EXHIBIT 4.8
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ADVANCE STORES COMPANY, INCORPORATED
_____________________
10-1/4% SENIOR SUBORDINATED NOTES DUE 2008
_____________________
___________
INDENTURE
DATED AS OF October 31, 2001
___________
_____________________
THE BANK OF NEW YORK,
as TRUSTEE
_____________________
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CROSS-REFERENCE TABLE*
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Trust Indenture Act Section Indenture Section
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310 (a)(1)....................................................... 7.10
(a)(2)....................................................... 7.10
(a)(3)....................................................... N.A.
(a)(4)....................................................... N.A.
(a)(5)....................................................... 7.10
(b).......................................................... 7.03;7.10
(c).......................................................... N.A.
311 (a).......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
312 (a).......................................................... 2.06
(b).......................................................... 10.03
(c).......................................................... 10.03
313 (a).......................................................... 7.06
(b)(1)....................................................... 7.06
(b)(2)....................................................... 7.06;7.07
(c).......................................................... 7.06;10.02
(d).......................................................... 7.06
314 (a).......................................................... 4.03;10.05
(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).......................................................... 7.05;10.02
(c).......................................................... 7.01
(d).......................................................... 7.01
(e).......................................................... 6.11
(a).......................................................... 2.14
316 (a)(1)(A).................................................... 6.05
(a)(1)(B).................................................... 6.04
(a)(2)....................................................... N.A.
(b).......................................................... 6.07
(c).......................................................... N.A.
317 (a)(1)....................................................... 6.08
(a)(2)....................................................... 6.09
(b).......................................................... 2.05
318 (a).......................................................... 10.01
(b).......................................................... N.A.
(c).......................................................... 10.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 16
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 16
SECTION 1.04. Rules of Construction.................................... 17
ARTICLE 2
The Securities
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SECTION 2.01. Amount of Securities; Issuable in Series................. 17
SECTION 2.02. Form and Dating.......................................... 18
SECTION 2.03. Execution and Authentication............................. 18
SECTION 2.04. Registrar and Paying Agent............................... 19
SECTION 2.05. Paying Agent to Hold Money in Trust...................... 19
SECTION 2.06. Holder Lists............................................. 20
SECTION 2.07. Transfer and Exchange.................................... 20
SECTION 2.08. Replacement Securities................................... 21
SECTION 2.09. Outstanding Securities................................... 21
SECTION 2.10. Temporary Securities..................................... 21
SECTION 2.11. Cancelation.............................................. 22
SECTION 2.12. Defaulted Interest....................................... 22
SECTION 2.13. CUSIP and ISIN Numbers................................... 22
SECTION 2.14. When Securities Disregarded.............................. 22
ARTICLE 3
Redemption and Prepayment
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SECTION 3.01. Notices to Trustee....................................... 22
SECTION 3.02. Selection of Securities to be Redeemed or Purchased...... 23
SECTION 3.03. Notice of Redemption or Purchase......................... 23
SECTION 3.04. Effect of Notice of Redemption or Repurchase............. 24
SECTION 3.05. Deposit of Redemption or Purchase Price.................. 24
SECTION 3.06. Securities Redeemed in Part.............................. 25
SECTION 3.07. Optional Redemption; Special Redemption.................. 25
SECTION 3.08. Mandatory Redemption..................................... 26
SECTION 3.09. Repurchase Offers........................................ 26
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ARTICLE 4
Covenants
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SECTION 4.01. Payment of Securities.................................. 28
SECTION 4.02. Maintenance of Office or Agency........................ 28
SECTION 4.03. Commission Reports..................................... 28
SECTION 4.04. Compliance Certificate and Notices of Default.......... 29
SECTION 4.05. Taxes.................................................. 30
SECTION 4.06. Stay, Extension and Usury Laws......................... 30
SECTION 4.07. Restricted Payments.................................... 30
SECTION 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries............................... 33
SECTION 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock....................................... 34
SECTION 4.10. Asset Sales............................................ 36
SECTION 4.11. Transactions with Affiliates........................... 37
SECTION 4.12. Liens.................................................. 38
SECTION 4.13. Offer to Purchase Upon Change of Control............... 38
SECTION 4.14. Corporate Existence.................................... 39
SECTION 4.15. Business Activities.................................... 39
SECTION 4.16. Senior Subordinated Debt............................... 39
SECTION 4.17. Limitation on Issuances of Guarantees of Indebtedness.. 39
SECTION 4.18. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries............................... 40
SECTION 4.19. Limitation on Ability of Company to Release Funds
From Escrow........................................... 40
ARTICLE 5
Successors
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SECTION 5.01. Merger, Consolidation or Sale of Assets................ 40
SECTION 5.02. Successor Corporation Substituted...................... 41
ARTICLE 6
Defaults and Remedies
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SECTION 6.01. Events of Default...................................... 41
SECTION 6.02. Acceleration........................................... 43
SECTION 6.03. Other Remedies......................................... 43
SECTION 6.04. Waiver of Defaults..................................... 44
SECTION 6.05. Control by Majority.................................... 44
SECTION 6.06. Limitation on Suits.................................... 44
SECTION 6.07. Rights of Holders of Securities to Receive Payment..... 45
SECTION 6.08. Collection Suit by Trustee............................. 45
SECTION 6.09. Trustee May File Proofs of Claim....................... 45
SECTION 6.10. Priorities............................................. 45
SECTION 6.11. Undertaking for Costs.................................. 46
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ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee......................................... 46
SECTION 7.02. Rights of Trustee......................................... 47
SECTION 7.03. Individual Rights of Trustee.............................. 48
SECTION 7.04. Trustee's Disclaimer...................................... 48
SECTION 7.05. Notice of Defaults........................................ 48
SECTION 7.06. Reports by Trustee to Holders of the Securities........... 48
SECTION 7.07. Compensation and Indemnity................................ 49
SECTION 7.08. Replacement of Trustee.................................... 50
SECTION 7.09. Successor Trustee by Merger, Etc.......................... 50
SECTION 7.10. Eligibility; Disqualification............................. 51
SECTION 7.11. Preferential Collection of Claims Against the Company..... 51
ARTICLE 8
Legal Defeasance and Covenant Defeasance
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SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.. 51
SECTION 8.02. Legal Defeasance and Discharge............................ 51
SECTION 8.03. Covenant Defeasance....................................... 52
SECTION 8.04. Conditions to Legal or Covenant Defeasance................ 52
SECTION 8.05. Deposited Money and U.S. Government Securities
To Be Held in Trust; Other Miscellaneous Provisions...... 54
SECTION 8.06. Repayment to the Company.................................. 54
SECTION 8.07. Reinstatement............................................. 54
ARTICLE 9
Amendment, Supplement and Waiver
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SECTION 9.01. Without Consent of Holders of the Securities.............. 54
SECTION 9.02. With Consent of Holders of Securities..................... 55
SECTION 9.03. Compliance with Trust Indenture Act....................... 56
SECTION 9.04. Revocation and Effect of Consents......................... 56
SECTION 9.05. Notation on or Exchange of Securities..................... 57
SECTION 9.06. Trustee to Sign Amendments, Etc........................... 57
ARTICLE 10
Subordination
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SECTION 10.01. Agreement to Subordinate................................. 57
SECTION 10.02. Liquidation; Dissolution; Bankruptcy..................... 57
SECTION 10.03. Default on Designated Senior Debt........................ 58
SECTION 10.04. Acceleration of Securities............................... 58
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SECTION 10.05. When Distribution Must Be Paid Over........................ 59
SECTION 10.06. Notice by the Company...................................... 59
SECTION 10.07. Subrogation................................................ 59
SECTION 10.08. Relative Rights............................................ 59
SECTION 10.09. Subordination May Not Be Impaired by the Company........... 60
SECTION 10.10. Distribution or Notice to Representative................... 60
SECTION 10.11. Rights of Trustee and Paying Agent......................... 61
SECTION 10.12. Authorization to Effect Subordination...................... 61
SECTION 10.13. Amendments................................................. 61
ARTICLE 11
Guarantee of Securities
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SECTION 11.01. Subsidiary Guarantee....................................... 61
SECTION 11.02. Non-Impairement............................................ 62
SECTION 11.03. Guarantors May Consolidate, Etc., on Certain Terms......... 62
SECTION 11.04. Releases Following Sale of Assets, Merger,
Sale of Capital Stock, Etc................................ 63
SECTION 11.05. Additional Guarantors...................................... 63
SECTION 11.06. Limitation on Guarantor Liability.......................... 64
SECTION 11.07. "Trustee" to Include Paying Agent.......................... 64
ARTICLE 12
Subordination of Subsidiary Guarantees
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SECTION 12.01. Agreement to Subordinate................................... 64
SECTION 12.02. Liquidation; Dissolution; Bankruptcy....................... 64
SECTION 12.03. Default on Designated Senior Debt.......................... 64
SECTION 12.04. Acceleration of Securities................................. 65
SECTION 12.05. When Distribution Must Be Paid Over........................ 65
SECTION 12.06. Notice by Guarantor........................................ 66
SECTION 12.07. Subrogation................................................ 66
SECTION 12.08. Relative Rights............................................ 66
SECTION 12.09. Subordination May Not Be Impaired by the Guarantors........ 66
SECTION 12.10. Distribution or Notice to Representative................... 67
SECTION 12.11. Rights of Trustee and Paying Agent......................... 67
SECTION 12.12. Authorization to Effect Subordination...................... 68
SECTION 12.13. Amendments................................................. 68
ARTICLE 13
Miscellaneous
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SECTION 13.01. Trust Indenture Act Controls............................... 68
SECTION 13.02. Notices.................................................... 68
SECTION 13.03. Communication by Holders of Securities with Other
Holders of Securities..................................... 69
SECTION 13.04. Certificate and Opinion as to Conditions Precedent......... 69
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SECTION 13.05. Statements Required in Certificate or Opinion............. 69
SECTION 13.06. Rules by Trustee and Agents............................... 70
SECTION 13.07. No Personal Liability of Directors, Officers, Employees
and Stockholders......................................... 70
SECTION 13.08. Governing Law............................................. 70
SECTION 13.09. No Adverse Interpretation of Other Agreements............. 70
SECTION 13.11. Severability.............................................. 71
SECTION 13.12. Counterpart Originals..................................... 71
SECTION 13.13. Table of Contents, Headings, Etc.......................... 71
SECTION 13.14. Benefits of Indenture..................................... 71
Appendix A Provisions Relating to Original Securities,
Additional Securities and Exchange Securities
Exhibit A Form of Face of Initial Security
Exhibit B Form of Face of Exchange Security
Exhibit C Form of Supplemental Indenture
Exhibit D Form of Transferee Letter of Representation
INDENTURE, dated as of October 31, 2001, among Advance Stores Company,
Incorporated, a Virginia corporation (the "Company"), as issuer, Advance
Trucking Corporation, a Virginia corporation, LARALEV, INC., a Delaware
corporation, and Western Auto Supply Company, a Delaware corporation
(collectively, the "Guarantors") and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the holders of
(a) the Company's 10-1/4% Senior Subordinated Notes due 2008 issued on the date
hereof (the "Original Securities"), (b) any Additional Securities (as defined
herein) that may be issued on any Issue Date (all such Securities in clauses (a)
and (b) being referred to collectively as the "Initial Securities") and (c) if
and when issued as provided in a Registration Agreement (as defined in Appendix
A hereto (the "Appendix")), the Company's Exchange 10-1/4% Senior Subordinated
Notes due 2008 issued in an Exchange Offer in exchange for any Initial
Securities (the "Exchange Securities" and, together with the Initial Securities,
the "Securities"). On the date hereof, $200,000,000 in aggregate principal
amount of Securities will be initially issued. Subject to the conditions and in
compliance with the covenants set forth herein, the Company may issue an
unlimited aggregate principal amount of Additional Securities.
ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
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"Acquired Debt" means, with respect to any specified Person, (i)
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Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person or assumed in connection with the acquisition of any asset used or useful
in a Permitted Business acquired by such specified Person; provided that such
Indebtedness was not incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Subsidiary of such specified
Person, or such acquisition, as the case may be.
"Acquisition" means the acquisition by the Company of Discount
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pursuant to the Merger Agreement.
"Additional Securities" means any 10-1/4% Senior Subordinated Notes
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due 2008 issued under the terms of this Indenture subsequent to the Closing
Date.
"Affiliate" of any specified Person means any other Person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
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"Agent" means any Registrar, Paying Agent or co-registrar.
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"Asset Sale" means (i) the sale, lease (other than an operating
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lease), conveyance or other disposition of any assets or rights (including,
without limitation, by way of a sale and leaseback) other than in the ordinary
course of business (provided that the sale, lease (other than an operating
lease), conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of this Indenture under Section 5.01 hereto and/or
the provisions of Section 4.13 hereto and not by the provisions of the Asset
Sales covenant), and (ii) the sale by the Company and the issue or sale by any
of the Restricted Subsidiaries of the Company of Equity Interests of any of the
Company's Restricted Subsidiaries, in the case of either clause (i) or (ii),
whether in a single transaction or a series of related transactions that have a
fair market value (as determined in good faith by the Board of Directors) in
excess of $1.0 million or for net cash proceeds in excess of $1.0 million.
Notwithstanding the foregoing, the term Asset Sale shall not include: (i) a
sale, conveyance or other disposition of assets or rights by the Company to a
Wholly Owned Subsidiary of the Company or an entity that would become a Wholly
Owned Subsidiary upon the consummation of such sale, conveyance or other
disposition or by a Wholly Owned Subsidiary of the Company to the Company or to
a Wholly Owned Subsidiary of the Company, (ii) an issuance of Equity Interests
by a Restricted Subsidiary of the Company to the Company or to a Wholly Owned
Subsidiary of the Company, (iii) a Restricted Payment that is permitted by the
covenant described in Section 4.07 of this Indenture, (iv) the sale and
leaseback of any assets within 270 days of the acquisition of such assets, (v)
foreclosures on assets, (vi) the clearance of inventory, (vii) sales or
dispositions of obsolete equipment or other assets in the ordinary course of
business or (viii) the sale, conveyance or other disposition of accounts
receivables and related assets customarily transferred in connection with a
Qualified Receivables Transaction.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
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state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
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any authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
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"Capital Lease Obligation" means, at the time any determination
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thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
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stock, (ii) in the case of an association or business entity, any and all
shares, interests, participation, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) securities issued or unconditionally and
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fully guaranteed or insured by the full faith and credit of the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (ii) obligations issued or
fully guaranteed 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,
3
having one of the two highest ratings obtainable from either Standard & Poor's
Ratings Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), (iii)
certificates of deposit and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers' acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any lender
party to the Senior Credit Facility or with any domestic commercial bank having
capital and surplus in excess of $250.0 million, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (i) and (iii), above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having one of the two of the highest ratings obtainable from
either Moody's or S&P and in each case maturing within one year after the date
of acquisition and (vi) investments in funds investing at least 90% of its
assets in investments of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the following: (i)
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the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that (A) any "person" (as such term is
defined in Section 3(a)(9) of the Exchange Act), other than the Principals and
their Related Parties, becomes the "beneficial owner" (as such term is defined
in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of
50% or more of the Voting Stock of the Company (measured by voting power rather
than number of shares) or (B) any "person" (as defined above), other than the
Principals and their Related Parties becomes the "beneficial owner" (as defined
above) of more than 33 1/3% of the Voting Stock of the Company (measured by
voting power rather than number of shares) and the Principals and their Related
Parties beneficially own, directly or indirectly, in the aggregate a lesser
percentage of the Voting Stock of the Company than such other "person", (ii) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors or (iii) the Company consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges with
or into, the Company, in any such event pursuant to a transaction in which any
of the outstanding Voting Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction where
(A) the Voting Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person and (B) either (1) the
"beneficial owners" (as defined above) of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly through one or
more subsidiaries, not less than a majority of the total Voting Stock of the
surviving or transferee corporation immediately after such transaction or (2) if
immediately prior to such transaction the Company is a direct or indirect
subsidiary of any other Person (such other Person, the "Holding Company"), then
the "beneficial owners" (as defined above) of the Voting Stock of such Holding
Company immediately prior to such transaction own, directly or indirectly
through one or more subsidiaries not less than a majority of the Voting Stock of
the surviving or transferee corporation immediately after such transaction.
"Closing Date" means the date of this Indenture
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission.
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"Company" means Advance Stores Company, Incorporated, a Virginia
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corporation, and its permitted successors.
4
"Consolidated Cash Flow" means, with respect to any Person for any
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period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income of such Person and its Restricted Subsidiaries), plus
(ii) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income, plus (iii)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of a prepaid cash expenses that were paid
in a prior period) and other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
charges in any future period or amortization of prepaid cash charge that was
paid in a prior period) of such Person and its Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income, plus (v) any interest
expense on Indebtedness of another Person that is Guaranteed by such Person or
any of its Restricted Subsidiaries or secured by a Lien on assets of such Person
or any of its Restricted Subsidiaries, in each case, to the extent that such
interest expense was deducted in computing such Consolidated Net Income, plus
(vi)(a) fees and expenses incurred in connection with the Recapitalization and
deducted in the calculation of Consolidated Net Income and (b) bonuses paid for
management and other employees of the Company and its subsidiaries in connection
with, and substantially concurrently with, the Recapitalization in an amount not
to exceed in the aggregate $11.5 million, minus (vii) non-cash items increasing
such Consolidated Net Income for such period, in each case, on a consolidated
basis and determined in accordance with GAAP. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the depreciation
and amortization and other non-cash charges of, a Restricted Subsidiary of a
Person shall be added to Consolidated Net Income to compute Consolidated Cash
Flow only to the extent (and in the same proportion) that the Net Income of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person.
"Consolidated Net Income" means, with respect to any Person for any
-----------------------
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP,
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income of, or any dividends or other
distributions from, any Unrestricted Subsidiary, to the
5
extent otherwise included, shall be excluded, except to the extent actually
distributed to the Company or one of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
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member of the Board of Directors of the Company or any Holding Company of the
Company who (i) was a member of such Board of Directors on the date of the 1998
Notes Indenture immediately after consummation of the Recapitalization or (ii)
was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were either members of
such Board at the time of such nomination or election or are successor
Continuing Directors appointed by such Continuing Directors (or their
successors).
"Corporate Trust Office of the Trustee" shall be at the address of the
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Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agent" means The Chase Manhattan Bank in its capacity as
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Administrative Agent for the lenders party to the Senior Credit Facility or any
successor thereto or any person otherwise appointed.
"Credit Facilities" means, with respect to the Company and its
-----------------
Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Senior Credit Facility) or commercial paper facilities with
banks or other institutional lenders, providing for revolving credit loans, term
loans, receivables financing (other than a Qualified Receivables Transaction) or
letters of credit and related security and collateral agreements, in each case,
as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder; provided that such
increase in borrowings is permitted under the covenant contained in Section 4.09
hereto or adding Restricted 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.
