to a Net Proceeds Offer and a Default in
compliance with Article Five hereof, the Trustee may withhold the notice if and
so long as its Board of Directors, the executive committee of its Board of
Directors or a committee of its directors and/or Trust Officers in good faith
determines that withholding the notice is in the interest of the Holders. The
foregoing sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso to Section 315(b) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after May 15 of each year beginning with 1998, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as has been agreed to in writing signed by the
Company and the Trustee. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents, counsel, accountants and experts.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockhold-
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ers, Affiliates and directors and officers for, and hold them each harmless
against, any and all loss, liability, damage, claim or expense (including
reasonable fees and expenses of counsel), including taxes (other than taxes
based on the income of the Trustee) incurred by them except for such actions to
the extent caused by any negligence, bad faith or willful misconduct on their
part, arising out of or in connection with the acceptance or administration of
this trust including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their rights, powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its Obligations hereunder except to the extent such failure shall
have prejudiced the Company. At the Trustee's sole discretion, the Company
shall defend the claim and the Trustee shall cooperate and may participate in
the defense; PROVIDED, HOWEVER, that any settlement of a claim shall be approved
in writing by the Trustee if such settlement would result in an admission of
liability by the Trustee or if such settlement would not be accompanied by a
full release of the Trustee for all liability arising out of the events giving
rise to such claim. Alternatively, the Trustee may at its option have separate
counsel of its own choosing and the Company shall pay the reasonable fees and
expenses of such counsel.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or premium, if any, or interest on particular
Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) occurs, such expenses and the compensation
for such services are intended to constitute expenses of administration under
any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee and appoint a successor Trustee with the Company's consent, by so
notifying the Company and the Trustee. The Company may remove the Trustee if:
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(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The Company shall mail notice of such successor Trustee's
appointment to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving
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or transferee corporation without any further act shall, if such resulting,
surviving or transferee corporation is otherwise eligible hereunder, be the
successor Trustee; PROVIDED, HOWEVER, that such corporation shall be otherwise
qualified and eligible under this Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the
case of a Trustee that is a subsidiary of another Bank or a corporation included
in a bank holding company system, the related bank or bank holding company)
shall have a combined capital and surplus of at least $100,000,000 million as
set forth in its most recent published annual report of condition, and have a
Corporate Trust Office in the City of New York. In addition, if the Trustee is
a subsidiary of another Bank or a corporation included in a bank holding company
system, the Trustee, independently of such bank or bank holding company, shall
meet the capital requirements of TIA Section 310(a)(2). The Trustee shall
comply with TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. The provisions of TIA
Section 310 shall apply to the Company, as obligor of the Notes.
SECTION 7.11. PREFERENTIAL COLLECTION OF
CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture will be discharged and will cease to be of further
effect (except as to surviving rights or registration of transfer or exchange of
the Notes, as expressly provided for in this Indenture) as to all outstanding
Notes when (a) either (i) all Notes, theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been
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replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (ii) all Notes not theretofore delivered to the
Trustee for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be; (b)
the Company has paid all other sums payable under this Indenture by the Company;
and (c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel stating that all conditions precedent under this Indenture
relating to the satisfaction and discharge of this Indenture have been complied
with; PROVIDED, HOWEVER, that such counsel may rely, as to matters of fact, on a
certificate or certificates of officers of the Company.
The Company may, at its option and at any time, elect to have its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the outstanding
Notes, except for (a) the rights of Holders to receive payments in respect of
the principal of, premium, if any, and interest on the Notes when such payments
are due, (b) the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payments, (c) the
rights, powers, trust, duties and immunities of the Trustee and the Company's
obligations in connection therewith and (d) the Legal Defeasance provisions of
this Section 8.01. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to covenants
contained in Sections 4.04, 4.08 and 4.10 through 4.19 and Article Five
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Notes. In the event of Covenant Defeasance, those events described under
Section 6.01 (except those events described in Section 6.01(a),(b),(f) and (g))
will no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders cash in United States dollars, non-callable
U.S. Government Obligations, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the Notes on the stated date for payment thereof or on the
applicable Redemption Date, as the case may be;
(b) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel shall confirm that, the Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and in either case, and (iii) the Holders
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;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default
under Section 6.01(f) or (g) from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date
of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
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(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with;
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; and
(i) certain other customary conditions precedent are satisfied.
Notwithstanding the foregoing, the opinion of counsel required by
clauses (b)(i) and (c) above need not be delivered if all the Notes not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the maturity date within one year,
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by such
Trustee in the name, and at the expense, of the Company.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.01, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal of
and interest on the Notes. The Trustee shall be under no obligation to invest
said U.S. Legal Tender or U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
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SECTION 8.03. REPAYMENT TO THE COMPANY.
Subject to Sections 7.07 and 8.01, the Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess U.S. Legal Tender or
U.S. Government Obligations held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for one year;
PROVIDED, HOWEVER, that the Company shall, if requested by the Trustee or Paying
Agent, give to the Trustee or Paying Agent, indemnification reasonably
satisfactory to it against any and all liability which may be incurred by it by
reason of such paying; PROVIDED, FURTHER, that the Trustee or such Paying Agent,
before being required to make any payment, may at the expense of the Company
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed and that after a date specified therein which shall be at
least 30 days from the date of such publication or mailing any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to
the Company, Holders entitled to such money must look to the Company for payment
as general creditors unless an applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 8.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.01; PROVIDED, HOWEVER, that if the Company has made any payment
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
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SECTION 8.05. ACKNOWLEDGMENT OF DISCHARGE
BY TRUSTEE.
After (i) the conditions of Section 8.01 have been satisfied, (ii) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in Section 8.01,
PROVIDED the legal counsel delivering such Opinion of Counsel may rely as to
matters of fact on one or more Officers' Certificates of the Company.
ARTICLE NINE
MODIFICATION OF THE INDENTURE
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
Subject to the provisions of Section 9.02, the Company and the Trustee
may amend, waive or supplement this Indenture without notice to or consent of
any Holder: (a) to cure any ambiguity, defect or inconsistency; (b) to comply
with Section 5.01 of this Indenture; (c) to provide for uncertificated Notes in
addition to certificated Notes; (d) to comply with any requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the TIA; or (e) to make any change that would provide any additional
benefit or rights to the Holders or that does not adversely affect the rights of
any Holder. Notwithstanding the foregoing, the Trustee and the Company may not
make any change pursuant to this Section 9.01 that adversely affects the rights
of any Holder under this Indenture without the consent of such Holder. In
formulating its opinion on such matters, the Trustee will be entitled to rely on
such evidence as it deems appropriate, including, without limitation, solely on
an Opinion of Counsel.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations which
may be therein contained, but
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the Trustee may but shall not be obligated to enter into such amended or
supplemental Indenture which affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Notes or any amended or supplemental Indenture with the written consent of
the Holders of Notes of not less than a majority in aggregate principal amount
of the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06, the Trustee shall join
with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its sole discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture
or waiver. Subject to Sections 6.04 and 6.07, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance in
a particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder of the Notes affected
thereby, an amendment or waiver may not, directly or indirectly: (i) reduce the
amount of Notes whose Holders must consent to an amendment; (ii) reduce the rate
of or change or have the effect of changing the time for payment of premium, if
any, and interest, including defaulted interest, on any Notes; (iii) reduce the
principal of or change or have the effect of changing the fixed maturity of any
Notes, or change the date on which any Notes may be subject
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to redemption or repurchase, or reduce the redemption or repurchase price
therefor; (iv) make any Notes payable in money other than that stated in the
Notes; (v) make any change in provisions of this Indenture protecting the right
of each Holder to receive payment of premium, if any, principal of and interest
on such Note on or after the due date thereof or to bring suit to enforce such
payment, or permitting Holders of a majority in principal amount of the Notes to
waive Defaults or Events of Default; (vi) amend, change or modify in any
material respect the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control which has occurred or make
and consummate a Net Proceeds Offer with respect to any Asset Sale that has been