"Default" means any event that is or with the passage of time or the
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giving of notice or both would be an Event of Default.
"Designated Senior Debt" means (i) any Senior Debt outstanding under
----------------------
the Senior Credit Facility and (ii) any other Senior Debt permitted under this
Indenture the principal amount of which is or under which the holders thereof
are committed to lend at least $25.0 million or more and that has been
designated by the Company in the instrument creating or evidencing such Senior
Debt as "Designated Senior Debt."
"Discount" means Discount Auto Parts, Inc., a Florida corporation.
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"Disqualified Stock" means any Capital Stock that, by its terms (or by
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the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date on which the Securities mature.
6
"Equity Interests" means Capital Stock and all warrants, options or
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other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Escrow Agreement" means the Escrow Agreement dated the date hereof
----------------
between the Company and The Bank of New York, as escrow agent.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Fixed Charges" means, with respect to any Person for any period, the
-------------
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations, and (ii)
the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; provided, however, that in no event
shall any amortization of deferred financing costs incurred in connection with
the Recapitalization be included in Fixed Charges, and (iii) any interest
expense on Indebtedness of another Person to the extent such Indebtedness is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon), and (iv) the product of (a) (without
duplication) (1) all dividends paid or accrued in respect of Disqualified Stock
which are not treated as interest for tax purposes for such period and (2) all
cash dividend payments on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, other than dividend payments on Equity Interests
payable solely in Equity Interests (other than Disqualified Stock of the
Company), times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
---------------------------
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment or redemption of Indebtedness, or such issuance or redemption of
preferred stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period. In addition, for purposes of making the
computation referred to above, (i) acquisitions that have been made by the
Company or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow and Fixed
Charges for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income and shall reflect any pro forma expense and cost reductions attributable
7
to such acquisitions (as determined in good faith by a responsible financial or
accounting officer of the Company and approved by the Company's Board of
Directors), and (ii) the Consolidated Cash Flow and Fixed Charges attributable
to discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded and Consolidated Cash Flow shall reflect any pro forma expense or cost
reductions relating to such discontinuance or disposition (as determined in good
faith by a responsible financial or accounting officer of the Company and
approved by the Company's Board of Directors), and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its
Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which were in effect on the date of the 1998 Notes Indenture;
provided, however, that all reports and other financial information provided by
the Company to the Holders, the Trustee and/or the Commission shall be prepared
in accordance with generally accepted accounting principles, as in effect at the
date of such report or such other financial information; provided, further,
however, that if there are any differences between such principles and GAAP the
Company shall provide a written explanation thereof.
"Government Securities" means direct obligations of, or obligations
---------------------
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
---------
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor" means any Subsidiary that has issued a Subsidiary
---------
Guarantee.
"Hedging Obligations" means, with respect to any Person, the
-------------------
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or the value of foreign currencies.
"Holder" means a Person in whose name a Security is registered.
------
"Holding" means, prior to the merger of Advance Holding Corporation
-------
with and into Advance Auto Parts, Inc. (the "AHC Merger"), Advance Holding
Corporation, a Virginia corporation, and, after the consummation of the AHC
Merger, Advance Auto Parts, Inc., a Delaware corporation and the corporate
parent of the Company, or its successors.
"Holding Senior Discount Debentures" means the $112,000,000 aggregate
----------------------------------
principal amount of Holding's 12.875% Senior Discount Debentures due 2009 issued
under the indenture dated as of April 15, 1998, between Holding and The Bank of
New York, as successor to the corporate trust business of United States Trust
Company of New York, as trustee.
8
"Indebtedness" means, with respect to any Person, any Obligation of
------------
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing Indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any Indebtedness of any other Person
to the extent such Indebtedness is so Guaranteed. The amount of any
Indebtedness outstanding as of any date shall be the accreted value thereof, in
the case of any Indebtedness that does not require current payments of interest.
"Investments" means, with respect to any Person, all investments by
-----------
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel, relocation and
similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time.
"Insolvency or Liquidation Proceedings" means (i) any insolvency or
-------------------------------------
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding, relative to the Company or to the creditors
of the Company, as such, or to the assets of the Company or (ii) any
liquidation, dissolution, reorganization or winding up of the Company, whether
voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of the Company.
"Issue Date", with respect to any Initial Securities, means the date
-----------
on which such Initial Securities are originally issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
-------------
institutions in the City of New York, the city in which the principal Corporate
Trust Office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment shall be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed,
9
recorded or otherwise perfected under applicable law (including any conditional
sale or other title retention agreement, any lease in the nature thereof, and
any option or other agreement to sell or give a security interest and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means any liquidated damages payable under a
------------------
Registration Agreement.
"Management Note" means any promissory note given by an employee of
---------------
the Company or any Affiliate thereof as part of the purchase price for Equity
Interests in the Company or in Holding.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
----------------
August 7, 2001, among Holding, Advanced Auto Parts, Inc., AAP Acquisition
Corporation, the Company and Discount.
"Net Income" means, with respect to any Person, the net income (loss)
----------
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the
------------
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Indebtedness under the Credit
Facilities) secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"1998 Notes" means the Company's 10-1/4% Senior Subordinated Notes due
----------
2008 issued under the 1998 Notes Indenture.
"1998 Notes Indenture" means the indenture dated as of April 15, 1998,
--------------------
as supplemented, among the Company, as issuer, LARALEV, INC., as guarantor, and
The Bank of New York, as successor to the corporate trust business of United
States Trust Company of New York, as trustee, as in effect on the date hereof.
"1998 Notes Issue Date" means April 15, 1998, the date of the issuance
---------------------
of the 1998 Notes.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
-----------------
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), or (b) is directly or
10
indirectly liable (as a guarantor or otherwise), and (ii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries,
including the stock of any Unrestricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, any principal
-----------
of, premium, if any, and interest on such Indebtedness and all other amounts,
including without limitation, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing,
evidencing, securing or guaranteeing such Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated October 24,
-------------------
2001, relating to the Company's offering and placement of the Original
Securities.
"Officer" means, with respect to any Person, the Chairman of the
-------
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
---------------------
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
------------------
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Pari Passu Indebtedness" means the 1998 Notes and any other
-----------------------
Indebtedness that ranks pari passu in right of payment with the Securities.
"Permitted Asset Swap" means any transfer of properties or assets by
--------------------
the Company or any of its Restricted Subsidiaries in which at least 80% of the
consideration received by the transferor consists of properties or assets (other
than cash) that will be used in the business of such transferor; provided, that
(i) the aggregate fair market value (as determined in good faith by the Board of
Directors of the Company, and in the event that the aggregate fair market value
as so determined exceeds $2.5 million, evidenced by a board resolution, a copy
of which shall be delivered to the Trustee) of the property or assets (including
cash) being transferred by the Company or such Restricted Subsidiary, as the
case may be, is not greater than the aggregate fair market value (as determined
in good faith by the Board of Directors of the Company) of the property or
assets (including cash) received by the Company or such Restricted Subsidiary,
as the case may be, in such exchange and (ii) the aggregate fair market value
(as determined in good faith by the Board of Directors of the Company) of all
property or assets transferred by the Company and any of its Restricted
Subsidiaries in connection with exchanges in any period of twelve consecutive
months shall not exceed $20 million.
"Permitted Business" means the business conducted (or proposed to be
------------------
conducted, including activities referred to as being contemplated by the
Company, as described or referred to in the Company's offering memorandum dated
April 7, 1998, relating to the issuance of the 1998 Notes) by the Company and
the Restricted Subsidiaries as of the 1998 Notes Issue Date and any and all
business that in the good faith judgment of the Board of Directors of the
Company are reasonably related businesses, including reasonably related
extensions or expansions thereof.
11
"Permitted Investments" means (a) any Investment in the Company or in
---------------------
a Restricted Subsidiary of the Company; (b) any Investment in Cash and Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary in a
Person, if as a result of such Investment (i) such Person becomes a Restricted
Subsidiary of the Company or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (d) any Restricted Investment made as a result of the receipt of non-
cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereto or any transaction not constituting an Asset
Sale by reason of the $1.0 million threshold contained in the definition
thereof; (e) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (f) Hedging
Obligations entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with this
Indenture; (g) loans and advances to employees and officers of the Company and
its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1.0 million at any one time outstanding; (h)
Management Notes in an aggregate amount not to exceed $3.0 million at any one
time outstanding; (i) Investments received in settlement of obligations or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of customers or other third parties; and (j) additional
Investments not to exceed $10.0 million at any one time outstanding.
"Permitted Junior Securities" means Equity Interests in the Company or
---------------------------
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Securities are subordinated to Senior Debt
pursuant to Article 10 of this Indenture.
"Permitted Liens" means (i) Liens existing as of the 1998 Notes Issue
---------------
Date to the extent and in the manner such Liens were in effect on the 1998 Notes
Issue Date; (ii) Liens securing Senior Debt or Guarantees of Senior Debt
permitted to be incurred under this Indenture; (iii) Liens securing the
Securities and the Subsidiary Guarantees; (iv) Liens in favor of the Company or
a Wholly Owned Restricted Subsidiary on assets of any Restricted Subsidiary of
the Company; (v) Liens securing Permitted Refinancing Indebtedness which is
incurred to refinance any Indebtedness which has been secured by a Lien
permitted under this Indenture and which has been incurred in accordance with
the provisions hereof; provided, however, that such Liens (A) are not materially
less favorable to the Holders and are not materially 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 its Restricted Subsidiaries not securing the
Indebtedness so refinanced; (vi) 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 its Restricted
Subsidiaries shall have set aside on its books such reserves as may be required
pursuant to GAAP; (vii) 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; (viii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security or similar obligations, 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, indemnity, surety, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (ix) judgment Liens not giving rise to an Event of Default
12
so long as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgement shall not
have been finally terminated or the period within which such proceedings may be
initiated shall not have expired; (x) 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 or any of its Restricted Subsidiaries; (xi) any
interest or title of a lessor under any lease, whether or not characterized as
capital or operating; provided that such Liens do not extend to any property or
assets which is not leased property subject to such lease; (xii) Liens securing
Capital Lease Obligations and Indebtedness incurred in accordance with Section
4.09 hereof; provided, however, that (A) the Indebtedness shall not exceed the
cost (including installation and delivery charges and related sales taxes) of
such property or assets being acquired, remodeled or constructed and shall not
be secured by any property or assets of the Company or any Restricted Subsidiary
of the Company other than the property or assets of the Company or any
Restricted Subsidiary of the Company other than the property and assets being
acquired, remodeled, or constructed and (B) the Lien securing such Indebtedness
shall be created within 180 days of such acquisition or the completion of such
construction or remodeling; (xiii) 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; (xiv) Liens securing reimbursement obligations with respect to letters of
credit which encumber documents and other property relating to such letters of
credit and products and proceeds thereof; (xv) 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; (xvi) Liens securing Hedging Obligations
which Hedging Obligations relate to Indebtedness that is otherwise permitted
under this Indenture; (xvii) Liens securing Acquired Debt incurred in accordance
with Section 4.09 hereof; provided that (A) such Liens secured such Acquired
Debt at the time of and prior to the incurrence of such Acquired Debt by the
Company or a Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired Debt by
the Company or a Restricted Subsidiary of the Company and (B) such Liens do not
extend to or cover any property or assets of the Company or any of its
Restricted Subsidiaries other than the property or assets that secured the
Acquired Debt prior to the time such Indebtedness became Acquired Debt of the
Company or a Restricted Subsidiary of the Company and are not more favorable to
the lienholders than those securing the Acquired Debt prior to the incurrence of
such Acquired Debt by the Company or a Restricted Subsidiary of the Company;
(xviii) leases or subleases granted to others not interfering in any material
respect with the business of the Company or its Restricted Subsidiaries; (xix)
Liens arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any Restricted Subsidiary in the ordinary course
of business; (xx) Liens arising from filing Uniform Commercial Code financing
statements as a precautionary matter with respect to leases; and (xxi) Liens on
accounts receivable and any asset related thereto in connection with a Qualified
Receivables Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
----------------------------------
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, prepay, retire, renew, replace,
defease or refund Indebtedness of the Company or any of its Restricted
Subsidiaries; provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, prepaid, retired,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith including premiums paid, if any, to the holders
thereof); (ii) such Permitted Refinancing Indebtedness has a final maturity date
at or later
13
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, prepaid, retired, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, prepaid, retired, replaced, defeased or refunded is subordinated in
right of payment to the Securities, such Permitted Refinancing Indebtedness has
a final maturity date later than the final maturity date of, and is subordinated
in right of payment to, the Securities on terms at least as favorable to the
Holders of Securities as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means an individual, partnership, corporation, limited
------
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Principals" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Incorporated.
----------
"Qualified Receivables Transaction" means any transaction or series of
---------------------------------
transactions that may be entered into by the Company or any Restricted
Subsidiary pursuant to which the Company or any Restricted Subsidiary may sell,
convey or otherwise transfer to any Person, or may grant a security interest in,
any accounts receivable (whether now existing or arising in the future) of the
Company or any Restricted Subsidiary and any asset related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred, or in respect of which security interests are
customarily granted, in connection with asset securitization transactions
involving accounts receivable.
"Recapitalization" shall have the meaning assigned to such term in the
----------------
1998 Notes Indenture.
"Related Party" with respect to any Principal means (A) any
-------------
controlling stockholder or a majority (or more) owned Subsidiary of such
Principal or, in the case of an individual, any spouse or immediate family
member of such Principal, or (B) any fund, trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority (or more) controlling interest that consists of
such Principal and/or such other Persons referred to in the immediately
preceding clause (A).
"Responsible Officer" when used with respect to the Trustee, means any
-------------------
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
---------------------
Investment.
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
14
"Senior Credit Facility" means the credit facility governed by the
----------------------
credit agreement to be entered into among the Company, Holding, the lenders
party thereto, The Chase Manhattan Bank, as administrative agent, Credit Suisse
First Boston and ▇▇▇▇▇▇ Commercial Paper Inc., as co-syndication agents,
concurrently with the Acquisition, as described in the Offering Memorandum.
"Senior Debt" means (i) all Indebtedness of the Company or any
-----------
Guarantor under Credit Facilities and all Hedging Obligations with respect
thereto, (ii) other Indebtedness of the Company or any of its Guarantors
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Securities and
(iii) all Obligations with respect to the foregoing. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (w) any liability
for federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Restricted Subsidiaries or other
Affiliates, (y) any trade payables or (z) any Indebtedness that is incurred in
violation of this Indenture or that was incurred in violation of the 1998 Notes
Indenture (if incurred prior to the Closing Date).
"Significant Subsidiary" means any Subsidiary that would be a
----------------------
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date of
the 1998 Notes Indenture.
"Stated Maturity" means, with respect to any installment of interest
---------------
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (including any scheduled sinking fund payment), and
shall not include any contingent obligations to repay, redeem or repurchase any
such interest or principal prior to the date originally scheduled for the
payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
----------
association or other business entity of which more than 50% of the total Voting
Stock thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantees" means each Guarantee of the obligations with
---------------------
respect to the Securities issued by a Subsidiary pursuant to the terms of this
Indenture.
"Tax Sharing Agreement" means, the tax sharing agreement among
---------------------
Holding, the Company and any one or more of Holding's subsidiaries, as amended
from time to time, so long as the method of calculating the amount of the
Company's (or any Restricted Subsidiary's) payments, if any, to be made
thereunder is not less favorable to the Company than as provided in such
agreement as in effect on the 1998 Notes Issue Date, as determined in good faith
by the Board of Directors of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa- 77bbbb), as amended, as in effect on the date hereof.
15
"Trustee" means The Bank of New York until a successor replaces it in
-------
accordance with the applicable provisions of this Indenture, and thereafter
means the successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
-----------------------
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
board resolution, a copy of which shall be delivered to the Trustee, but only to
the extent that such Subsidiary: (a) has no Indebtedness other than Non-
Recourse Debt; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company; (c) is a Person
with respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; and (d)
has not guaranteed or otherwise directly or indirectly provided credit support
for any Indebtedness of the Company or any of its Restricted Subsidiaries. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
filing with a Trustee a certified copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted hereunder. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness and
issuance of preferred stock by a Restricted Subsidiary of the Company of any
outstanding Indebtedness or outstanding issue of preferred stock of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Indebtedness and preferred stock is permitted to be incurred or issued under
this Indenture, (ii) such Subsidiary becomes a Guarantor and (iii) no Default or
Event of Default would exist following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
------------
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Restricted Subsidiary
-----------------------
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly Owned Restricted Subsidiaries of
such Person.
16
SECTION 1.02. Other Definitions.
------------------
Term Defined in Section
---- ------------------
"Affiliate Transaction" 4.11
"Appendix" Preamble
"Asset Sale Offer" 4.10
"Asset Sale Offer Triggering Event" 4.10
"Change of Control Offer" 4.13
"Change of Control Payment" 4.13
"Change of Control Payment Date" 4.13
"Covenant Defeasance" 8.03
"Custodian" 6.01
"Definitive Securities" Appendix A
"Depositary" Appendix A
"Event of Default" 6.01
"Excess Proceeds" 4.10
"Exchange Offer" Appendix A
"Exchange Securities" Preamble
"Global Securities" Appendix A
"Guaranteed Debt" 4.17
"incur" 4.09
"Initial Securities" Preamble
"Legal Defeasance" 8.02
"Non-Payment Default" 10.03
"Offer Amount" 3.09
"Offer Period" 3.09
"Original Securities" Preamble
"Pari Passu Indebtedness" 4.10
"Payment Blockage Notice" 10.03
"Paying Agent" 2.04
"Payment Default" 6.01
"Permitted Debt" 4.09
"protected purchaser" 2.08
"Purchase Date" 3.09
"Registrar" 2.04
"Registration Agreement" Appendix A
"Representative" 10.05
"Repurchase Offer" 3.09
"Restricted Payments" 4.07
"Securities Custodian" Appendix A
"Special Redemption" 3.07
"Special Redemption Date" 3.07
"Special Redemption Price" 3.07
"Transfer Restricted Securities" Appendix A
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
17
"indenture securities" means the Securities and the Subsidiary
--------------------
Guarantees;
"indenture security holder" means a Holder of a Security;
-------------------------
"indenture to be qualified" means this Indenture;
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee;
----------------- ---------------------
"obligor" on the Securities means the Company, each Guarantor and any
-------
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them therein.
SECTION 1.04. Rules of Construction. Unless the context otherwise
----------------------
requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor sections or rules
adopted by the Commission from time to time.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Amount of Securities; Issuable in Series. The
-----------------------------------------
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture shall not be limited. The Securities may be
issued in one or more series. All Securities of any one series shall be
substantially identical except as to denomination.
With respect to any Additional Securities issued after the Closing
Date (except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 2.07, 2.08, 2.09, 2.10 or 3.06 or the Appendix), there shall be (a)
established in or pursuant to a resolution of the Board of Directors and (b)(i)
set forth or determined in the manner provided in an Officers' Certificate or
(ii) established in one or more indentures supplemental hereto, prior to the
issuance of such Additional Securities:
18
(1) whether such Additional Securities shall be issued as part of a
new or existing series of Securities and the title of such Additional
Securities (which shall distinguish the Additional Securities of the series
from Securities of any other series);
(2) the aggregate principal amount of such Additional Securities
which may be authenticated and delivered under this Indenture, which may be
in an unlimited aggregate principal amount;
(3) the issue price and issuance date of such Additional Securities,
including the date from which interest on such Additional Securities shall
accrue;
(4) if applicable, that such Additional Securities shall be issuable
in whole or in part in the form of one or more Global Securities and, in
such case, the respective depositaries for such Global Securities, the form
of any legend or legends which shall be borne by such Global Securities in
addition to or in lieu of those set forth in Exhibit A hereto and any
circumstances in addition to or in lieu of those set forth in Section 2.3
of the Appendix in which any such Global Security may be exchanged in whole
or in part for Additional Securities registered, or any transfer of such
Global Security in whole or in part may be registered, in the name or names
of Persons other than the depositary for such Global Security or a nominee
thereof; and
(5) if applicable, that such Additional Securities shall not be
issued in the form of Initial Securities as set forth in Exhibit A, but
shall be issued in the form of Exchange Securities as set forth in Exhibit
B.
If any of the terms of any Additional Securities are established by
action taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Securities.
SECTION 2.02. Form and Dating. Provisions relating to the Original
----------------
Securities, the Additional Securities and the Exchange Securities are set forth
in the Appendix, which is hereby incorporated in and expressly made a part of
this Indenture. The (a) Original Securities and the Trustee's certificate of
authentication and (b) any Additional Securities (if issued as Transfer
Restricted Securities) and the Trustee's certificate of authentication shall
each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and any Additional Securities issued other than as Transfer
Restricted Securities and the Trustee's certificate of authentication shall each
be substantially in the form of Exhibit B hereto, which is hereby incorporated
in and expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or any Guarantor is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The Securities shall be issuable only in registered form without interest
coupons and only in denominations of $1,000 and integral multiples thereof.
SECTION 2.03. Execution and Authentication. Two Officers shall sign
-----------------------------
the Securities for the Company by manual or facsimile signature.
19
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Responsible Officer, a copy of which
shall be furnished to the Company. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.04. Registrar and Paying Agent. (a) The Company shall
---------------------------
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Company initially appoints the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian with respect to the Global Securities.
(b) The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically organized Wholly Owned Subsidiaries may act
as Paying Agent or Registrar.
(c) The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
-------- -------
that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent
may resign at any time upon written notice to the Company and the Trustee.
(d) The Trustee is authorized to enter into a letter of representation
with the Depositary in the form provided to the Trustee by the Company and to
act in accordance with such letter.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due
------------------------------------
date of the principal of and interest and liquidated damages (if any) on any
Security, the Company shall
20
deposit with the Paying Agent (or if the Company or a Wholly Owned Subsidiary is
acting as Paying Agent, segregate and hold in trust for the benefit of the
Persons entitled thereto) a sum sufficient to pay such principal, interest and
liquidated damages (if any) when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal of and interest and liquidated
damages (if any) on the Securities, and shall notify the Trustee of any default
by the Company in making any such payment. If the Company or a Subsidiary of the
Company acts as Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.06. 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 Holders. If the Trustee is not the Registrar, the
Company shall furnish, or cause the Registrar to furnish, to the Trustee, in
writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Holders.
SECTION 2.07. Transfer and Exchange. The Securities shall be issued
----------------------
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer and in compliance with the Appendix. When
a Security is presented to the Registrar with a request to register a transfer,
the Registrar shall register the transfer as requested if its requirements
therefor are met. When Securities are presented to the Registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. The Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Guarantors, the Trustee, the Paying Agent, and the
Registrar may deem and treat the Person in whose name a Security is registered
as the absolute owner of such Security for the purpose of receiving payment of
principal of and (subject to paragraph 2 of the Securities) interest, if any, on
such Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, any Guarantor, the Trustee, the
Paying Agent, or the Registrar shall be affected by notice to the contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interest in such Global Security
may be effected only through a book-entry system maintained by (a) the Holder of
such Global Security (or its agent) or (b) any Holder of a beneficial interest
in such Global Security, and that ownership of a beneficial interest in such
Global Security shall be required to be reflected in a book entry.
21
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.08. Replacement Securities. If a mutilated Security is
-----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the New York Uniform Commercial Code are met, such that the
Holder (a) satisfies the Company or the Trustee within a reasonable time after
such Holder has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification, (b)
makes such request to the Company or the Trustee prior to the Security being
acquired by a protected purchaser as defined in Section 8-303 of the New York
Uniform Commercial Code (a "protected purchaser") and (c) satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment
of the Trustee to protect the Company, the Trustee, the Paying Agent and the
Registrar from any loss that any of them may suffer if a Security is replaced.
The Company and the Trustee may charge the Holder for their expenses in
replacing a Security. In the event any such mutilated, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the
Company in its discretion may pay such Security instead of issuing a new
Security in replacement thereof.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section 2.08 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.09. Outstanding Securities. Securities outstanding at any
-----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. Subject to Section 2.14, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal, interest and liquidated damages, if any, payable on that date
with respect to the Securities (or portions thereof) to be redeemed or maturing,
as the case may be, and the Paying Agent is not prohibited from paying such
money to the Holders on that date pursuant to the terms of this Indenture, then
on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Securities. In the event that Definitive
---------------------
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
Definitive
22
Securities and make them available for delivery in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder.
SECTION 2.11. Cancelation. The Company at any time may deliver
------------
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and shall dispose of canceled Securities in accordance with its
customary procedures or deliver canceled Securities to the Company pursuant to
written direction by an Officer. The Company may not issue new Securities to
replace Securities it has redeemed, paid or delivered to the Trustee for
cancelation. The Trustee shall not authenticate Securities in place of canceled
Securities other than pursuant to the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Company defaults in a
-------------------
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the Persons who
are Holders on a subsequent special record date. The Company shall fix or cause
to be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Holder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP and ISIN Numbers. The Company in issuing the
-----------------------
Securities may use "CUSIP" and "ISIN" numbers (if then generally in use) and, if
so, the Trustee shall use "CUSIP" and "ISIN" numbers in notices of redemption as
a convenience to Holders; provided, however, that any such notice may state that
-------- -------
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" and "ISIN" numbers.
SECTION 2.14. When Securities Disregarded. In determining whether
----------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, any Guarantor or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any Guarantor shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
ARTICLE 3
Redemption and Prepayment
-------------------------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
-------------------
Securities pursuant to the optional redemption provisions of Section 3.07(a) or
is required to redeem Securities pursuant to Section 3.07(b), it shall furnish
to the Trustee an Officers' Certificate
23
setting forth (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Securities
to be redeemed and (iv) the redemption price. The Company shall give notice to
the Trustee provided for in this paragraph at least 45 days but not more than 60
days before a redemption date if the redemption is pursuant to Section 3.07(a)
or at least 15 days prior to the Special Redemption Date if the redemption is
pursuant to Section 3.07(b), unless in each case, a shorter period is acceptable
to the Trustee.
If the Company is required to make an offer to purchase Securities
pursuant to Section 4.10 or 4.13 hereof, it shall furnish to the Trustee, at
least 30 days before the scheduled purchase date, an Officers' Certificate
setting forth (i) the section of this Indenture pursuant to which the offer to
purchase shall occur, (ii) the terms of the offer, (iii) the principal amount of
Securities to be purchased, (iv) the purchase price, (v) the purchase date and
(vi) and further setting forth a statement to the effect that (a) the Company or
one its Subsidiaries has affected an Asset Sale and there are Excess Proceeds
aggregating more than $10.0 million or (b) a Change of Control has occurred, as
applicable.
SECTION 3.02. Selection of Securities to be Redeemed or Purchased.
----------------------------------------------------
If less than all of the Securities are to be redeemed or repurchased at any
time, selection of Securities for redemption or repurchase will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed, or, if the Securities are
not so listed, on a pro rata basis, by lot or by such other method as the
Trustee shall deem fair and appropriate; provided that no Securities of $1,000
principal amount or less shall be redeemed or repurchased in part. Notices of
redemption or repurchase shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date or repurchase date to each Holder
of Securities to be redeemed or repurchased at its registered address. Notices
of redemption or repurchase may not be conditional. If any Security is to be
redeemed or repurchased in part only, the notice of redemption or repurchase
that relates to such Security shall state the portion of the principal amount
thereof to be redeemed or repurchased. A new Security in principal amount equal
to the unredeemed or unpurchased portion thereof will be issued in the name of
the Holder thereof upon cancellation of the original Security. Securities
called for redemption or repurchase become due on the date fixed for redemption
or repurchase. On and after the redemption date or repurchase date, interest
and Liquidated Damages, if any, will cease to accrue on Securities or portions
of them called for redemption or repurchase unless the Company defaults in
making the redemption or repurchase payment.
SECTION 3.03. Notice of Redemption or Purchase. At least 30 days but
---------------------------------
not more than 60 days before a redemption date or repurchase date (except in the
case of a redemption pursuant to Section 3.07(b), in which case notice shall be
mailed at least 10 days prior to the Special Redemption Date), the Company shall
mail or cause to be mailed by first class mail, a notice of redemption or notice
of repurchase to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date or repurchase date, as the case may be;
(2) the redemption price or repurchase price, as the case may be, for
the Securities and accrued and unpaid interest, and Liquidated Damages, if
any;
(3) if any Security is being redeemed or repurchased in part, the
portion of the principal amount of such Securities to be redeemed and that,
after the redemption date,
24
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion shall be issued upon surrender of
the original Security;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption or repurchase must be
surrendered to the Paying Agent to collect the redemption price or
repurchase price, as the case may be;
(6) that, unless the Company defaults in making such payment,
interest and Liquidated Damages, if any, on Securities called for
redemption or repurchase, as the case may be, ceases to accrue on and after
the redemption date or repurchase date, as the case may be;
(7) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed;
and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP or ISIN number, if any, listed in such notice or printed on
the Securities.
At the Company's request, the Trustee shall give the notice of
redemption or notice of repurchase in the Company's name and at the Company's
expense; provided, however, that the Company shall have delivered to the
Trustee, at least 45 days prior to the redemption date or repurchase date or
such shorter period as shall be acceptable to the Trustee (except in the case of
a redemption pursuant to Section 3.07(b), in which case one Business Day prior
to the mailing date for the notice of such redemption), an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in the notice as provided in the preceding paragraph. The notice
mailed in the manner herein provided shall be conclusively presumed to have been
duly given whether or not the Holder receives such notice. In any case, failure
to give such notice by mail or any defect in the notice to the Holder of any
Security shall not affect the validity of the proceeding for the redemption or
repurchase of any other Security.
SECTION 3.04. Effect of Notice of Redemption or Repurchase. Once
---------------------------------------------
notice of redemption or notice of repurchase is mailed in accordance with
Section 3.03 hereof, Securities called for redemption or repurchase, as the case
may be, become irrevocably due and payable on the redemption date at the
redemption price or on the repurchase date at the repurchase price, as the case
may be, plus accrued and unpaid interest and Liquidated Damages, if any, to such
date. Any such notice may not be conditional.
SECTION 3.05. Deposit of Redemption or Purchase Price. On or before
----------------------------------------
10:00 a.m. (New York City time) on each redemption date or the date on which
Securities must be accepted for purchase pursuant to Section 4.10 or 4.13, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Subsidiaries is Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Securities to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly return
to the Company upon its written request any money deposited with the Trustee or
the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of (including any applicable premium), accrued interest and
Liquidated Damages, if any, on all Securities to be redeemed or purchased.
If Securities called for redemption or tendered in an Asset Sale Offer
or Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent (or, if
25
the Company or any of its Subsidiaries is Paying Agent, shall segregate and hold
in trust) money sufficient to pay the redemption or purchase price of, unpaid
and accrued interest and Liquidated Damages, if any, on all Securities to be
redeemed or purchased, on and after the redemption or purchase date interest and
Liquidated Damages, if any, shall cease to accrue on the Securities or the
portions of Securities called for redemption or tendered and not withdrawn in an
Asset Sale Offer or Change of Control Offer (regardless of whether certificates
for such securities are actually surrendered). If a Security is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name such Security was
registered at the close of business on such record date. If any Security called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal and Liquidated Damages, if any, from the redemption
or purchase date until such principal and Liquidated Damages, if any, is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case, at the rate provided in the Securities and in Section 4.01 hereof.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
----------------------------
Security that is redeemed in part, the Company shall issue and, upon the
Company's written request, the Trustee shall authenticate for the Holder at the
expense of the Company a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption; Special Redemption. (a) Optional
----------------------------------------
Redemption. Except as set forth in Section 3.07(b), the Securities will not be
redeemable at the Company's option prior to April 15, 2003. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003....................................... 105.125%
2004....................................... 103.417%
2005....................................... 101.708%
2006 and thereafter........................ 100.000%
(b) Special Redemption. Notwithstanding the foregoing, in the event
-------------------
that, (i) in the sole judgment of the Company, the Acquisition will not be
consummated by December 31, 2001, then the Company may redeem the Securities, in
whole but not in part, at its sole option prior to January 15, 2002, at a
redemption price (the "Special Redemption Price") in cash equal to 101% of the
issue price of the Securities plus accrued and unpaid interest (including
accrued original issue discount) to the Special Redemption Date or (ii) the
Acquisition has not be consummated on or prior to December 31, 2001, then the
Company will mandatorily redeem all the Securities on January 15, 2002, at the
Special Redemption Price. The "Special Redemption Date" means the earlier of
(a) the date that the Company elects to redeem all the Securities if in the sole
judgment of the Company, the Acquisition will not be consummated by December 31,
26
2001, or (b) January 15, 2002, if the Acquisition is not consummated by
December 31, 2001 (either redemption, a "Special Redemption").
SECTION 3.08. Mandatory Redemption. Except as set forth under
---------------------
Sections 3.07(b), 3.09, 4.10 and 4.13 hereof, the Company shall not be required
to make mandatory redemption or sinking fund payments with respect to the
Securities.
SECTION 3.09. Repurchase Offers. In the event that the Company shall
------------------
be required to commence an offer to all Holders to repurchase Securities (a
"Repurchase Offer") pursuant to Section 4.10 hereof, an "Asset Sale," or
pursuant to Section 4.13 hereof, a "Change of Control Offer," the Company shall
follow the procedures specified below.
A Repurchase Offer shall commence no earlier than 30 days and no later
than 60 days after a Change of Control (unless the Company is not required to
make such offer pursuant to the last paragraph of Section 4.13 hereof) or an
Asset Sale Offer Triggering Event (as defined in Section 4.10), as the case may
be, and remain open for a period of twenty (20) Business Days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five (5)
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Securities required to be
purchased pursuant to Section 4.10 hereof, in the case of an Asset Sale Offer,
or 4.13 hereof, in the case of a Change of Control Offer (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Securities tendered in
response to the Repurchase Offer. Payment for any Securities so purchased shall
be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Securities pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to such Repurchase Offer. The Repurchase
Offer shall be made to all Holders and, to the extent required by Section 4.10,
to all holders of Pari Passu Indebtedness. The notice, which shall govern the
terms of the Repurchase Offer, shall describe the transaction or transactions
that constitute the Change of Control or Asset Sale Offer Triggering Event, as
the case may be, and shall state:
(a) that the Repurchase Offer is being made pursuant to this Section
3.09 and Section 4.10 or 4.13 hereof, as the case may be, and the length of
time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Repurchase Offer shall cease
to accrue interest and Liquidated Damages, if any, after the Purchase Date;
27
(e) that Holders electing to have a Security purchased pursuant to a
Repurchase Offer shall be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Security, duly completed, or transfer by book-entry transfer, to the
Company, the Depositary, or the Paying Agent at the address specified in
the notice not later than the close of business on the last day of the
Offer Period;
(f) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than three Business Days prior to the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Security purchased;
(g) that, if the aggregate principal amount of Securities surrendered
by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(h) that Holders whose Securities were purchased only in part shall
be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered (or transferred by book-entry
transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date,
the Company shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to an
aggregate principal amount of Securities equal to the Offer Amount, together
with accrued and unpaid interest and Liquidated Damages, if any, thereon, to be
held for payment in accordance with the terms of this Section 3.09. On the
Purchase Date, the Company shall, to the extent lawful, (i) accept for payment,
on a pro rata basis to the extent necessary, the Offer Amount in aggregate
principal amount of Securities or portions thereof tendered pursuant to the
Repurchase Offer, or if less than the Offer Amount has been tendered, all
Securities tendered, (ii) deliver or cause the Paying Agent or Depositary, as
the case may be, to deliver to the Trustee Securities so accepted and (iii)
deliver to the Trustee an Officers' Certificate stating that such Securities or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three (3)
Business Days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Securities tendered by such Holder
and accepted by the Company for purchase, plus any accrued and unpaid interest
and Liquidated Damages, if any, thereon to the Purchase Date, and the Company
shall promptly issue a new Security, and the Trustee, shall authenticate and
mail or deliver such new Security, to such Holder, equal in principal amount to
any unpurchased portion of such Holder's Securities surrendered. Any Security
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. So long as no Default has occurred and is continuing, any money
earned on funds held in trust by the Trustee or any Paying Agent and any excess
or remaining funds that may exist following the termination of the Offer Period
shall be promptly remitted to the Company. If any such excess or remaining
funds shall be held by the Company or any of its Subsidiaries in trust, in its
capacity as Paying Agent, then, so long as no Default has occurred and is
continuing, such funds shall be discharged from such trust and, thereafter,
Holders entitled to such funds must look to the Company as a general creditor.
28
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall pay or cause
----------------------
to be paid the principal of, premium, if any, and interest on the Securities on
the dates and in the manner provided in the Securities. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Agreement. Principal, premium and
Liquidated Damages, if any, and interest, shall be considered paid for all
purposes hereunder on the date the Paying Agent if other than the Company or a
Subsidiary thereof holds, as of 10:00 a.m. (New York City time) money deposited
by the Company in immediately available funds and designated for and sufficient
to pay all such principal, premium and Liquidated Damages, if any, and interest,
then due.
The Company shall pay interest (including, to the extent permitted by
applicable law, post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal at the rate equal to 1% per annum in excess of the
then applicable interest rate on the Securities to the extent lawful; it shall
pay interest (including, to the extent permitted by applicable law, post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
--------------------------------
maintain in the Borough of Manhattan, The City of New York an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee or
Registrar) where Securities may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee. The Company may also
from time to time designate one or more other offices or agencies where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, the City
of New York for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.04 hereof.