consummated or modify any of the provisions or definitions with respect thereto;
or (vii) modify or change any provision of this Indenture or the related
definitions affecting the ranking of the Notes in a manner which adversely
affects the Holders.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; PROVIDED, HOWEVER, that this
Section 9.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officers'
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a Record
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Date is fixed, then notwithstanding the second sentence of the immediately
preceding paragraph, those Persons who were Holders at such Record Date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such Record Date. No such consent shall be valid or effective for
more than 90 days after such Record Date unless consents from Holders of the
requisite percentage in principal amount of outstanding Notes required hereunder
for the effectiveness of such consents shall have also been given and not
revoked within such 90 day period.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determine, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED, HOWEVER, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. In executing such amendment, supplement or waiver the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it, and shall be
fully protected in relying upon an Opinion of Counsel and an Officers'
Certificate of the Company, stating that no Event of Default shall occur as a
result of such amendment, supplement or waiver and that the execution of such
amendment, supplement or waiver is authorized or permitted by this Indenture,
PROVIDED, HOWEVER, that the legal counsel delivering such Opinion of Counsel may
rely as to matters of fact on one or more Officers' Certificates of the Company.
Such Opinion of Counsel shall not be an expense of the Trustee.
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ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. UNCONDITIONAL GUARANTEE.
Subject to the provisions of this Article Ten, each Guarantor, if any,
hereby, jointly and severally, unconditionally and irrevocably guarantees, on a
senior basis (such guarantee to be referred to herein as a "Guarantee") to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company or any other
Guarantor to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest on the Notes (and any Additional
Interest payable thereon) shall be duly and punctually paid in full when due,
whether at maturity, upon redemption at the option of Holders pursuant to the
provisions of the Notes relating thereto, by acceleration or otherwise, and
interest on the overdue principal and (to the extent permitted by law) interest,
if any, on the Notes and all other obligations of the Company or the Guarantors
to the Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07) and all other obligations shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Company to
the Holders under this Indenture or under the Notes, for whatever reason, each
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Notes
shall constitute an event of default under this Guarantee, and shall entitle the
Holders of Notes to accelerate the obligations of the Guarantors hereunder in
the same manner and to the same extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Guarantee is
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affixed to any particular Note, or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each of
the Guarantors hereby waives the benefit of diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that its Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and this Guarantee. This Guarantee is a
guarantee of payment and not of collection. If any Holder or the Trustee is
required by any court or otherwise to return to the Company or to any Guarantor,
or any custodian, trustee, liquidator or other similar official acting in
relation to the Company or such Guarantor, any amount paid by the Company or
such Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
of Notes and the Trustee, on the other hand, (a) subject to this Article Eleven,
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Six for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (b) in the event of any acceleration of such
obligations as provided in Article Six, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor,
determined in accordance with GAAP.
SECTION 10.02. LIMITATIONS ON GUARANTEES.
The obligations of any Guarantor under its Guarantee are limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of the Guarantor will result in the obligations of the Guarantor
under the Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under any laws of the United States, any state of the United States or
the District of Columbia.
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SECTION 10.03. EXECUTION AND DELIVERY OF
GUARANTEE.
To further evidence the Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form of EXHIBIT E, shall be endorsed on each Note authenticated and delivered by
the Trustee. Such Guarantee shall be executed on behalf of each Guarantor by
either manual or facsimile signature of two Officers of the Guarantor, each of
whom, in each case, shall have been duly authorized to so execute by all
requisite corporate action. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any particular Note.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
SECTION 10.04. RELEASE OF THE GUARANTOR.