SECTION 4.03. Commission Reports. Whether or not required by the
-------------------
rules and regulations of the Commission, so long as any Securities are
outstanding, the Company shall furnish to the Holders of Securities (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
29
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of the Company and its
consolidated Subsidiaries and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on
Form 8-K if the Company were required to file such reports, in each case
within the time periods set forth in the Commission's rules and regulations (the
"Required Filing Dates"). In addition, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability by the
Required Filing Dates (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request. In addition, at all times that the Commission does not accept the
filings provided for in the preceding sentence, the Company and the Guarantors
have agreed that, for so long as any Securities remain outstanding, they shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
The financial information to be distributed to Holders of Securities
shall be filed with the Trustee and mailed to the Holders at their addresses
appearing in the register of Securities maintained by the Registrar, promptly
after each Required Filing Date, but in any event no later than 15 days
following any such Required Filing Date.
The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information and, if requested by
the Company and at the Company's expense, the Trustee will deliver such reports
to the Holders under this Section 4.03.
SECTION 4.04. Compliance Certificate and Notices of Default. The
----------------------------------------------
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year and on or before 45 days after the end of the first, second and
third fiscal quarters of each fiscal year, an Officers' Certificate stating that
a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year or fiscal quarter, as the case may be, has been made under
the supervision of the signing Officers with a view to determining whether each
has kept, observed, performed and fulfilled its obligations under this Indenture
(including, with respect to any Restricted Payments made during such fiscal year
or fiscal quarter, as the case may be, the basis upon which the calculations
required by Section 4.07 hereof were computed, which calculations may be based
on the Company's latest available financial statements), and further stating, as
to each such Officer signing such certificate, that, to the best of his or her
knowledge, each entity has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that, to the best of his or her knowledge, no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium or
Liquidated Damages, if any, or interest on the Securities is prohibited or if
such event has occurred, a description of the event and what action the Company
is taking or proposes to take with respect thereto.
The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
30
SECTION 4.05. Taxes. The Company shall pay, and shall cause each of
------
its Subsidiaries to pay, prior to delinquency all material taxes, assessments
and governmental levies, except such as are contested in good faith and by
appropriate proceedings and with respect to which appropriate reserves have been
taken in accordance with GAAP.
SECTION 4.06. Stay, Extension and Usury Laws. The Company and each
-------------------------------
Guarantor covenants (to the extent that it may lawfully do so) that it shall not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.07. Restricted Payments. From and after the date hereof
--------------------
the Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any such
dividend, distribution or other payment made as a payment in connection with any
merger or consolidation involving the Company), other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or dividends or distributions payable to the Company or any Wholly Owned
Subsidiary of the Company; (ii) purchase, redeem or otherwise acquire or retire
for value (including, without limitation, any such purchase, redemption or other
acquisition or retirement for value made as a payment in connection with any
merger or consolidation involving the Company) any Equity Interests of the
Company or any Restricted Subsidiary (other than any such Equity Interests owned
by the Company or any Restricted Subsidiary of the Company); (iii) make any
principal payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Securities, except a payment of principal at Stated Maturity in the
applicable amounts so required; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
immediately after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the 1998 Notes Issue Date (excluding Restricted Payments
permitted by clauses (ii), (iii), (v), (vi), (vii), (ix) and (x) of the
next succeeding paragraph), is less than the sum (without duplication) of
(i) 50% of the Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the 1998 Notes Issue Date to the end of the Company's most
recently
31
ended fiscal quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus (ii) 100% of
the aggregate net cash proceeds received by the Company from the issue or
sale subsequent to the 1998 Notes Issue Date of Equity Interests of the
Company (other than Disqualified Stock) or of Disqualified Stock or debt
securities of the Company that have been converted into or exchanged for
such Equity Interests (other than Equity Interests (or Disqualified Stock
or convertible debt securities) sold to a Restricted Subsidiary of the
Company and other than Disqualified Stock or convertible debt securities
that have been converted into Disqualified Stock), plus (iii) with respect
to any Restricted Investment that was made after the 1998 Notes Issue Date,
(A) to the extent that such Restricted Investment is sold for cash or
otherwise liquidated or repaid for cash, the amount of cash proceeds
received with respect to such Restricted Investment and (B), without
duplication of any amount included in Consolidated Net Income, 100% of any
cash dividends or other cash distributions received in respect of such
Restricted Investment, plus (iv) to the extent not otherwise included in
clause (iii) above, 100% of the net cash proceeds realized upon the sale of
any Unrestricted Subsidiary (less the amount of any reserve established for
purchase price adjustments and less the maximum amount of any
indemnification or similar contingent obligation for the benefit of the
purchaser, any of its Affiliates or any other third party in such sale, in
each case as adjusted for any permanent reduction in any such amount on or
after the date of such sale, other than by virtue of a payment made to such
Person following the 1998 Notes Issue Date) since the 1998 Notes Issue
Date, plus (v) upon the redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary since the 1998 Notes Issue Date, the lesser of (x)
the fair market value of such Subsidiary or (y) the aggregate amount of all
Investments made in such Subsidiary subsequent to the 1998 Notes Issue Date
by the Company and its Restricted Subsidiaries, plus (vi) $15.0 million.
The foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the
Company or any Restricted Subsidiary in exchange for, or in an amount not
in excess of the net cash proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition and any
Net Income resulting therefrom shall be excluded from clauses (c)(i) and
(c)(ii) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase, retirement or other
acquisition of subordinated Indebtedness in exchange for, or in an amount
not in excess of the net cash proceeds from, an incurrence of Permitted
Refinancing Indebtedness;
(iv) so long as no Default or Event of Default shall have occurred
and is continuing, the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company, Holding or any
Restricted Subsidiary of the Company (including Restricted Payments to any
shareholder of the Company in order to permit such shareholder (directly or
indirectly) to repurchase, redeem or otherwise acquire
32
Equity Interests in Holding), held by any member of the Company's (or any
of its subsidiaries') management, employees, directors or consultants
pursuant to any management, employee, director or consultant equity
subscription agreement or stock option agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests since the 1998 Notes Issue Date shall not exceed
the sum of (A) $3.0 million and (B) the aggregate cash proceeds received by
the Company from any issuance of Equity Interests since the 1998 Notes
Issue Date by Holding or the Company to members of management, employees,
directors or consultants of the Company and its subsidiaries (provided that
the cash proceeds referred to in this clause (B) shall be excluded from
clause (c)(ii) of the preceding paragraph); provided, further, that
Management Notes may be forgiven or returned without regard to the
limitation set forth above and the forgiveness or return thereof shall not
be treated as Restricted Payments for purposes of determining compliance
with such limitation;
(v) the payment of any dividend (or the making of a similar
distribution or redemption) by a Restricted Subsidiary of the Company to
the holders of its common Equity Interests on a pro rata basis;
(vi) (A) payments required to be made under the Tax Sharing
Agreement or (B) distributions made by the Company on the date of the 1998
Notes Indenture, the proceeds of which were utilized solely to consummate
the Recapitalization;
(vii) the payment of dividends or the making of loans or advances by
the Company to Holding in an aggregate amount not to exceed $1.75 million
in any fiscal year for costs and expenses incurred by Holding in its
capacity as a holding company or for services rendered by Holding on behalf
of the Company;
(viii) so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of the Company or any Restricted
Subsidiary issued after the date of the 1998 Notes Indenture in accordance
with the covenant contained in Section 4.09 hereof or in Section 4.09 of
the 1998 Notes Indenture (if issued prior to the Closing Date);
(ix) so long as (A) no Default or Event of Default has occurred and
is continuing and (B) immediately before and immediately after giving
effect thereto, the Company would have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in clause (i) of the first paragraph of Section 4.09
hereof, from and after the 1998 Notes Issue Date, payments of cash
dividends to Holding in an amount sufficient to enable Holding to make
payments of interest required to be made in respect of the Holding Senior
Discount Debentures in accordance with the terms thereof in effect on the
date of the 1998 Notes Indenture, provided such interest payments are made
with the proceeds of such dividends; and
(x) the purchase or redemption of subordinated indebtedness
pursuant to a change of control of provision contained in the indenture or
other governing instrument relating thereto; provided, however, that (A) no
offer or purchase obligation may be triggered in respect of such
Indebtedness unless a corresponding obligation also arises for the
Securities and (B) in all events, no repurchase or redemption of such
Indebtedness may be consummated unless and until the Company shall have
satisfied all repurchase obligations with respect to any required purchase
offer made with respect to the Securities.
33
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default or an
Event of Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the first paragraph of this covenant. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greater of (i) the net book value of such Investments at the time
of such designation and (ii) the fair market value of such Investments at the
time of such designation. Such designation will only be permitted if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon a fairness opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing if such fair market value exceeds $10.0 million. 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 is
permitted and setting forth the basis upon which the calculations required by
Section 4.07 were computed, together with a copy of any fairness opinion or
appraisal, if any, required by this Indenture.
SECTION 4.08. Dividend and Other Payment Restrictions Affecting
-------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
------------------------
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any Indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) the Senior
Credit Facility, (b)(1) the 1998 Notes Indenture and the 1998 Notes and (2) this
Indenture and the Securities, (c) applicable law or any applicable rule,
regulation or order, (d) any agreement or instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such agreement or instrument was created or entered into in connection with or
in contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, (e) by reason
of customary non-assignment provisions in leases, licenses, encumbrances,
contracts or similar assets entered into or acquired in the ordinary course of
business and consistent with industry practices, (f) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (e) above on the property so
acquired, (g) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced, (h) contracts for the sale of assets containing
customary restrictions with respect to a Restricted Subsidiary pursuant to an
agreement that has been entered
34
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Restricted Subsidiary and (i) customary restrictions in
security agreements or mortgages securing Indebtedness of the Company or a
Restricted Subsidiary to the extent such restrictions restrict the transfer of
the property subject to such security agreements and mortgages.
SECTION 4.09. Incurrence of Indebtedness and Issuance of Preferred
----------------------------------------------------
Stock. The Company shall not, and shall not permit any of its Restricted
------
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company will not issue any Disqualified Stock and will not
permit any of its Restricted Subsidiaries to issue any shares of preferred stock
or Disqualified Stock other than to the Company or another Restricted
Subsidiary; provided, however, that the Company or any of its Restricted
Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock if (i) the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.0 to 1.0 commencing on the 1998 Notes Issue Date and at any time
thereafter, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock had been issued or in the case of any
Restricted Subsidiary, such preferred stock had been issued, as the case may be,
at the beginning of such four-quarter period and (ii) no Default or Event of
Default will have occurred or be continuing or would occur as a consequence
thereof.
The provisions of the first paragraph of this covenant will not apply
to the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and the Restricted Subsidiaries
of Indebtedness under the Credit Facilities and any Guarantees thereof;
provided that the aggregate principal amount of all Indebtedness (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and the Restricted Subsidiaries
for reimbursement of drawings that may be made thereunder) outstanding
under all Credit Facilities after giving effect to such incurrence,
including all Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (i), does not exceed at any
time (A) with respect to the term loan portion of such Credit Facilities,
$125 million in an aggregate principal amount and (B) with respect to the
revolving credit facility and deferred term loan portion of such Credit
Facilities, an aggregate principal amount equal to the greater of fifty
percent of the amount of inventory shown on the consolidated balance sheet
of the Company for the then most recently ended fiscal quarter and $250
million less, in the case of clause (A) or (B), the aggregate principal of
all principal payments thereunder since the 1998 Notes Issue Date
constituting permanent reductions of such Indebtedness pursuant to such
Credit Facilities or in accordance with Section 4.10;
(ii) the incurrence by the Company and the Guarantors of
Indebtedness represented by (A) the 1998 Notes and the Guarantees of the
1998 Notes and (B) the Securities (not including any Additional Securities)
and the Subsidiary Guarantees;
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or other obligations, in each case incurred for the
purpose of financing all or any part of the
35
acquisition cost or cost of construction, remodeling or improvements of
assets or property used in the business of the Company or any Restricted
Subsidiary, in an aggregate principal amount not to exceed $25.0 million at
any time outstanding;
(iv) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the 1998 Notes Issue Date (excluding
Indebtedness described in clause (i) of this Section 4.09) and Indebtedness
incurred prior to the Closing Date and outstanding pursuant to the first
paragraph of Section 4.09 of the 1998 Notes Indenture;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture
or the 1998 Notes Indenture (if incurred prior to the Closing Date) to
exist or be incurred;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Wholly Owned Subsidiaries or between or among any Wholly Owned
Subsidiaries; provided, that (A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than a Wholly Owned Subsidiary and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Wholly Owned Subsidiary will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(vii) the incurrence by the Company or any Restricted Subsidiary of
Hedging Obligations that are incurred for the purpose of fixing or hedging
(i) interest rate risk with respect to any floating rate Indebtedness that
is permitted by the terms of this Indenture to be outstanding or (ii) the
value of foreign currencies purchased or received by the Company or any
Restricted Subsidiary in the ordinary course of business;
(viii) Indebtedness incurred in respect of workers' compensation
claims, self-insurance obligations, performance, surety and similar bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(ix) Indebtedness arising from guarantees of Indebtedness of the
Company or any Restricted Subsidiary or the agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Capital Stock of
a Restricted Subsidiary, or other guarantees of Indebtedness incurred by
any person acquiring all or any portion of such business, assets or Capital
Stock of a Restricted Subsidiary for the purpose of financing such
acquisition, provided that the maximum aggregate liability in respect of
all such Indebtedness shall at no time exceed 25% of the gross proceeds
(with proceeds other than cash or Cash Equivalents being valued at the fair
market value thereof as determined by the Board of Directors of the Company
in good faith) actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;
(x) the guarantee by the Company or any of the Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary that
was permitted to be incurred by another provision of this covenant;
36
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt in an aggregate principal amount at any time
outstanding not to exceed $10.0 million;
(xii) Indebtedness incurred in connection with a Qualified
Receivables Transaction except to the extent that such Indebtedness is
recourse to the Company or any other Restricted Subsidiary of the Company;
and
(xiii) the incurrence by the Company or any Restricted Subsidiary of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred pursuant
to this clause (xiii) or Section 4.09(xiii) of the 1998 Notes Indenture (if
incurred prior to the Closing Date), not to exceed $25.0 million.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
SECTION 4.10. Asset Sales. The Company shall not, and shall not
------------
permit any of its Restricted Subsidiaries to, engage in or consummate an Asset
Sale unless (i) the Company (or the 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 by the
Board of Directors in good faith, whose determination shall be conclusive
evidence thereof and shall be evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) and
(ii) at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or Cash Equivalents other than in
the case where the Company or such Restricted Subsidiary is undertaking a
Permitted Asset Swap; provided that the amount of (x) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet), of
the Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Securities or any
Guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any securities, notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are converted within 15 days by the Company or such Restricted
Subsidiary into cash (to extent of the cash received) shall be deemed to be cash
for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or its Restricted Subsidiaries may apply such Net Proceeds, at
its option, (a) to permanently reduce Senior Debt, or (b) to the investment in,
or the making of a capital expenditure or the acquisition of, other property or
assets in each case used or useable in a Permitted Business, or Capital Stock of
any Person primarily engaged in a Permitted Business if, as a result of the
investment in or acquisition by the Company or any Restricted Subsidiary
thereof, such Person becomes a Restricted Subsidiary, or (c) a combination of
the uses described in clauses (a) and (b). Pending the final application of any
such Net Proceeds, the Company or
37
its Restricted Subsidiaries may temporarily reduce Senior Debt or otherwise
invest such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales (including any Net Proceeds from Asset Sales
that were not applied or invested in accordance with the second paragraph of
Section 4.10 of the 1998 Notes Indenture prior to the Closing Date or used to
make an Asset Sale Offer), that are not applied or invested as provided in the
first sentence of this paragraph within the 360-day period after receipt of such
Net Proceeds will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $10.0 million (an "Asset Sale Offering
Triggering Event"), the Company will be required to make an offer to all Holders
of Securities and, to the extent required by the terms of any Pari Passu
Indebtedness to all holders of such Pari Passu Indebtedness (an "Asset Sale
Offer") to purchase the maximum principal amount of Securities and any such Pari
Passu Indebtedness that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase, in accordance with the procedures set forth in Section 3.09 hereof
or such Pari Passu Indebtedness, as applicable. To the extent that the aggregate
principal amount of Securities and any such Pari Passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company or
its Restricted Subsidiaries may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Securities and any such
Pari Passu Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Securities to be purchased on a
pro rata basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.11. Transactions with Affiliates. The Company shall not,
-----------------------------
and shall not permit any of its Restricted Subsidiaries to, make any payment to
or Investment in, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) the terms of such Affiliate
Transaction are fair and reasonable to the Company or such Restricted
Subsidiary, as the case may be, and are at least as favorable as the terms which
could be obtained by the Company or such Restricted Subsidiary, as the case may
be, in a comparable transaction made on an arm's length basis between
unaffiliated parties and (ii) the Company delivers to the Trustee (a) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $2.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors and (b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing; provided that the following shall
not be deemed Affiliate Transactions: (v) certain leases and other arrangements
of the Company in effect on the 1998 Notes Issue Date and specified in Schedule
4.11 to the 1998 Notes Indenture, (w) any employment agreements, stock option or
other compensation agreements or plans (and the payment of amounts or the
issuance of securities thereunder) and other reasonable fees, compensation,
benefits and indemnities paid or entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business of the Company or
such Restricted Subsidiary to or with the officers, directors or employees of
the Company or its Restricted Subsidiaries, (x) transactions between or among
the Company and/or its Restricted Subsidiaries, (y) Restricted Payments (other
than Restricted Investments) that are permitted by
38
the provisions of this Indenture described in Section 4.07 and (z) sales of
Capital Stock (other than Disqualified Stock) of the Company, when such sales
are exclusively for cash.
SECTION 4.12. Liens. The Company shall not, and shall not permit any
------
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom for purposes of securing Indebtedness, except Permitted Liens, unless
the Obligations due hereunder and the Securities are secured by a Lien on such
property, assets or proceeds on an equal and ratable basis (or on a senior
basis, in the case of Indebtedness subordinate in right of payment to the
Securities), with the Obligations so secured, so long as such Obligations are
secured.
SECTION 4.13. Offer to Purchase Upon Change of Control. Upon the
-----------------------------------------
occurrence of a Change of Control, each Holder of Securities will have the right
to require the Company to repurchase all or any part (equal to $1,000 principal
amount or an integral multiple thereof) of such Holder's Securities pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail, or cause to be mailed, a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Securities on the date specified in such notice,
which date shall be no earlier than 30 days (or such shorter time period as may
be permitted under applicable law, rules and regulations) and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date"),
pursuant to the procedures required by Section 3.09 hereof and described in such
notice. The Company 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 the Securities as a result of a Change of Control. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions hereof relating to such Change of Control Offer, the Company will
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described hereof by virtue thereof. On
the Change of Control Payment Date, the Company shall, to the extent lawful, (1)
accept for payment all Securities or portions thereof properly tendered pursuant
to the Change of Control Offer, (2) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Securities or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating the
aggregate principal amount of Securities or portions thereof being purchased by
the Company. The Paying Agent will promptly mail to each Holder of Securities
so tendered the Change of Control Payment for such Securities, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Security equal in principal amount to any unpurchased
portion of the Securities surrendered, if any; provided that each such new
Security will be in a principal amount of $1,000 or an integral multiple
thereof. Prior to complying with the provisions hereof, but in any event within
90 days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of
Securities required by this Section 4.13. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are applicable. The
Company will not be required to
39
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth herein applicable to a Change of
Control Offer made by the Company and purchases all Securities validly tendered
and not withdrawn under such Change of Control Offer.