(a) If no Default exists or would exist under this Indenture, upon
(i) the sale or other disposition of all of the Capital Stock of the Guarantor
by the Company, or (ii) the sale or disposition of all or substantially all of
the assets of the Guarantor in compliance with all of the terms of this
Indenture, the Guarantor's Guarantee shall be released, and the Guarantor shall
be deemed released from all obligations under this Article Ten without any
further action required on the part of the Trustee or any Holder. If the
Guarantor is not so released the Guarantor or the entity surviving the
Guarantor, as applicable, shall remain or be liable under its Guarantee as
provided in this Article Ten.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of the Guarantor upon receipt of a request by the Company or the
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 10.04, PROVIDED the legal
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counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or the Guarantor in order to evidence the release of the Guarantor from
its obligations under its Guarantee endorsed on the Notes and under this Article
Eleven.
Except as set forth in Articles Four and Five and this Section 10.04,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of the Guarantor with or into the Company or shall
prevent any sale or conveyance of the property of the Guarantor as an entirety
or substantially as an entirety to the Company.
SECTION 10.05. WAIVER OF SUBROGATION.
Until this Indenture is discharged and all of the Notes are discharged
and paid in full, each Guarantor hereby irrevocably waives and agrees not to
exercise any claim or other rights which it may now or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of the Company's obligations under the Notes or this Indenture and such
Guarantor's obligations under this Guarantee and this Indenture, in any such
instance including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, and any right to participate in any
claim or remedy of the Holders against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
any amounts owing to the Trustee or the Holders of Notes under the Notes, this
Indenture, or any other document or instrument delivered under or in connection
with such agreements or instruments, shall not have been paid in full, such
amount shall have been deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Trustee or the Holders and
shall forthwith be paid to the Trustee for the benefit of itself or such Holders
to be credited and applied to the obligations in favor of the Trustee or the
Holders, as the case may be, whether matured or unmatured, in accordance with
the terms of this Indenture. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that the waiver set forth in this Section 10.05 is knowingly
made in contemplation of such benefits.
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SECTION 10.06. IMMEDIATE PAYMENT.
Each Guarantor agrees to make immediate payment to the Trustee on
behalf of the Holders of all Obligations owing or payable to the respective
Holders upon receipt of a demand for payment therefor by the Trustee to such
Guarantor in writing.
SECTION 10.07. OBLIGATIONS CONTINUING.
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Each Guarantor agrees with the Trustee that it will from
time to time deliver to the Trustee suitable acknowledgments of this continued
liability hereunder.
SECTION 10.08. OBLIGATIONS REINSTATED.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
SECTION 10.09. OBLIGATIONS NOT AFFECTED.
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise.
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SECTION 10.10. WAIVER.
Without in any way limiting the provisions of Section 10.01 hereof,
each Guarantor hereby waives notice or proof of reliance by the Holders upon the
obligations of any Guarantor hereunder, and diligence, presentment, demand for
payment on the Company, protest or notice of dishonor of any of the Obligations,
or other notice or formalities to the Company of any kind whatsoever.
SECTION 10.11. NO OBLIGATION TO TAKE ACTION
AGAINST THE COMPANY.
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Obligations or against the Company or any other Person or any
property of the Company or any other Person before the Trustee is entitled to
demand payment and performance by any or all Guarantors of their liabilities and
obligations under their Guarantees or under this Indenture.
SECTION 10.12. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Company or any third party with respect to the obligations or matters
contemplated by this Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from
any security upon such part of the Obligations as the Holders may see fit
or change any such application
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in whole or in part from time to time as the Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
SECTION 10.13. DEFAULT AND ENFORCEMENT.
If any Guarantor fails to pay in accordance with Section 10.06, the
Trustee may proceed in its name as trustee hereunder in the enforcement of the
Guarantee of any such Guarantor and such Guarantor's obligations thereunder and
hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.