SECTION 4.14. Corporate Existence. Subject to Section 4.13 and
--------------------
Article 5 hereof, as the case may be, the Company and each Guarantor shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Subsidiaries in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary and the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Securities.
SECTION 4.15. Business Activities. The Company shall not, and shall
--------------------
not permit any Restricted Subsidiary to, directly or indirectly, engage to a
substantial extent in any business other than a Permitted Business.
SECTION 4.16. Senior Subordinated Debt. Notwithstanding the
-------------------------
provisions of Section 4.09 hereof, (i) the Company shall not incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Debt and senior in any
respect in right of payment to the Securities, and (ii) no Guarantor shall
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to Senior Debt of
such Guarantor and senior in any respect in right of payment to such Guarantor's
Subsidiary Guarantee. For purposes of this covenant, Indebtedness is deemed to
be senior in right of payment to the Securities or the Guarantees, as the case
may be, if it is not explicitly subordinated in right of payment to Senior Debt
at least to the same extent as the Securities and the Guarantees, as the case
may be, are subordinated to such Senior Debt.
SECTION 4.17. Limitation on Issuances of Guarantees of Indebtedness.
------------------------------------------------------
The Company shall not permit any Restricted Subsidiary to guarantee the payment
of any Indebtedness of the Company or any Indebtedness of any other Restricted
Subsidiary (in each case, the "Guaranteed Debt"), unless (i) if such Restricted
Subsidiary is not a Guarantor, such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture providing for a
Subsidiary Guarantee of payment of the Securities by such Restricted Subsidiary,
(ii) if the Securities or the Subsidiary Guarantee (if any) of such Restricted
Subsidiary are subordinated in right of payment to the Guaranteed Debt, the
Subsidiary Guarantee under the supplemental indenture shall be subordinated to
such Restricted Subsidiary's guarantee with respect to the Guaranteed Debt
substantially to the same extent as the Securities or the Subsidiary Guarantee
are subordinated to the Guaranteed Debt under this Indenture, (iii) if the
Guaranteed Debt is by its express terms subordinated in right of payment to the
Securities or the Subsidiary Guarantee (if any) of such Restricted Subsidiary,
any such guarantee of such Restricted Subsidiary with respect to the Guaranteed
Debt shall be subordinated in right of payment to such Restricted Subsidiary's
Subsidiary Guarantee with respect to the Securities substantially to the same
extent as the Guaranteed Debt is subordinated to the Securities or the
Subsidiary Guarantee (if any) of such Restricted Subsidiary, (iv) such
40
Restricted Subsidiary subordinates rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted Subsidiary under its
Subsidiary Guarantee to its obligation under its Subsidiary Guarantee, and (v)
such Restricted Subsidiary shall deliver to the Trustee an opinion of counsel to
the effect that (A) such Subsidiary Guarantee of the Securities has been duly
authorized, executed and delivered, and (B) such Subsidiary Guarantee of the
Securities constitutes a valid, binding and enforceable obligation of such
Restricted Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation, all laws
relating to fraudulent transfers) and except insofar as enforcement thereof is
subject to general principles of equity.
SECTION 4.18. Limitation on the Sale or Issuance of Capital Stock of
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Restricted Subsidiaries. The Company will not, and will not permit any of its
------------------------
Restricted Subsidiaries to, directly or indirectly, transfer, convey, lease,
sell or otherwise dispose of any shares (other than directors' qualifying
shares) of Capital Stock of a Restricted Subsidiary to any Person, except (i) to
the Company or a Wholly Owned Subsidiary or (ii) in a transfer, conveyance,
lease, sale or other disposition of all the Capital Stock of such Restricted
Subsidiary owned by the Company or another Restricted Subsidiary; provided, that
in connection with any such transfer, conveyance, lease, sale or other
disposition of Capital Stock the Company or any such Restricted Subsidiary
complies with Section 4.10; provided, further that the foregoing shall not
restrict (a) any Lien on Capital Stock of a Restricted Subsidiary that is not
otherwise prohibited under the Indenture or (b) any transfer, sale or other
disposition of Capital Stock pursuant to a foreclosure of any such Lien or
similar exercise of remedies in respect thereof.
SECTION 4.19. Limitation on Ability of Company to Release Funds From
------------------------------------------------------
Escrow. The Company agrees that (i) the terms of the Escrow Agreement shall
-------
exclusively control the conditions under which and procedures pursuant to which
Escrow Property (as defined in the Escrow Agreement) can be released and (ii) it
will not attempt to have any Escrow Property (as defined in the Escrow
Agreement) released from escrow except in accordance with the Escrow Agreement.
ARTICLE 5
Successors
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SECTION 5.01. Merger, Consolidation or Sale of Assets. The Company
----------------------------------------
shall not consolidate or merge with or into (whether or not the Company is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions, to another Person unless (i) the Company is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation or
limited liability company organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the Person formed by
or surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Securities and this Indenture pursuant to a supplemental indenture in
a form reasonably satisfactory to the Trustee; (iii) immediately prior to and
immediately after such transaction no Default or Event of Default exists; (iv)
except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, the Company or the entity or
41
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof; and (v) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture.
For purposes of this Section 5.01, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. Clause (iv) of
the foregoing paragraph will not prohibit (a) a merger between the Company and a
Wholly Owned Subsidiary of Holding created for the purpose of holding the
Capital Stock of the Company, (b) a merger between the Company and a Wholly
Owned Subsidiary of the Company or (c) a merger between the Company and an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another State of the United States so long as, in the case of each of clause
(a), (b) and (c), the amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby.
SECTION 5.02. Successor Corporation Substituted. Upon any
----------------------------------
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and shall exercise every
right and power of the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein and thereafter the
predecessor company shall be discharged from all obligations and covenants under
this Indenture and the Securities; provided, that, (i) solely for the purposes
of computing Consolidated Net Income for purposes of clause (b) of the first
paragraph of Section 4.07 hereof, the Consolidated Net Income of any person
other than the Company and its Subsidiaries shall be included only for periods
subsequent to the effective time of such merger, consolidation, combination or
transfer of assets; and (ii) in the case of any sale, assignment, transfer,
lease, conveyance, or other disposition of less than all of the assets of the
predecessor company that does not meet the requirements of Section 5.01, the
predecessor company shall not be released or discharged from the obligation to
pay the principal of or interest and Liquidated Damages, if any, on the
Securities.
42
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. Each of the following constitutes
------------------
an "Event of Default":
(i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Securities (whether or not
prohibited by Article 10 hereof);
(ii) default in payment when due of the principal of or premium, if
any, on the Securities (whether or not prohibited by Article 10 hereof);
(iii) failure by the Company or any of its Restricted Subsidiaries
for 30 days after notice by the Trustee or by the Holders of at least 25%
in aggregate principal amount of Securities then outstanding to comply with
the provisions described under Sections 4.07, 4.09, 4.10, 4.13 or 4.19;
(iv) failure by the Company or any of its Restricted Subsidiaries for
60 days after notice by the Trustee or by the Holders of at least 25% in
aggregate principal amount of Securities then outstanding to comply with
any of its other agreements in this Indenture or the Securities;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date hereof, which default (a) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness at final maturity (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $20.0 million or more in the case of clause (a) or (b);
(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $20.0 million (net of any
amounts with respect to which a reputable and credit worthy insurance
company has acknowledged liability in writing), which judgments are not
paid, discharged or stayed for a period of 60 days;
(vii) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole would constitute a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
43
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due; or
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(b) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
(ix) the Subsidiary Guarantee of a Significant Subsidiary shall be
held in any judicial proceeding to be unenforceable or invalid or, except
as permitted by this Indenture, shall cease for any reason to be in full
force and effect or any Guarantor that is a Significant Subsidiary, or any
Person acting on behalf of any Guarantor that is a Significant Subsidiary,
shall deny or disaffirm its obligations under its Subsidiary Guarantee;
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
SECTION 6.02. Acceleration. If any Event of Default occurs and is
-------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities may declare all the Securities to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default as described in clause (vii) or (viii) of Section 6.01 hereof
with respect to the Company, all outstanding Securities will become due and
payable without further action or notice. Upon any acceleration of maturity of
the Securities, all principal of and accrued interest and Liquidated Damages, if
any, on the Securities shall be due and payable immediately. Holders of the
Securities may not enforce this Indenture or the Securities except as provided
in this Indenture. In the event of a declaration of acceleration of the
Securities because an Event of Default has occurred and is continuing as a
result of the acceleration of any Indebtedness described in clause (v) of
Section 6.01 hereof, the declaration of acceleration of the Securities shall be
automatically annulled if the holders of any Indebtedness described in clause
(v) of Section 6.01 hereof have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration and
if (y) the annulment of the acceleration of the Securities would not conflict
with any judgment or decree of
44
a court of competent jurisdiction and (z) all existing Events of Default, except
nonpayment of principal or interest on the Securities that became due solely
because of the acceleration of the Securities, have been cured or waived.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
---------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, interest and Liquidated Damages, if any, on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Security in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with this Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
SECTION 6.04. Waiver of Defaults. The Holders of a majority in
-------------------
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Securities waive any existing
Default or Event of Default and its consequences under this Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Securities, which shall require the consent of all of the
Holders of the Securities then outstanding.
SECTION 6.05. Control by Majority. The Holders of a majority in
--------------------
aggregate principal amount of the then outstanding Securities may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust power conferred on it.
However, (i) the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders of Securities or that may involve the Trustee in
personal liability, and (ii) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction. In case an Event
of Default shall occur (which shall not be cured), the Trustee will be required,
in the exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Notwithstanding any provision to the contrary in
this Indenture, the Trustee is under no obligation to exercise any of its rights
or powers under this Indenture at the request of any Holder of Securities,
unless such Holder shall offer to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
SECTION 6.06. Limitation on Suits. A Holder of a Security may pursue
--------------------
a remedy with respect to this Indenture, the Subsidiary Guarantees or the
Securities only if:
(a) the Holder of a Security gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such notice from the
Company;
(b) the Holders of at least 25% in aggregate principal amount of the
then outstanding Securities make a written request to the Trustee to pursue
the remedy;
45
(c) such Holder of a Security or Holders of Securities offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Securities do not give the Trustee
a direction inconsistent with the request.
A Holder of a Security may not use this Indenture to prejudice the
rights of another Holder of a Security or to obtain a preference or priority
over another Holder of a Security.
SECTION 6.07. Rights of Holders of Securities to Receive Payment.
---------------------------------------------------
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal, premium, if any, interest, and
Liquidated Damages, if any, on such Security, on or after the respective due
dates expressed in such Security (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
---------------------------
specified in Section 6.01(i) or (ii) hereof occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company (or any other obligor on the Securities) for
the whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Securities and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee is
---------------------------------
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Securities allowed
in any judicial proceedings relative to the Company (or any other obligor upon
the Securities), its creditors or its property and shall be entitled and
empowered to participate as a member, voting or otherwise, of any official
committee of creditors appointed in such matter and to collect, receive and
distribute any money or other securities or property payable or deliverable upon
the conversion or exchange of the Securities or on any such claims and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing
46
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 Securities
or the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. Subject to Articles 10 and 12, if the
-----------
Trustee collects any money pursuant to this Article 6, it shall pay out the
money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all reasonable compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to the extent provided in Articles 10 and 12, to the holders
of Senior Debt in accordance with such Articles;
Third: to Holders of Securities for amounts due and unpaid on the
Securities for principal, premium, if any, interest, and Liquidated Damages, if
any, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, premium, if any,
interest, and Liquidated Damages, if any, respectively;
Fourth: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Securities; and Fifth: to the
Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Securities pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
----------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, the Company, a suit by a Holder of a Security pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in aggregate principal amount of
the then outstanding Securities.
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
------------------
occurred and is continuing of which a Responsible Officer of the Trustee has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Indenture and use the same degree of care and skill in its exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
47
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the Trustee need
perform only those duties that are specifically set forth in this Indenture
or the TIA and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c), (e) and (f) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively
------------------
rely on the truth of the statements and correctness of the opinions contained
in, and shall be protected from acting or refraining from acting upon, any
document reasonably believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the Trustee's own
choosing and the written advice of such counsel or any Opinion of Counsel
48
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it reasonably believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or Guarantor, as applicable.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(g) Except with respect to Section 4.01 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01(a) (except that the Trustee shall not be
deemed to have knowledge of a default in the payment of Liquidated Damages) or
6.01(b), or (ii) any Default or Event of Default of which a Responsible Office
of the Trustee shall have received written notification or obtained actual
knowledge.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
-----------------------------
individual or any other capacity may become the owner of Securities and may
other wise deal with the Company, the Guarantors or any Affiliate of the Company
or any Guarantor with the same rights it would have if it were not Trustee. 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. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
---------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Subsidiary Guarantees or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default or an Event of
-------------------
Default occurs and is continuing and if it is known to a Responsible Officer of
the Trustee, the Trustee shall
49
mail to Holders of Securities a notice of the Default or Event of Default within
90 days after it occurs, unless such Default or Event of Default has been cured
or waived. Except in the case of a Default or Event of Default in payment on any
Security pursuant to Section 6.01(i) or (ii) hereof, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Securities.
SECTION 7.06. Reports by Trustee to Holders of the Securities.
------------------------------------------------
Within 60 days after each May 15 beginning with the May 15 following the date of
this Indenture, and for so long as Securities remain outstanding, the Trustee
shall mail to the Holders of the Securities a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Company has informed the Trustee in writing the
Securities are listed in accordance with TIA Section 313(d). The Company shall
promptly notify the Trustee when the Securities are listed on any stock exchange
and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company and the
---------------------------
Guarantors shall pay to the Trustee from time to time reasonable compensation
for its acceptance of this Indenture and services hereunder. To the extent
permitted by law, the Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and the Guarantors
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company and the Guarantors need not reimburse any expense incurred by the
Trustee or any of its agents or counsel through the wilful misconduct,
negligence or bad faith of the Trustee or any such agent or counsel. The
Company and the Guarantors shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
and the Guarantors (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company and the Guarantors or any Holder or
any other person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder except to the extent any such loss,
liability or expense may be attributable to its negligence, wilful misconduct or
bad faith. The Trustee shall notify the Company and the Guarantors promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company and the Guarantors shall not relieve the Company of its obligations
hereunder, except to the extent such failure shall have materially prejudiced
the Company or any Guarantor. The Company and the Guarantors shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company and the Guarantors shall pay the reasonable
fees and expenses of such counsel. The Company and the Guarantors need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld, delayed or conditioned.
The obligations of the Company and the Guarantors under this Section
7.07 shall survive the resignation and removal of the Trustee and the
satisfaction and discharge of this Indenture.
50
To secure the Company's and the Guarantors payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Securities on all money
or property held or collected by the Trustee, except that held in trust to pay
principal, interest and Liquidated Damages, if any, on particular Securities.
Such Lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vii) or (viii) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of
-----------------------
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in aggregate principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Securities
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Security who
has been a Holder of a Security for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Security may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Securities. The retiring Trustee
51
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided that all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee or
---------------------------------
any Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee or
any Agent, as applicable.
SECTION 7.10. Eligibility; Disqualification. There shall at all
------------------------------
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof, is
authorized under such laws to exercise corporate trustee power, and is subject
to supervision or examination by federal or state authorities. The Trustee and
its direct parent shall at all times have a combined capital surplus of at least
$50.0 million as set forth in its most recent annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b)); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against the Company.
------------------------------------------------------
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
Legal Defeasance and Covenant Defeasance
----------------------------------------
SECTION 8.01. Option to Effect Legal Defeasance or Covenant
---------------------------------------------
Defeasance. The Company may, at the option of its Board of Directors evidenced
-----------
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or Section 8.03 hereof be applied to all Securities and
Subsidiary Guarantees then outstanding upon compliance with the conditions set
forth below in this Article 8.
SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's
-------------------------------
exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Company and each Guarantor shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been discharged
from their respective obligations with respect to all Securities and Subsidiary
Guarantees then outstanding on the date the conditions set forth below are
satisfied ("Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the Securities outstanding, which shall thereafter be deemed to
be "outstanding" only for the purposes of
52
Section 8.05 and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all of the Company's and Guarantors' respective
other obligations under such Securities and Subsidiary Guarantees and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall, subject to Section 8.07, execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Securities to receive payments in respect of the principal of premium, if any,
and interest and Liquidated Damages on such Securities when such payments are
due from the trust referred to in Section 8.04(a); (b) the Company's obligations
with respect to such Securities under Sections 2.04, 2.05, 2.06, 2.07, 2.08,
2.10, 4.02 and 4.03 hereof; (c) the rights, powers, trusts, duties and
immunities of the Trustee and the Company's obligations in connection therewith;
and (d) the provisions of this Section 8.02.
SECTION 8.03. Covenant Defeasance. Upon the Company's exercise under
--------------------
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each Guarantor shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from its obligations under the
covenants contained in Article 5 and in Sections 4.03, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 5.01 and 11.01 hereof with respect to
the outstanding Securities and Subsidiary Guarantees on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Securities and Subsidiary Guarantees shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Securities and Subsidiary
Guarantees, the Company or any of its Subsidiaries may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Securities and Subsidiary Guarantees shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(iii), 6.01(iv) (with
respect to the covenants specified in the first sentence hereof) and 6.01(v)
hereof shall not constitute Events of Default.