SECTION 10.14. AMENDMENT, ETC.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
SECTION 10.15. ACKNOWLEDGMENT.
Each Guarantor hereby acknowledges communication of the terms of this
Indenture and the Notes and consents to and approves of the same.
SECTION 10.16. COSTS AND EXPENSES.
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee.
SECTION 10.17. NO WAIVER; CUMULATIVE
REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, remedy, power or privilege hereunder or under
this Indenture or the Notes, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under this Indenture or the Notes preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges in the Guarantee and under this Indenture, the
Notes and any other document or instrument between a Guarantor
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and/or the Company and the Trustee are cumulative and not exclusive of any
rights, remedies, powers and privilege provided by law.
SECTION 10.18. SURVIVAL OF OBLIGATIONS.
Without prejudice to the survival of any of the other obligations of
each Guarantor hereunder, the obligations of each Guarantor under Section 10.01
and shall be enforceable against such Guarantor without regard to and without
giving effect to any right of offset or counterclaim available to or which may
be asserted by the Company or any Guarantor.
SECTION 10.19. GUARANTEE IN ADDITION TO OTHER
OBLIGATIONS.
The obligations of each Guarantor under its Guarantee and this Indenture
are in addition to and not in substitution for any other obligations to the
Trustee or to any of the Holders in relation to this Indenture or the Notes
(including the Purchase Agreement and the Registration Rights Agreement).
SECTION 10.20. SEVERABILITY.
Any provision of this Article Ten which is prohibited or unenforceable
in any jurisdiction shall not invalidate the remaining provisions and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction unless its removal
would substantially defeat the basic intent, spirit and purpose of this
Indenture and this Article Ten.
SECTION 10.21. SUCCESSORS AND ASSIGNS.
Each Guarantee shall be binding upon and inure to the benefit of each
Guarantor and the Trustee and the other Holders and their respective successors
and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision
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shall control; PROVIDED, HOWEVER, that this Section 11.01 shall not of itself
require that this Indenture or the Trustee be qualified under the TIA or
constitute any admission or acknowledgment by any party hereto that any such
qualification is required prior to the time this Indenture and the Trustee are
required by the TIA to be so qualified.
SECTION 11.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Town Sports International, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
if to the Trustee:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Division
The Company and the Trustee by written notice to the other may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if hand delivered; when answered
back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that a notice of change of address shall not be deemed to have been
given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar ten (10) days prior to such mailing and
shall be sufficiently given to him if so mailed within the time prescribed.
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Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 11.03. COMMUNICATIONS BY HOLDERS
WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS
TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with (which counsel, as to factual matters, may rely on an
Officers' Certificate).
SECTION 11.05. STATEMENTS REQUIRED IN
CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE, PAYING
AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 11.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 11.08. GOVERNING LAW.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York but without giving effect to
applicable principles of conflicts of law.
SECTION 11.09. NO ADVERSE INTERPRETATION
OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. NO PERSONAL LIABILITY.
No director, officer, employee or stockholder, as such, of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, this Indenture or the Registration Rights Agreement or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and
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releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
SECTION 11.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SECTION 11.14. INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture and the Notes shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
TOWN SPORTS INTERNATIONAL, INC.
By: __________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: __________________________
Name:
Title:
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EXHIBIT A
CUSIP No.: [ ]
TOWN SPORTS INTERNATIONAL, INC.
9 3/4% SENIOR NOTE DUE 2004
No. [ ] $85,000,000
TOWN SPORTS INTERNATIONAL, INC., a New York corporation (the
"Company", which term includes any successor entities), for value received
promise to pay to Cede & Co. or registered assigns the principal sum of
Eighty-Five Million ($85,000,000) Dollars on October 15, 2004.
Interest Payment Dates: April 15 and October 15, commencing April 15,
1998
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOWN SPORTS INTERNATIONAL, INC.