SECTION 8.04. Conditions to Legal or Covenant Defeasance. The
-------------------------------------------
following shall be the conditions to the application of either Section 8.02 or
Section 8.03 hereof to the outstanding Securities and Subsidiary Guarantees: In
order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Securities, cash in U.S. dollars,
non-callable Government Securities, 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 or premium, if
any, and interest and Liquidated Damages on the outstanding Securities on
the stated maturity or on the applicable redemption date, as the case may
be, and the Company must specify whether the Securities are being defeased
to maturity or to a particular redemption date;
53
(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 (A) the Company has
received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel shall confirm that, subject to
customary assumptions and exclusions, the Holders of the outstanding
Securities shall not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(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, subject to customary
assumptions and exclusions, the Holders of the outstanding Securities shall
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and shall be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the financing of amounts to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that, subject to customary assumptions and exclusions
(which assumptions and exclusions shall not relate to the operation of
Section 547 of the United States Bankruptcy Code or any analogous New York
State law provision), after the 91st day following the deposit, the trust
funds shall not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Securities over the other creditors of
the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. Deposited Money and U.S. Government Securities To Be
----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof,
----------------------------------------------
all money and non-callable Government Securities (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04
hereof in respect of the then outstanding Securities shall be held in trust and
54
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company or any Subsidiary acting as Paying Agent) as the Trustee
may determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal of, premium, if any, and interest and
Liquidated Damages, if any, on such Securities but such money need not be
segregated from other funds except to the extent required by law. The Company
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Securities. Anything in this
Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to
the Company from time to time at the Company's written request and be relieved
of all liability with respect to any money or non- callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. Repayment to the Company. Any money deposited with the
-------------------------
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, interest and Liquidated Damages,
if any, on any Security and remaining unclaimed for one year after such
principal, and premium, if any, or interest, if any, or Liquidated Damages, if
any, have become due and payable shall be paid to the Company on its written
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is
--------------
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.02 hereof or Section 8.03 hereof, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations of the Company and the Guarantors under this Indenture, and the
Securities and the Subsidiary Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 hereof or Section 8.03
hereof, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 hereof or
Section 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, interest or Liquidated
Damages, if any, on any Security following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
55
Amendment, Supplement and Waiver
--------------------------------
SECTION 9.01. Without Consent of Holders of the Securities.
---------------------------------------------
Notwithstanding Section 9.02 of this Indenture, without the consent of any
Holder of Securities, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture, the Securities or the Subsidiary Guarantees:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Securities in the case of a merger or
consolidation pursuant to Article 5 or Article 11 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Securities or that does not materially
adversely affect the legal rights hereunder of any Holder of the
Securities;
(e) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA;
(f) to allow any Subsidiary to Guarantee the Securities; or
(g) to provide for the issuance, subject to the conditions and in
compliance with the covenants related thereto set forth herein, of
Additional Securities, which shall have terms substantially identical in
all material respects to the Original Securities (except that the transfer
restrictions contained in the Original Securities shall be modified or
eliminated as appropriate), and which may be treated together with any
outstanding Original Securities, as a single issue of Securities.
Upon the written request of the Company accompanied by a resolution of
its Board of Directors of the Company authorizing the execution of any such
amended or supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company or the Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. With Consent of Holders of Securities. Except as
--------------------------------------
provided below in this Section 9.02 or as provided in Section 10.13 or Section
12.13 of this Indenture, this Indenture, the Securities and the Subsidiary
Guarantees may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or a tender offer or exchange offer for, Securities), and subject
to Sections 6.04 and 6.07 hereof, any existing default or compliance with any
provision of this Indenture, the Securities or the Subsidiary Guarantees may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Securities (including, without limitation,
56
consents obtained in connection with a purchase of, or a tender offer or
exchange offer for, the Securities).
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 reasonably
satisfactory to the Trustee of the consent of the Holders of Securities as
aforesaid, and upon receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel, the Trustee shall join with the Company and the Guarantors
in the execution of such amended or supplemental indenture unless such amended
or supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may, but shall not
be obligated to, enter into such amended or supplemental indenture. It shall not
be necessary for the consent of the Holders of Securities under this Section
9.02 to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof. After an
amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company shall mail to the Holders of each Security affected thereby a notice
briefly 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, 6.07, 10.13 and 12.13 hereof, the Holders of
a majority in aggregate principal amount of the Securities then outstanding may
amend or waive compliance in a particular instance by the Company or the
Guarantors with any provision of this Indenture or the Securities or the
Subsidiary Guarantees. However, without the consent of each Holder affected, an
amendment, or waiver may not (with respect to any Security held by a non-
consenting Holder):
(a) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Securities or alter the provisions with respect to the redemption of the
Securities (other than provisions relating to Sections 3.09, 4.10 and 4.13
hereof);
(c) reduce the rate of or change the time for payment of interest on
any Security;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities and a waiver of the payment
default that resulted from such acceleration);
(e) make any Security payable in money other than that stated in the
Securities;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption or repurchase payment with respect to any
Security (other than a payment required by Section 4.10 or 4.13 hereof);
(h) except as otherwise permitted herein, release any Guarantor from
any of its obligations under its Subsidiary Guarantee or this Indenture, or
amend the provisions herein relating to the release of Guarantors; or
57
(i) make any change in the amendment and waiver provisions of this
Article 9.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
------------------------------------
or supplement to this Indenture, the Subsidiary Guarantees or the Securities
shall be set forth in an amended or supplemental indenture that complies with
the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment,
----------------------------------
supplement or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder of a Security may revoke the
consent as to its Security if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. When an
amendment, supplement or waiver becomes effective in accordance with its terms,
it thereafter binds every Holder. The Company may, but shall not be obligated
to, fix a record date for the purpose of determining the Holders entitled to
give their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05. Notation on or Exchange of Securities. The Trustee may
--------------------------------------
place an appropriate notation about an amendment, supplement or waiver on any
Security thereafter authenticated. The Company in exchange for all Securities
may issue and the Trustee shall authenticate new Securities that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee to Sign Amendments, Etc. The Trustee shall
--------------------------------
sign any amended or supplemental indenture authorized pursuant to this Article 9
if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company and the Guarantors may not
sign an amendment or supplemental indenture until their respective Boards of
Directors approve it. In signing or refusing to sign any amended or supplemental
indenture the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company
and the Guarantors and enforceable in accordance with its terms.
ARTICLE 10
Subordination
-------------
SECTION 10.01. Agreement to Subordinate. The Company agrees, and
-------------------------
each Holder of Securities by accepting a Security agrees, that the Indebtedness
evidenced by the Security is subordinated in right of payment, to the extent and
in the manner provided in this Article, to the prior payment in full of all
Obligations in respect of Senior Debt (whether
58
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
SECTION 10.02. Liquidation; Dissolution; Bankruptcy. Upon any
-------------------------------------
payment or distribution of any kind to creditors of the Company, whether in
cash, property or securities, in a total or partial liquidation or dissolution
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property, an assignment for
the benefit of creditors or any marshalling of the Company's assets and
liabilities, whether voluntary or involuntary, the holders of Senior Debt will
be entitled to receive payment in full of all Obligations in respect of such
Senior Debt (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt whether or not such interest is
an allowed claim enforceable against a debtor in a bankruptcy case under Title
11 of the United States Code) before the Holders of Securities will be entitled
to receive any payment or distribution of any kind with respect to the
Securities, and until all Obligations with respect to Senior Debt are paid in
full, any payment or distribution to which the Holders of Securities would be
entitled shall be made to the holders of Senior Debt (except that Holders of
Securities may receive and retain Permitted Junior Securities made pursuant to a
reorganization in which the Senior Debt is not impaired and payments made from
the trust described under Section 8.02 and 8.03).
SECTION 10.03. Default on Designated Senior Debt. The Company shall
----------------------------------
not make any payment upon or in respect of the Securities (except in Permitted
Junior Securities made pursuant to a reorganization in which the Senior Debt is
not impaired or from the trust described under Section 8.02, 8.03 and 8.04(a))
if (i) any amount of principal, interest or other Obligation in respect of any
Designated Senior Debt (including, without limitation, any amount due as a
result of the acceleration of the maturity thereof) is not paid when due and
remains unpaid (a "Payment Default") or (ii) any other default (a "Nonpayment
Default") occurs and is continuing with respect to any Designated Senior Debt
that permits holders of such Designated Senior Debt or any agent or trustee
thereof to accelerate its maturity and, in the case of any such Nonpayment
Default, the Trustee receives a notice of such default invoking the following
provisions of this Section 10.03 (a "Payment Blockage Notice") from the holders
of any Designated Senior Debt or any agent or trustee thereof. However, the
Company may pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
representative of the Designated Senior Debt affected by such Payment Default or
Nonpayment Default. Payments on the Securities may and shall be resumed (a) in
the case of a Payment Default, upon the date on which all Payment Defaults have
been cured or waived, unless a Payment Blockage Notice has been delivered
commencing a payment blockage period in respect of a Nonpayment Default, and (b)
in case of a Nonpayment Default, the earlier of (i) the date on which all
Payment Defaults and Nonpayment Defaults have been cured or waived or (ii) the
date 179 days after the date on which the applicable Payment Blockage Notice is
received, unless a Payment Default has occurred and is continuing. No new period
of payment blockage may be commenced in respect of a Nonpayment Default unless
and until 180 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice. No Nonpayment Default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days; provided
that if such Nonpayment Default arose from the failure to comply with a
financial covenant and if the condition or performance measured by such
financial covenant has declined further from such condition or performance as
reflected in the most recent financial statements available on the date of
delivery of the original Payment Blockage Notice to the
59
Trustee, such Nonpayment Default may be, or be made, the basis for a subsequent
Payment Blockage Notice.
Whenever the Company is prohibited from making any payment in respect
of the Securities, the Company also shall be prohibited from making, directly or
indirectly, any deposit in the trust described under Section 8.02, 8.03 and
8.04(a) and any payment of any kind on account of the redemption, purchase or
other acquisition of the Securities except for payments from a trust described
under Section 2.09, 3.05, 8.02, 8.03 or 8.04(a). If any Holder receives any
payment or distribution that such Holder is not entitled to receive with respect
to the Securities, such Holder shall be required to pay the same over to the
holders of Senior Debt.
SECTION 10.04. Acceleration of Securities. If payment of the
---------------------------
Securities is accelerated because of an Event of Default, the Company shall
promptly notify holders of Senior Debt of the acceleration. The Company shall
not make any payment in respect of the Securities until the earlier of five
Business Days after such notice is delivered or the date of acceleration of any
Designated Senior Debt and, thereafter, may pay the Securities only if this
Article 10 otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. In the event
------------------------------------
that the Trustee or any Holder of a Security receives any payment of any
Obligations with respect to the Securities at a time when such payment is
prohibited by Sections 10.02 or 10.03 hereof, such payment shall be held by the
Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued (the
"Representative"), as their respective interests may appear, for application to
the payment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the
Securities or the Company or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 10, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.
SECTION 10.06. Notice by the Company. The Company shall promptly
----------------------
notify the Trustee and the Paying Agent of any facts known to the Company that
would cause a payment of any Obligations with respect to the Securities to
violate this Article, which notice shall specifically refer to this Article 10,
but failure to give such notice shall not affect the subordination of the
Securities to the Senior Debt as provided in this Article.
SECTION 10.07. Subrogation. After all Senior Debt is paid in full
------------
and until the Securities are paid in full, Holders of the Securities shall be
subrogated (equally and ratably with all other pari passu indebtedness) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Holders of the
Securities have been applied to the payment of Senior Debt. A distribution made
under this Article to holders of Senior Debt that otherwise would have been made
to Holders of the
60
Securities is not, as between the Company and Holders of the Securities, a
payment by the Company on the Securities.
SECTION 10.08. Relative Rights. This Article defines the relative
----------------
rights of Holders of the Securities and holders of Senior Debt. Nothing in this
Indenture shall:
(1) impair, as between the Company and Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
(2) affect the relative rights of Holders of the Securities and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of the Securities from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of the Securities.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or an
Event of Default.
SECTION 10.09. Subordination May Not Be Impaired by the Company. No
-------------------------------------------------
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or any Holder or by any act or failure to act, in good
faith, by any such holder, or by the failure of the Company or any Holder to
comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt, or any of them, may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring any liabilities to any Holder of any Securities
and without impairing or releasing the subordination and other benefits provided
in this Indenture or the obligations of the Holders of the Securities to the
holders of the Senior Debt, even if any right of reimbursement or subrogation or
other right or remedy of any Holder of Securities is affected, impaired or
extinguished thereby, do any one or more of the following:
(1) change the manner, place or terms of payment or change or extend
the time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Senior Debt, any security thereof or guaranty thereof or any
liability of any obligor thereon (including any guarantor) to such holder,
or any liability incurred directly or indirectly in respect thereof or
otherwise amend, renew, exchange, extend, modify, increase or supplement in
any manner any Senior Debt or any instrument evidencing or guaranteeing or
securing the same or any agreement under which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any obligor
thereon, to such holder, or any liability incurred directly or indirectly
in respect thereof;
(3) settle or compromise any Senior Debt or any other liability of
any obligor of the Senior Debt to such holder or any security thereof or
any liability incurred directly or
61
indirectly in respect thereof and apply any sums by whomsoever paid and
however realized to any liability (including, without limitation, Senior
Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason
or for no reason, any lien or security interest securing Senior Debt by
whomsoever granted, exercise or delay in or refrain from exercising any
right or remedy against any obligor or any guarantor or any other person,
elect any remedy and otherwise deal freely with any obligor and any
security for the Senior Debt or any liability of any obligor to such holder
or any liability incurred directly or indirectly in respect thereof.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
SECTION 10.11. Rights of Trustee and Paying Agent. Notwithstanding
-----------------------------------
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment to or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the
Securities, unless and until the Trustee shall have received at its Corporate
Trust Office at least three Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Securities to violate this Article, which notice shall
specifically refer to this Article 10. Only the Company or a Representative may
give the notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 10.12. Authorization to Effect Subordination. Each Holder of
--------------------------------------
a Security by the Holder's acceptance thereof authorizes and directs the Trustee
on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all such purposes,
including without limitation the timely filing of a claim for the unpaid balance
of the Securities held by such Holder in the form required in any Insolvency or
Liquidation Proceeding and causing such claim to be approved. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time of such claim, the Representatives of the Designated
Senior Debt, including the Credit Agent, are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.
62
SECTION 10.13. Amendments. Any amendment to the provisions of this
-----------
Article 10 (which relate to subordination or the related definitions) shall
require the consent of the Holders of at least 75% in aggregate principal amount
of the Securities then outstanding if such amendment would adversely affect the
rights of the Holders of Securities.
ARTICLE 11
Guarantee of Securities
-----------------------
SECTION 11.01. Subsidiary Guarantee. Subject to Section 11.06 and
---------------------
Article 12 hereof, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Security 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
Securities and the Obligations of the Company hereunder and thereunder, that:
(a) the principal of, premium, if any, interest and Liquidated Damages, if any,
on the Securities will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal, premium, if any, (to the
extent permitted by law) interest on any interest, if any, and Liquidated
Damages, if any, on the Securities, and all other payment Obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full and performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Securities
or any of such other Obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed for whatever reason the Guarantors will be jointly and severally
obligated to pay the same immediately. An Event of Default under this Indenture
or the Securities shall constitute an event of default under the Subsidiary
Guarantees, and shall entitle the Holders to accelerate the Obligations of the
Guarantors hereunder in the same manner and to the same extent as the
Obligations of the Company. The Guarantors hereby agree that their Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Subsidiary Guarantee will not be
discharged (subject to Section 11.04) except by complete performance of the
Obligations contained in the Securities and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Securities Custodian, Trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount
paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to, and hereby waives, any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of
63
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor and the Company so long as the exercise of such right does not impair
the rights of the Holders under the Subsidiary Guarantees.
SECTION 11.02. Non-Impairement. Each Guarantor hereby agrees that
----------------
its Subsidiary Guarantee set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation of
such Subsidiary Guarantee.
SECTION 11.03. Guarantors May Consolidate, Etc., on Certain Terms.
---------------------------------------------------
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in this
Indenture shall prohibit a merger between a Guarantor and another Guarantor or a
merger between a Guarantor and the Company.
(b) Subject to Section 11.04 hereof, no Guarantor may consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another corporation, Person or entity whether or not affiliated with
such Guarantor unless, subject to the provisions of the following paragraph, (i)
the Person formed by or surviving any such consolidation or merger (if other
than such Guarantor) assumes all the obligations of such Guarantor pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under this Indenture and its Subsidiary Guarantees; and (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists.
(c) In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and substantially in the form of Exhibit C
hereto, of the Subsidiary Guarantee endorsed upon the Securities and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor and thereafter the predecessor Guarantor shall be fully
discharged from its Subsidiary Guarantee; provided that, solely for purposes of
computing Consolidated Net Income for purposes of clause (b) of the first
paragraph of Section 4.07 hereof, the Consolidated Net Income of any Person
other than the Company and its Restricted Subsidiaries shall only be included
for periods subsequent to the effective time of such merger, consolidation,
combination or transfer of assets. Such successor Person thereupon may cause to
be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All of the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
SECTION 11.04. Releases Following Sale of Assets, Merger, Sale of
--------------------------------------------------
Capital Stock, Etc. In the event (a) of a sale or other disposition of all of
-------------------
the assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any Guarantor, or (b)
that the Company designates a Guarantor to be an Unrestricted Subsidiary, or
such Guarantor ceases to be a Subsidiary of the Company, then such Guarantor (in
the event of a sale or other disposition, by way of such a merger, consolidation
or otherwise, of all of the Capital Stock of such Guarantor or any such
designation) or the entity acquiring the property (in the event of a sale or
other disposition of all of the assets of such Guarantor) shall be
64
released and relieved of any obligations under its Subsidiary Guarantee. In the
case of a sale, assignment, lease, transfer, conveyance or other disposition of
all or substantially all of the assets of a Guarantor, upon the assumption
provided for in clause (i) of the Section 11.03(b) hereof, such Guarantor shall
be discharged from all further liability and obligation under this Indenture.
Upon delivery by the Company to the Trustee of an Officers' Certificate to the
effect of the foregoing, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its Obligation
under its Subsidiary Guarantee. Any Guarantor not released from its Obligations
under its Subsidiary Guarantee shall remain liable for the full amount of
principal of, premium, if any, interest and Liquidated Damages, if any, on the
Securities and for the other Obligations of such Guarantor under this Indenture
as provided in this Article 11.
SECTION 11.05. Additional Guarantors. Any Person that was not a
----------------------
Guarantor on the date of this Indenture may become a Guarantor, and shall become
a Guarantor if so required by the terms of this Indenture, by executing and
delivering to the Trustee (a) a supplemental indenture in substantially the form
of Exhibit C, and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such Person and constitutes
the legal, valid, binding and enforceable obligation of such Person (subject to
such customary exceptions concerning creditors rights', fraudulent transfers,
public policy and equitable principles as may be acceptable to the Trustee in
its discretion).
SECTION 11.06. Limitation on Guarantor Liability. Notwithstanding
----------------------------------
any term or provision of this Indenture or any Security to the contrary, the
maximum aggregate amount of the obligations guaranteed hereunder by any
Guarantor shall not exceed the maximum amount that can be hereby guaranteed by
that Guarantor without rendering this Subsidiary Guarantee, as it relates to
such Guarantor, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer or similar laws affecting the rights of creditors
generally.
SECTION 11.07. "Trustee" to Include Paying Agent. In case at any
----------------------------------
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
11 shall in each case (unless the context shall otherwise require) be construed
as extending to and including such Paying Agent within its meaning as fully and
for all intents and purposes as if such Paying Agent were named in this Article
11 in place of the Trustee.
ARTICLE 12
Subordination of Subsidiary Guarantees
--------------------------------------
SECTION 12.01. Agreement to Subordinate. The Guarantors agree, and
-------------------------
each Holder of Securities by accepting a Security agrees, that the Indebtedness
evidenced by the Security is general unsecured obligations of the Guarantors, is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Debt of such Guarantor
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt of such Guarantor.
SECTION 12.02. Liquidation; Dissolution; Bankruptcy. Upon any
-------------------------------------
payment or distribution of any kind to creditors of any Guarantor, whether in
cash, property or securities, in a total or partial liquidation or dissolution
of such Guarantor or in a bankruptcy, reorganization,
65
insolvency, receivership or similar proceeding relating to any Guarantor or its
property, an assignment for the benefit of creditors or any marshalling of such
Guarantor's assets and liabilities, whether voluntary or involuntary, the
holders of Senior Debt of such Guarantor will be entitled to receive payment in
full of all Obligations in respect of such Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the applicable
Senior Debt whether or not such interest is an allowed claim enforceable against
a debtor in a bankruptcy case under Title 11 of the United States Code) before
the Holders of Securities will be entitled to receive any payment or
distribution of any kind with respect to the Securities, and until all
Obligations with respect to such Senior Debt are paid in full, any payment or
distribution to which the Holders of Securities would be entitled shall be made
to the holders of Senior Debt of such Guarantor (except that Holders of
Securities may receive and retain Permitted Junior Securities issued pursuant to
a reorganization in which the Senior Debt of such Guarantor is not impaired and
payments made from the trust described under Section 8.02 and 8.03).
SECTION 12.03. Default on Designated Senior Debt. No Guarantor shall
----------------------------------
make any payment upon or in respect of the Securities (except in Permitted
Junior Securities issued pursuant to a reorganization in which the Senior Debt
of such Guarantor is not impaired or from the trust described under Sections
2.09, 3.05, 8.02, 8.03 or 8.04(a)) if (i) any amount of principal, interest or
other Obligation in respect of any Designated Senior Debt (including, without
limitation, any amount due as a result of the acceleration of the maturity
thereof) is not paid when due and remains unpaid (a "Payment Default") or (ii)
any other default (a "Nonpayment Default") occurs and is continuing with respect
to any Designated Senior Debt that permits holders of such Designated Senior
Debt or any agent or trustee thereof to accelerate its maturity and, in the case
of any such Nonpayment Default, the Trustee receives a notice of such default
invoking the following provisions of this Section 12.03 (a "Payment Blockage
Notice") from the holders of any Designated Senior Debt or any agent or trustee
thereof. However, the Guarantors may pay the Securities without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the representative of the Designated Senior Debt affected by such
Payment Default or Nonpayment Default. Payments on the Securities may and shall
be resumed (a) in the case of a Payment Default, upon the date on which all
Payment Defaults have been cured or waived, unless a Payment Blockage Notice has
been delivered commencing a payment blockage period in respect of a Nonpayment
Default, and (b) in case of a Nonpayment Default, the earlier of (i) the date on
which all Payment Defaults and Nonpayment Defaults have been cured or waived or
(ii) the date 179 days after the date on which the applicable Payment Blockage
Notice is received, unless a Payment Default has occurred and is continuing. No
new period of payment blockage may be commenced in respect of a Nonpayment
Default unless and until 180 days have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice. No Nonpayment Default that existed or
was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been cured or waived for a period of not less
than 90 days; provided that if such Nonpayment Default arose from the failure to
comply with a financial covenant and if the condition or performance measured by
such financial covenant has declined further from such condition or performance
as reflected in the most recent financial statements available on the date of
delivery of the original Payment Blockage Notice to the Trustee, such Nonpayment
Default may be, or be made, the basis for a subsequent Payment Blockage Notice.
Whenever a Guarantor is prohibited from making any payment in respect
of the Securities, the Guarantor also shall be prohibited from making, directly
or indirectly, any deposit in the trust described under Section 8.02, 8.03 and
8.04(a) and any payment of any kind on account of the redemption, purchase or
other acquisition of the Securities except for payments
66
from the trust described under Section 2.09, 3.05, 8.02, 8.03 and 8.04(a). If
any Holder receives any payment or distribution that such Holder is not entitled
to receive with respect to the Securities, such Holder shall be required to pay
the same over to the holders of Senior Debt.
SECTION 12.04. Acceleration of Securities. If payment of the
---------------------------
Securities is accelerated because of an Event of Default, the Guarantors shall
promptly notify holders of Senior Debt of the acceleration. The Guarantors shall
not make any payment in respect of the Subsidiary Guarantees until the earlier
of five Business Days after such notice is delivered or the date of acceleration
of any Designated Senior Debt and, thereafter, may pay the Securities only if
this Article 12 otherwise permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. In the event
------------------------------------
that the Trustee or any Holder of a Security receives any payment of any
Obligations with respect to the Securities at a time when such payment is
prohibited by Sections 12.02 or 12.03 hereof, such payment shall be held by the
Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt. With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 12, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the
Securities or the Guarantors or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 12, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.
SECTION 12.06. Notice by Guarantor. The Guarantors shall promptly
--------------------
notify the Trustee and the Paying Agent of any facts known to the Guarantors
that would cause a payment of any Obligations with respect to the Securities to
violate this Article, which notice shall specifically refer to this Article 12,
but failure to give such notice shall not affect the subordination of the
Securities to the Senior Debt as provided in this Article.
SECTION 12.07. Subrogation. After all Senior Debt is paid in full
------------
and until the Securities are paid in full, Holders of the Securities shall be
subrogated (equally and ratably with all other pari passu indebtedness) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Holders of the
Securities have been applied to the payment of Senior Debt. A distribution made
under this Article to holders of Senior Debt that otherwise would have been made
to Holders of the Securities is not, as between the Guarantor and Holders of the
Securities, a payment by the Guarantors on the Securities.
SECTION 12.08. Relative Rights. This Article defines the relative
----------------
rights of Holders of the Securities and holders of Senior Debt. Nothing in this
Indenture shall:
(1) impair, as between the Guarantors and Holders of the Securities,
the obligations of the Guarantors, which are absolute and unconditional, to
pay principal of and interest on the Securities in accordance with their
terms;
67
(2) affect the relative rights of Holders of the Securities and
creditors of the Guarantors other than their rights in relation to holders
of Senior Debt; or
(3) prevent the Trustee or any Holder of the Securities from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of the Securities.
If the Guarantors fail because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or an
Event of Default.
SECTION 12.09. Subordination May Not Be Impaired by the Guarantors.
----------------------------------------------------
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by any Guarantor or any Holder or by any act or failure to act, in good
faith, by any such holder, or by the failure of any Guarantor or any Holder to
comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt, or any of them, may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring any liabilities to any Holder of any Securities
and without impairing or releasing the subordination and other benefits provided
in this Indenture or the obligations of the Holders of the Securities to the
holders of the Senior Debt, even if any right of reimbursement or subrogation or
other right or remedy of any Holder of Securities is affected, impaired or
extinguished thereby, do any one or more of the following:
(1) change the manner, place or terms of payment or change or extend
the time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Senior Debt, any security thereof or guaranty thereof or any
liability of any obligor thereon (including any guarantor) to such holder,
or any liability incurred directly or indirectly in respect thereof or
otherwise amend, renew, exchange, extend, modify, increase or supplement in
any manner any Senior Debt or any instrument evidencing or guaranteeing or
securing the same or any agreement under which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any obligor
thereon, to such holder, or any liability incurred directly or indirectly
in respect thereof;
(3) settle or compromise any Senior Debt or any other liability of
any obligor of the Senior Debt to such holder or any security thereof or
any liability incurred directly or indirectly in respect thereof and apply
any sums by whomsoever paid and however realized to any liability
(including, without limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason
or for no reason, any lien or security interest securing Senior Debt by
whomsoever granted, exercise or delay in or refrain from exercising any
right or remedy against any obligor or any guarantor or any other person,
elect any remedy and otherwise deal freely with any obligor and any
security for the Senior Debt or any liability of any obligor to such holder
or any liability incurred directly or indirectly in respect thereof.
68
SECTION 12.10. Distribution or Notice to Representative. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article 12, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12.
SECTION 12.11. Rights of Trustee and Paying Agent. Notwithstanding
-----------------------------------
the provisions of this Article 12 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment to or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the
Securities, unless and until the Trustee shall have received at its Corporate
Trust Office at least three Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Securities to violate this Article, which notice shall
specifically refer to this Article 12. Only a Guarantor or a Representative may
give the notice. Nothing in this Article 12 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 12.12. Authorization to Effect Subordination. Each Holder of
--------------------------------------
a Security by the Holder's acceptance thereof authorizes and directs the Trustee
on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 12, and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all such purposes,
including without limitation the timely filing of a claim for the unpaid balance
of the Securities held by such Holder in the form required in any Insolvency or
Liquidation Proceeding and causing such claim to be approved. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time of such claim, the Representatives of the Designated
Senior Debt, including the Credit Agent, are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.
SECTION 12.13. Amendments. Any amendment to the provisions of this
-----------
Article 12 (which relate to subordination or the related definitions) shall
require the consent of the Holders of at least 75% in aggregate principal amount
of the Securities then outstanding if such amendment would adversely affect the
rights of the Holders of Securities.
ARTICLE 13
Miscellaneous
-------------
69
SECTION 13.01. Trust Indenture Act Controls. If any provision of
-----------------------------
this Indenture limits, qualifies or conflicts with the duties imposed by TIA
Section 318(c), the imposed duties shall control.
SECTION 13.02. Notices. Any notice or communication by the Company,
--------
the Guarantors or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next
day delivery, to the others' address:
If to the Company:
Advance Stores Company, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
If to the Trustee:
The Bank of New York
c/o United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department/Auto Stores
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications. All
notices and communications (other than those sent to Holders) shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier promising
next Business Day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail or by overnight air courier promising next Business Day delivery to its
address shown on the register kept by the Registrar. Any notice or communication
shall also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders. If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it, or notice or communication, however, shall not be effective unless,
in the case of the Trustee, actually received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. Communication by Holders of Securities with Other
-------------------------------------------------
Holders of Securities. Holders may communicate pursuant to TIA Section 312(b)
----------------------
with other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
70
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
Upon any request or application by the Company or the Guarantors to the Trustee
to take any action under this Indenture (other than the initial issuance of the
Securities), the Company or Guarantor shall furnish to the Trustee upon request:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
----------------------------------------------
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)
and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous, and provided that any such certificate or opinion names the Trustee
as an addressee and is furnished to the Trustee at the time of delivery of such
certificate or opinion. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
71
SECTION 13.06. Rules by Trustee and Agents. The Trustee may make
----------------------------
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 13.07. No Personal Liability of Directors, Officers,
---------------------------------------------
Employees and Stockholders. No director, officer, employee, incorporator or
---------------------------
stockholder of the Company or the Guarantors, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Securities, this
Indenture, the Subsidiary Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Securities
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.
SECTION 13.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW
--------------
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE SECURITIES AND THE
SUBSIDIARY GUARANTEES.
SECTION 13.09. No Adverse Interpretation of Other Agreements. This
----------------------------------------------
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. Successors. All agreements of the Company and the
-----------
Guarantors in this Indenture, the Securities and the Subsidiary Guarantees shall
bind their respective successors and assigns. All agreements of the Trustee in
this Indenture shall bind its successors and assigns.
SECTION 13.11. Severability. In case any provision in this Indenture
-------------
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 13.12. Counterpart Originals. The parties may sign any
----------------------
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
SECTION 13.13. Table of Contents, Headings, Etc. The Table of
---------------------------------
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
SECTION 13.14. Benefits of Indenture. Nothing in this Indenture or
----------------------
in the Securities, express or implied, shall give to any Person, other than the
parties hereto, the holders of the Senior Debt (subject to Articles 10 and 12
hereof) and the Holders of the Securities, any benefits or any legal or
equitable right, remedy or claim under this Indenture or the Securities.
72
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ADVANCE STORES COMPANY,
INCORPORATED, as Issuer,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Controller
ADVANCE TRUCKING CORPORATION,
as Guarantor,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Controller
LARALEV, INC., as Guarantor,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
WESTERN AUTO SUPPLY COMPANY,
as Guarantor,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Controller
THE BANK OF NEW YORK,
as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
APPENDIX A
PROVISIONS RELATING TO ORIGINAL SECURITIES,
-------------------------------------------
ADDITIONAL SECURITIES AND EXCHANGE SECURITIES
---------------------------------------------
1. Definitions.
------------
1.1 Definitions. For the purposes of this Appendix A the following
------------
terms shall have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Global Security,
Euroclear and Clearstream, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.
"Definitive Security" means a certificated Initial Security or
Exchange Security (bearing the Restricted Securities Legend if the transfer of
such Security is restricted by applicable law) that does not include the Global
Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Offer" means an the offer by the Company, pursuant to a
Registration Agreement, to certain Holders of Initial Securities, to issue and
deliver to such Holders, in exchange for their Initial Securities, a like
aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means ▇.▇. ▇▇▇▇▇▇ Securities Inc., Credit Suisse
First Boston and ▇▇▇▇▇▇ Brothers Inc.
"Purchase Agreement" means (a) the Purchase Agreement dated October
24, 2001, among the Company, the Guarantors and the Initial Purchasers and (b)
any other similar Purchase Agreement relating to Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Agreement" means (a) the Exchange and Registration
Rights Agreement dated October 31, 2001, among the Company, the Guarantors and
the Initial Purchasers and (b) any other similar Exchange and Registration
Rights Agreement relating to Additional Securities.
2
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means the period
of 40 consecutive days beginning on and including the later of (a) the day on
which such Securities are first offered to persons other than distributors (as
defined in Regulation S under the Securities Act) in reliance on Regulation S,
notice of which day shall be promptly given by the Company to the Trustee, and
(b) the Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed by
the Company in connection with the offer and sale of Initial Securities pursuant
to a Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
1.2 Other Definitions.
------------------
Term: Defined in Section:
---- ------------------
"Agent Members"............................................. 2.1(c)
"IAI Global Security"....................................... 2.1(b)
"Global Security"........................................... 2.1(b)
"Regulation S Global Security".............................. 2.1(b)
"Rule 144A Global Security"................................. 2.1(b)
2. The Securities.
---------------
2.1 Form and Dating. (a) The Initial Securities issued on the date
----------------
hereof will be (i) offered and sold by the Company pursuant to a Purchase
Agreement and (ii) except for $3,000,000 principal amount of Securities which
will be sold to Mozart Investments Inc., wholly-owned by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an
affiliate of the Company, and $3,000,000 principal amount which will be sold to
Mozart One, L.L.C., wholly-owned by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust dated July 13,
1964, an affiliate of the Company, in each case in reliance upon another
exemption from
3
registration under the Securities Act, resold, initially only to (1) QIBs in
reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in
Regulation S) in reliance on Regulation S. Such Initial Securities may
thereafter be transferred to, among others, QIBs, purchasers in reliance on
Regulation S and, except as set forth below, IAIs in accordance with Rule 501.
Additional Securities offered after the date hereof may be offered and sold by
the Company from time to time pursuant to one or more Purchase Agreements in
accordance with applicable law.
(b) Global Securities. Rule 144A Securities shall be issued
------------------
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend and
Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as provided in
this Indenture. One or more global securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the "IAI Global Security") shall
also be issued on the Closing Date, deposited with the Securities Custodian, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture to accommodate transfers of beneficial interests in the Securities to
IAIs subsequent to the initial distribution. Beneficial ownership interests in
the Regulation S Global Security shall not be exchangeable for interests in the
Rule 144A Global Security, the IAI Global Security or any other Security without
a Restricted Securities Legend until the expiration of the Restricted Period.
The Rule 144A Global Security, the IAI Global Security and the Regulation S
Global Security are each referred to herein as a "Global Security" and are
collectively referred to herein as "Global Securities", provided, that the term
--------
"Global Security" when used in Sections 2.1(b)(third paragraph), 2.1(c),
2.3(g)(i), 2.3(h)(i) and 2.4 shall also include any Security in global form
issued in connection with an Exchange Offer. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
and on the schedules thereto as hereinafter provided.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a
----------------------
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(c) and Section 2.2 and pursuant to an order of the Company
signed by two Officers, authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (ii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as Securities Custodian.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as Securities Custodian or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security 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 Depositary or impair, as between the
Depositary and its
4
Agent Members, the operation of customary practices of such Depositary governing
the exercise of the rights of a holder of a beneficial interest in any Global
Security.
(d) Definitive Securities. Except as provided in Section 2.3 or 2.4,
----------------------
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and make
---------------
available for delivery upon a written order of the Company signed by two
Officers (a) Original Securities for original issue on the date hereof in an
aggregate principal amount of $200,000,000, (b) subject to the terms of this
Indenture, Additional Securities in an unlimited aggregate principal amount and
(3) the Exchange Securities for issue only in an Exchange Offer pursuant to a
Registration Agreement and for a like principal amount of Initial Securities
exchanged pursuant thereto. Such order shall specify the amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities or Exchange Securities. The aggregate principal amount of Securities
that may be outstanding at any time is unlimited.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
----------------------
Securities. When Definitive Securities are presented to the Registrar with a
request:
(i) to register the transfer of such Definitive Securities; or
(ii) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
-------- -------
that the Definitive Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(2) in the case of Transfer Restricted Securities, are accompanied by
the following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse side of the Initial Security); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on the
reverse side of the Initial Security); or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act or in reliance upon another exemption from the
registration requirements of the Securities Act, (x) a certification
to that effect (in the form set forth on the reverse side of the
Initial Security) and (y) if the Company so requests, an opinion of
5
counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in
Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
-------------------------------------------------------
Beneficial Interest in a Global Security. A Definitive Security may not be
-----------------------------------------
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side of the
Initial Security) that such Definitive Security is being transferred (1) to
a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to the
Trustee a signed letter substantially in the form of Exhibit D or (3)
outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel
such Definitive Security and cause, or direct the Securities Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate
principal amount of Securities represented by the Global Security to be
increased by the aggregate principal amount of the Definitive Security to
be exchanged and shall credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the Global
Security equal to the principal amount of the Definitive Security so
canceled. If no Global Securities are then outstanding and the Global
Security has not been previously exchanged for certificated securities
pursuant to Section 2.4, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer
-------------------------------------------
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary to be credited with a beneficial interest in such Global Security or
another Global Security and such account shall be credited in accordance with
such order with a beneficial interest in the applicable Global Security and the
account of the Person making the transfer shall be debited by an amount equal to
the beneficial interest in the Global Security being transferred. Transfers by
an owner of a beneficial interest in the Rule 144A Global Security or the IAI
Global Security to a transferee who takes delivery of such interest through the
Regulation S Global Security, whether before or after the expiration of the
Restricted Period, shall be made only upon receipt by the Trustee of a
certification in the form provided on the reverse of the Initial Securities from
the transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred shall be held immediately thereafter through Euroclear
or Clearstream. In the case of a transfer of a beneficial interest in either
the
6
Regulation S Global Security or the Rule 144A Global Security for an
interest in the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such
interest is being transferred in an amount equal to the principal amount of
the interest to be so transferred, and the Registrar shall reflect on its
books and records the date and a corresponding decrease in the principal
amount of Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of an Exchange
Offer or the effectiveness of a Shelf Registration Statement with respect
to such Securities, such Securities may be exchanged only in accordance
with such procedures as are substantially consistent with the provisions of
this Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with Rule 144A, Regulation S or such other applicable exemption from
registration under the Securities Act, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Restrictions on Transfer of Regulation S Global Security. (i)
---------------------------------------------------------
Prior to the expiration of the Restricted Period, interests in the Regulation S
Global Security may only be held through Euroclear or Clearstream. During the
Restricted Period, beneficial ownership interests in the Regulation S Global
Security may only be sold, pledged or transferred through Euroclear or
Clearstream in accordance with the Applicable Procedures and only (1) to the
Company, (2) so long as such security is eligible for resale pursuant to Rule
144A, to a person whom the selling holder reasonably believes is a QIB that
purchases for its own account or for the account of a QIB to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, (3) in an offshore transaction in accordance with Regulation S, (4)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, (5) to an IAI purchasing for
its own account, or for the account of such an IAI, in a minimum principal
amount of Securities of $250,000 or (6) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States. Prior to the
expiration of the Restricted Period, transfers by an owner of a beneficial
interest in the Regulation S Global Security to a transferee who takes delivery
of such interest through the Rule 144A Global Security or the IAI Global
Security shall be made only in accordance with Applicable Procedures and upon
receipt by the Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Initial Security
to the effect that such transfer is being made to (1) a QIB within the meaning
of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an
IAI purchasing for its own account, or for the account of such an IAI, in a
minimum principal amount of the Securities of $250,000. Such written
7
certification shall no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Security for an interest in the IAI Global Security, the transferee must
furnish a signed letter substantially in the form of Exhibit D to the Trustee.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Security shall be
transferable in accordance with applicable law and the other terms of this
Indenture.