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
Dated:
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Certificate of Authentication
This is one of the 9 3/4% Senior Notes due 2004 referred to in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:____________________________
Authorized Signatory
Date of Authentication:
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(REVERSE OF SECURITY)
9 3/4% Senior Note due 2004
1. INTEREST. TOWN SPORTS INTERNATIONAL, INC., a New York corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from October 16, 1997. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing April 15, 1998. Interest will
be computed on the basis of a 360-day year of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange (including pursuant to an Exchange Offer (as defined in the
Registration Rights Agreement)) after such Record Date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company shall pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust
Company of New York (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of October 16, 1997 (the "Indenture"), between the Company and the Trustee.
This Note is one of a duly authorized issue of Initial Notes of the Company
designated as its 9 3/4% Senior Notes due 2004 (the "Initial Notes"). The Notes
are limited in aggregate principal amount to $125,000,000. The Notes include
the Initial Notes and the
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Exchange Notes (as defined in the Indenture) issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement. The Initial Notes and the
Exchange Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture. Notwithstanding anything to the contrary herein, the Notes
are subject to all such terms, and Holders of Notes are referred to the
Indenture and said Act for a statement of them. The Notes are general unsecured
obligations of the Company.
Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.
5. REDEMPTION. The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after October
15, 2001, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on of the year set
forth below, plus, in each case, accrued and unpaid interest thereon, if any, to
the date of redemption:
YEAR PERCENTAGE
---- ----------
2001............................ 104.875%
2002............................ 102.438%
2003 and thereafter............. 100.000%
At any time, or from time to time, on or prior to October 15, 2000,
the Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to 35% of the Notes at a redemption price equal to
109.750% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; PROVIDED that a least 65% of the
principal amount of Notes originally issued remains outstanding immediately
after any such redemption. In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering, the Company shall make such redemption
not more than 120 days after the consummation of any such Public Equity
Offering.
At any time on or prior to October 15, 2002, the Notes may also be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of
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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 principal amount thereof plus the Applicable Premium as of,
and accrued but unpaid interest, in any, to, the date of redemption (the
"Redemption Date") (subject to the rights of Holders on the relevant record date
to receive interest due on the relevant interest payment date).
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such redemption price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the redemption price plus accrued interest, if any.
7. PUT PROVISIONS. Upon a Change of Control, any Holder of Notes
will have the right, subject to certain conditions specified in the Indenture,
to cause the Company to repurchase all or any part of the Notes of such Holder
at a repurchase price equal to 101% of the principal amount of the Notes to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.
8. OFFERS TO PURCHASE. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. REGISTRATION RIGHTS. Pursuant to a registration rights agreement
between the Company and the Initial Purchaser, the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for Exchange Notes (as defined in the
Indenture), which have been registered under the Securities Act,
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in like principal amount and having terms identical in all material respects as
the Initial Notes. The Holders of the Initial Notes shall be entitled to
receive certain additional interest payments in the event such exchange offer is
not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the registration rights agreement.
10. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but including, under certain
circumstances, its obligation to pay the principal of and interest on the Notes
but without affecting the rights of the Holders to receive such amounts from
such deposits).
14. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for
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uncertificated Notes in addition to or in place of certificated Notes, comply
with any requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA or comply with Article Five of the
Indenture or make any other change that does not adversely affect the rights of
any Holder of a Note.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting any Subsidiaries of the Company, issue Preferred Stock of
any Subsidiaries of the Company, and on the ability of the Company to merge or
consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the Company's or its
Subsidiaries' assets or adopt a plan of liquidation. Such limitations are
subject to a number of important qualifications and exceptions. Pursuant to
Section 4.06 of the Indenture, the Company must annually report to the Trustee
on compliance with such limitations.
16. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
17. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest when due,
for any reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH THE COMPANY AND ITS SUBSIDIARIES. The
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes
A-7
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. NO RECOURSE AGAINST OTHERS. No partner, director, officer,
employee or stockholder, as such, of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, the Indenture or
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
20. GUARANTEES. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
21. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
22. GOVERNING LAW. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.
23. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
24. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to:
A-8
Town Sports International, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
A-9
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint , agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Dated: Signed: _________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:
[CHECK ONE]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended)
that has furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be obtained
from the Trustee); or
A-10
(4) __ outside the United states to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) __ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) __ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; PROVIDED, HOWEVER, that if item
(3), (4), (5) or (7) is checked, the Company or the Trustee may require, prior
to registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or the Company has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.17 of the Indenture shall have
been satisfied.
Dated: ____________________ Signed: ________________________
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee: __________________________________________
A-11
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act 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 the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ______________ _____________________________
NOTICE: To be executed by an executive officer
A-12
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: ________________ _____________________________________
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Note in every particular
without alteration or enlargement
or any change whatsoever and be
guaranteed.
Signature Guarantee: ________________________________________
A-13
EXHIBIT B
CUSIP No.: [ ]
TOWN SPORTS INTERNATIONAL, INC.
9 3/4% SENIOR NOTE DUE 2004, SERIES B
No. [ ] $85,000,000
TOWN SPORTS INTERNATIONAL, INC., a New York corporation (the
"Company", which term includes any successor entities), for value received,
promises to pay to Cede & Co. or registered assigns the principal sum of
Eighty-Five Million ($85,000,000) Dollars on October 15, 2004.
Interest Payment Dates: April 15 and October 15, commencing April 15,
1998
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOWN SPORTS INTERNATIONAL, INC.
By: ___________________________
Name:
Title:
By:___________________________
Name:
Title:
Dated:
B-1
Certificate of Authentication
This is one of the 9 3/4% Senior Notes due 2004, Series B referred to
in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: ___________________________
Authorized Signatory
Date of Authentication:
B-2
(REVERSE OF SECURITY)
9 3/4% Senior Note due 2004, Series B
1. INTEREST. TOWN SPORTS INTERNATIONAL, INC., a New York
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from October 16, 1997. The Company will pay interest semi-annually
in arrears on each Interest Payment Date, commencing April 15, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months and, in
the case of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of October 16, 1997 (the "Indenture"), between the Company and the
Trustee. This Note is one of a duly authorized issue of Exchange Notes of the
Company designated as its 9 3/4% Senior Notes due 2004, Series B (the "Exchange
Notes"). The Notes are limited in aggregate principal amount to $125,000,000.
The Notes include the 9 3/4% Notes due 2004 (the "Initial Notes") and the
Exchange Notes, issued in exchange for the Initial Notes pursuant to a
registration rights agreement. The Initial Notes and the Exchange Notes are
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treated as a single class of securities under the Indenture. Capitalized terms
herein are used as defined in th Indenture unless otherwise defined herein. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and said Act for
a statement of them. The Notes are general unsecured obligations of the
Company.
Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.
5. REDEMPTION. The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after October
15, 2001, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on October 15 of the years
set forth below, plus, in each case, accrued and unpaid interest, if any,
thereon to the date of redemption:
YEAR PERCENTAGE
---- ----------
2001. . . . . . . . . . . . . . . . . . . . 104.875%
2002. . . . . . . . . . . . . . . . . . . . 102.438%
2003 and thereafter . . . . . . . . . . . . 100.000%
At any time, or from time to time, on or prior to October 15, 2000,
the Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to 35% of the Notes at a redemption price equal to
109.750% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; PROVIDED that a least 65% of the
principal amount of Notes originally issued remains outstanding immediately
after any such redemption. In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering, the Company shall make such redemption
not more than 120 days after the consummation of any such Public Equity
Offering.
At any time on or prior to October 15, 2002, the Notes may also be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of Control,
B-4
upon not fewer 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 principal amount thereof plus the Applicable Premium as of,
and accrued but unpaid interest, if any, to, the Redemption Date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date).
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such redemption price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the redemption price plus accrued interest, if any.
7. PUT PROVISIONS. Upon a Change of Control, any Holder of Notes
will have the right, subject to certain conditions specified in the Indenture,
to cause the Company to repurchase all or any part of the Notes of such Holder
at a repurchase price equal to 101% of the principal amount of the Notes to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.
8. OFFERS TO PURCHASE. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, and in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer
B-5
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange of any Notes or portions thereof
selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including certain covenants, including, under certain circumstances, its
obligation to pay the principal of and interest on the Notes but without
affecting the rights of the Holders to receive such amounts from such deposit).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes, comply with any
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA or comply with Article Five of the Indenture or
make any other change that does not adversely affect the rights of any Holder of
a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of their Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create
B-6
dividend or other payment restrictions affecting any Subsidiaries of the
Company, issue Preferred Stock of any Subsidiaries of the Company, and on the
ability of the Company to merge or consolidate with any other Person or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the Company's or its Subsidiaries' assets or adopt a plan of liquidation.
Such limitations are subject to a number of important qualifications and
exceptions. Pursuant to Section 4.06 of the Indenture, the Company must
annually report to the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest when due,
for any reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH THE COMPANY AND ITS SUBSIDIARIES. The
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Company, its
Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No partner, director, officer,
employee or stockholder, as such, of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Indenture, the Guarantees or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
B-7
19. GUARANTEES. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
20. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. GOVERNING LAW. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Note.
22. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note.
Requests may be made to: Town Sports International, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
B-8
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ____________________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Dated:__________________________ Signed:____________________________
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee: _________________________
B-9
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: _______________ ___________________________________
NOTICE: The signature on this assignment
must correspond with the name as it appears
upon the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed.
Signature Guarantee: _______________________________
B-10
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
[ ], [ ]
[ ]
[ ]
[ ]
Ladies and Gentlemen:
In connection with our proposed purchase of 9 3/4% Senior Notes due
2004 (the "Notes") of Town Sports International, Inc., a New York corporation
(the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated October 9, 1997, relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated in the
section entitled "Transfer Restrictions" of such Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (the "Indenture") as described in the Offering
Memorandum and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act"), and all applicable State securities laws.
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold within the United States or to, or for the account or benefit of,
U.S. persons except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes, we will do so only
(i) to the Company or any subsidiary thereof, (ii) inside the United States
in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A promulgated under the
Securities Act), (iii) inside the United States to an institutional
C-1
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of
the Notes (the form of which letter can be obtained from the Trustee), (iv)
outside the United States in accordance with Rule 904 of Regulation S
promulgated under the Securities Act to non-U.S. persons, (v) pursuant to
the exemption from registration provided by Rule 144 under the Securities
Act (if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by
us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
6. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
C-2
You, the Company, the Trustee and others 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 proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: _________________________
Name:
Title:
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EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
PURSUANT TO REGULATION S
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Re: Town Sports International, Inc.
(the "Company") 9 3/4% Senior Notes due
2004 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized
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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
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EXHIBIT E
FORM OF GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Note the
cash payments in United States dollars of principal of, premium, if any, and
interest on this Note (and including Additional Interest payable thereon) in the
amounts and at the times when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Note, if lawful, and the payment
or performance of all other obligations of the Company under the Indenture (as
defined below) or the Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Article
Eleven of the Indenture and this Guarantee. This Guarantee will become
effective in accordance with Article Eleven of the Indenture and its terms shall
be evidenced therein. The validity and enforceability of any Guarantee shall
not be affected by the fact that it is not affixed to any particular Note.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Indenture dated as of October 16, 1997, between Town Sports
International, Inc., a New York corporation, as Company (the "Company"), and
United States Trust Company of New York, as trustee (the "Trustee"), as amended
or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
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IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
Date:____________________
[NAME OF GUARANTOR], as Guarantor
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
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