(e) Legend.
-------
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form (each defined term in the legend being defined as such for purposes of
the legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR
8
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."
Each Definitive Security shall bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security that
does not bear the legends set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security if the Holder certifies
in writing to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on the
reverse of the Initial Security).
(iii) After a transfer of any Original or Additional Securities
during the period of the effectiveness of a Shelf Registration Statement
with respect to such Original or Additional Securities, as the case may be,
all requirements pertaining to the Restricted Securities Legend on such
Original or Additional Securities shall cease to apply and the requirements
that any such Original or Additional Securities be issued in global form
shall continue to apply.
(iv) Upon the consummation of an Exchange Offer with respect to the
Original or Additional Securities pursuant to which Holders of such
Original or Additional Securities are offered Exchange Securities in
exchange for their Original or Additional Securities, all requirements
pertaining to Original or Additional Securities that Original or Additional
Securities be issued in global form shall continue to apply, and Exchange
Securities in global form without the Restricted Securities Legend shall be
available to Holders that exchange such Initial Securities in such Exchange
Offer.
(v) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Security acquired pursuant to Regulation S, all
requirements that such Initial Security bear the Restricted Securities
Legend shall cease to apply and the requirements requiring any such Initial
Security be issued in global form shall continue to apply.
(vi) Any Additional Securities sold in a registered offering shall
not be required to bear the Restricted Securities Legend.
(f) Cancelation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to
9
the Trustee for cancelation or retained and canceled by the Trustee. At any time
prior to such cancelation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, transferred in exchange for an interest in
another Global Security, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
-----------
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities and
Global Securities at the Registrar's request.
(ii) 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, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchanges pursuant to Sections
2.07, 3.06, 4.10, 4.13 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected
by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
-----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under
10
applicable law with respect to any transfer of any interest in any Security
(including any transfers between or among Depositary participants, members
or beneficial owners in any Global Security) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of
this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
2.4 Definitive Securities. (a) A Global Security deposited with the
----------------------
Depositary or with the Trustee as Securities Custodian pursuant to Section 2.1
or issued in connection with an Exchange Offer shall be transferred to the
beneficial owners thereof in the form of Definitive Securities in an aggregate
principal amount equal to the principal amount of such Global Security, in
exchange for such Global Security, only if such transfer complies with Section
2.3 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a Depositary for such Global Security or if at any time the
Depositary ceases to be a "clearing agency" registered under the Exchange Act,
and a successor depositary is not appointed by the Company within 90 days of
such notice or after the Company becomes aware of such cessation, or (ii) an
Event of Default has occurred and is continuing or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and make available for
delivery, upon such transfer of each portion of such Global Security, an equal
aggregate principal amount of Definitive Securities of authorized denominations.
Any portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial Security in the form of a Definitive Security
delivered in exchange for an interest in the Global Security shall, except as
otherwise provided by Section 2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security 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 Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE 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 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 DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
2
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Security shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
3
No. $__________
10-1/4% Senior Subordinated Note due 2008
CUSIP No. ______
ISIN No. _____
ADVANCE STORES COMPANY, INCORPORATED, a Virginia corporation, promises
to pay to [Cede & Co.], or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global Security
attached hereto]/1/ on April 15, 2008.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other side of this
Security.
________________________
/1/ Use the Schedule of Increases and Decreases language if Note is in Global
Form.
4
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
ADVANCE STORES COMPANY, INCORPORATED,
by ____________________________________
Name:
Title:
by ____________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:_________________________
Authorized Signatory
______________
*/ If the Security is to be issued in global form, add the Global Securities
Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
5
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10-1/4% Senior Subordinated Notes due 2008
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. (a) Advance Stores Company, Incorporated or its
---------
successor (the "Company"), promises to pay interest on the principal amount of
this Security at the rate of 10-1/4% per annum and shall pay the Liquidated
Damages, if any, payable pursuant to Section 3 of the Registration Agreement
referred to below. The Company will pay interest and Liquidated Damages, if any,
in United States dollars (except as otherwise provided herein) semi-annually in
arrears on April 15 and October 15, commencing on April 15, 2002, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Securities shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from October 15, 2001; provided that if there is no existing Default or Event of
Default in the payment of interest, and if this Security is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date, except in the case of the original issuance of Securities, in
which case interest shall accrue from October 15, 2001. The Company shall pay
interest (including, to the extent permitted by applicable law, post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Securities to the extent lawful; it shall pay interest (including, to the extent
permitted by applicable law, post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year comprised of
twelve 30-day months.
(b) Liquidated Damages. The Holder of this Security is entitled to
-------------------
the benefits of an Exchange and Registration Rights Agreement, dated as of
October 31, 2001, among the Company, Advance Trucking Corporation, LARALEV, INC.
and Western Auto Supply Company (the "Guarantors") and the Initial Purchasers
named therein (the "Registration Agreement"). Capitalized terms used in this
paragraph (b) but not defined herein have the meanings assigned to them in the
Registration Agreement. If (i) the Shelf Registration Statement or Exchange
Offer Registration Statement, as applicable under the Registration Agreement, is
not filed with the Commission on or prior to 60 days after the closing date of
the Acquisition, (ii) the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, is not declared effective within 150
days after the closing date of the Acquisition (or in the case of a Shelf
Registration Statement required to be filed in response to a change in law or
the applicable interpretations of Commission's staff, if later, within 45 days
after publication of the change in law or interpretation), (iii) the Exchange
Offer is not consummated on or prior to 180 days after the closing date of the
Acquisition, or (iv) the Shelf Registration Statement is filed and declared
effective within 150 days after the closing date of the Acquisition (or in the
case of a Shelf Registration Statement required to be filed in response to a
change in law or the applicable interpretations of Commission's staff, if later,
within 45 days after publication of the change in law or interpretation) but
shall thereafter cease to be effective (at any time that the Company is
obligated to maintain the effectiveness thereof) without being succeeded within
30 days by an additional Registration Statement filed and declared effective
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), the Company shall pay liquidated damages to each Holder of Transfer
Restricted Securities, during the period of one or more such Registration
Defaults, in an amount equal to $0.192 per week per $1,000 principal amount of
the Securities
6
constituting Transfer Restricted Securities held by such Holder until the
applicable Registration Statement is filed or declared effective, the Exchange
Offer is consummated or the Shelf Registration Statement again becomes
effective, as the case may be. All accrued liquidated damages shall be paid to
Holders in the same manner as interest payments on the Securities on semi-annual
payment dates which correspond to interest payment dates for the Securities.
Following the cure of all Registration Defaults, the accrual of liquidated
damages shall cease. The Trustee shall have no responsibility with respect to
the determination of the amount of any such liquidated damages. For purposes of
the foregoing, "Transfer Restricted Securities" means (i) each Initial Security
until the date on which such Initial Security has been exchanged for a freely
transferable Exchange Security in the Exchange Offer, (ii) each Initial Security
until the date on which such Initial Security has been effectively registered
under the Securities Act and disposed of in accordance with a Shelf Registration
Statement or (iii) each Initial Security until the date on which such Initial
Security is distributed to the public pursuant to Rule 144 under the Securities
Act or is saleable pursuant to Rule 144(k) under the Securities Act.
2. Method of Payment. The Company shall pay interest on the
------------------
Securities (except defaulted interest) to the Persons who are registered Holders
at the close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, Liquidated Damages, if any, and interest in money of the United States
of America that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium, if any, Liquidated Damages, if any, and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company or any successor depositary.
The Company will make all payments in respect of a certificated Security
(including principal, premium, if any, Liquidated Damages, if any, and
interest), at the office of the Paying Agent, except that, at the option of the
Company, payment of interest or Liquidated Damages may be made by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar. Initially, The Bank of New York, the
---------------------------
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act in any such capacity.
4. Indenture. The Company issued the Securities under an Indenture
----------
dated as of October 31, 2001 ("Indenture") among the Company, the Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made a part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"). The
Securities are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms.
The Securities are senior subordinated unsecured obligations of the
Company. This Security is one of the [Original] [Additional] Securities referred
to in the Indenture. The Securities include the Original Securities, the
Additional Securities and any Exchange Securities
7
issued in exchange for Initial Securities pursuant to the Indenture. The
Original Securities, the Additional Securities and any Exchange Securities are
treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of the Company and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of such Restricted Subsidiaries, enter into or permit certain transactions
with Affiliates, create or incur Liens and make asset sales. The Indenture also
imposes limitations on the ability of the Company to consolidate or merge with
or into any other Person or convey, transfer or lease all or substantially all
its property.
To guarantee the due and punctual payment of the principal, interest
and Liquidated Damages, if any, on the Securities and all other amounts payable
by the Company under the Indenture and the Securities when and as the same shall
be due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Guarantors have jointly
and severally unconditionally guaranteed the Securities on a senior subordinated
basis pursuant to the terms of the Indenture.
5. Optional Redemption; Special Redemption. (a) Optional
----------------------------------------
Redemption. Except as set forth in paragraph 5(b) below, the Securities shall
not be redeemable at the Company's option prior to April 15, 2003. Thereafter,
the Securities shall be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below together with accrued and unpaid interest and any Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
---- -----------
2003.......................................................... 105.125%
2004.......................................................... 103.417%
2005.......................................................... 101.708%
2006 and thereafter........................................... 100.000%
(b) Special Redemption. Notwithstanding the foregoing, in the event
that, (i) in the sole judgment of the Company, the Acquisition will not be
consummated by December 31, 2001, then the Company may redeem the Securities, in
whole but not in part, at its sole option prior to January 15, 2002, at a
redemption price (the "Special Redemption Price") in cash equal to 101% of the
issue price of the Securities plus accrued and unpaid interest (including
accrued original issue discount) to the Special Redemption Date or (ii) the
Acquisition has not be consummated on or prior to December 31, 2001, then the
Company will mandatorily redeem all the Securities on January 15, 2002, at the
Special Redemption Price. The "Special Redemption Date" means the earlier of
(a) the date that the Company elects to redeem all the Securities if in the sole
judgment of the Company, the Acquisition will not be consummated by December 31,
2001, or (b) January 15, 2002, if the Acquisition is not consummated by
December 31, 2001 (either redemption, a "Special Redemption").
6. Mandatory Redemption. Except as set forth in paragraphs 5(b) and
---------------------
7 hereof, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Securities.
8
7. Repurchase at Option of Holder. (a) Upon the occurrence of a
-------------------------------
Change of Control, each Holder of Securities will have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of purchase. Within 30 days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
setting forth the procedures governing the Change of Control Offer required by
the Indenture.
(b) In connection with any Asset Sale, when the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company will be required to make an
offer to all Holders of Securities and, to the extent required by the terms of
any Pari Passu Indebtedness to all holders of such Pari Passu Indebtedness (an
"Asset Sale Offer") to purchase the maximum principal amount of Securities and
any such Pari Passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase, in accordance with the procedures set forth in
the Indenture or such Pari Passu Indebtedness, as applicable. To the extent that
the aggregate principal amount of Securities and any such Pari Passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company or its Restricted Subsidiaries may use any remaining
Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Securities and any such Pari Passu Indebtedness surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Securities to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of the Securities that are the subject of an offer to
purchase will receive a Change of Control Offer or Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Securities
purchased by completing the form titled "Option of Holder to Elect Purchase"
appearing below.
8. Notice of Redemption or Repurchase. Notice of a redemption or
-----------------------------------
repurchase shall be mailed at least 30 days but not more than 60 days before the
redemption date or the repurchase date (except in the case of a Special
Redemption pursuant to paragraph 5(b) above, in which case notice shall be
mailed at least 10 days prior to the Special Redemption Date) to each Holder
whose Securities are to be redeemed or repurchased at its registered address.
Securities in denominations larger than $1,000 may be redeemed or repurchased in
part but only in whole multiples of $1,000, unless all of the Securities held by
a Holder are to be redeemed or repurchased. On and after the redemption date or
repurchased date, as the case may be, interest and Liquidated Damages, if any,
ceases to accrue on the Securities or portions thereof called for redemption or
repurchase, as the case may be, unless the Company defaults in making the
redemption payment or repurchase payment, as the case may be.
9. Denominations, Transfer, Exchange. The Securities are in
----------------------------------
registered form without coupons in initial denominations of $1,000 and integral
multiples of $1,000. The transfer of the Securities may be registered and the
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Security or portion of a
Security selected for redemption, except for the unredeemed portion of any
Security being redeemed in part. Also, it need not
9
exchange or register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. Except as provided in paragraph 2 hereof,
----------------------
the registered Holder of a Security may be treated as its owner for all
purposes.
11. Amendment, Supplement and Waiver. Subject to the following
---------------------------------
paragraphs and the provisions of the Indenture, the Indenture, the Securities
and the Subsidiary Guarantees may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), and any existing default or compliance with any provision of the
Indenture, the Securities and the Subsidiary Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Securities (including consents obtained in connection with a
purchase of, or a tender offer or exchange offer for, Securities). Any amendment
to the provisions of Article 10 or 12 shall require the consent of the Holders
of at least 75% in aggregate principal amount of Securities then outstanding if
such amendment would adversely affect the rights of the Holders of Securities.
Without the consent of any Holder of Securities, the Company, the
Guarantors and the Trustee may amend or supplement the Indenture, the Securities
or the Subsidiary Guarantees to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of certificated
Securities, to provide for the assumption of the Company's or a Guarantor's
obligations to Holders of Securities in the case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to the
Holders of Securities or that does not materially adversely affect the legal
rights under the Indenture of any such Holder, to comply with requirements of
the Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to allow any Subsidiary to guarantee the
Securities or to provide for the issuance of the Exchange Securities or
Additional Securities.
12. Defaults and Remedies. Events of Default include: (i) default
----------------------
for 30 days in the payment when due of interest on, or Liquidated Damages, if
any, with respect to, the Securities (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment when due of
the principal of or premium, if any, on the Securities (whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company or any of its Restricted Subsidiaries for 30 days after notice from
the Trustee or at least 25% in aggregate principal amount of the Securities then
outstanding to comply with the provisions described in Sections 4.07, 4.09,
4.10, 4.13 or 4.19 of the Indenture; (iv) failure by the Company or any of its
Restricted Subsidiaries for 60 days after notice from the Trustee or the Holders
of at least 25% in aggregate principal amount of the Securities then outstanding
to comply with its other agreements in the Indenture or the Securities; (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness at final maturity (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which
10
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $20.0 million or more in the case of clause (a) or (b);
(vi) failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $20.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) any Subsidiary Guarantee of a Significant Subsidiary
shall be held in any judicial proceeding to be unenforceable or invalid or,
except as permitted by the Indenture, shall cease for any reason to be in full
force and effect or any Guarantor that is a Significant Subsidiary, or any
Person acting on behalf of any Guarantor that is a Significant Subsidiary, shall
deny or disaffirm its obligations under its Subsidiary Guarantee; and (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, all
outstanding Securities will become due and payable without further action or
notice. Upon any acceleration of maturity of the Securities, all principal of
and accrued interest and Liquidated Damages, if any, on the Securities shall be
due and payable immediately. Holders of the Securities may not enforce the
Indenture or the Securities except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. In the event of a declaration of
acceleration of the Securities because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness described in
clause (v) of the preceding paragraph, the declaration of acceleration of the
Securities shall be automatically annulled if the holders of any Indebtedness
described in clause (v) of the preceding paragraph have rescinded the
declaration of acceleration in respect of such Indebtedness within 30 days of
the date of such declaration and if (a) the annulment of the acceleration of
Securities would not conflict with any judgment or decree of a court of
competent jurisdiction and (b) all existing Events of Default, except nonpayment
of principal or interest on the Securities that became due solely because of the
acceleration of the Securities, have been cured or waived.
13. Subordination. The Securities and Subsidiary Guarantees are
--------------
subordinated to Senior Debt, as defined in the Indenture. To the extent
provided in the Indenture, Senior Debt must be paid before the Securities may be
paid. The Company and each Guarantor agrees, and each Holder by accepting a
Security agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-
in-fact for such purpose.
14. Trustee Dealings with Company. The Trustee, in its individual or
------------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Guarantors or their respective Affiliates, and may
otherwise deal with the Company, the Guarantors or their respective Affiliates,
as if it were not the Trustee.
15. No Recourse Against Others. No director, officer, employee,
---------------------------
incorporator or stockholder, of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company or any Guarantor under the
Securities or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of
11
Securities by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.
16. Authentication. This Security shall not be valid until
---------------
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name
--------------
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP and ISIN Numbers. The Company has caused CUSIP and ISIN
-----------------------
numbers to be printed on the Securities and the Trustee may use CUSIP and ISIN
numbers in notices of redemption as a convenience to the Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Agreement.
Requests may be made to:
Advance Stores Company, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
12
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date: __________________________ Your Signature: _______________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
13
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER RESTRICTED SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
[_] has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Securities
are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] to the Registrar for registration in the name of the Holder,
without transfer; or
(3) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(4) [_] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or
(5) [_] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933 and such Security shall
be held immediately after the transfer through Euroclear or
Clearstream until the expiration of the Restricted Period (as defined
in the Indenture); or
(6) [_] to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter containing certain
representations and agreements; or
(7) [_] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
14
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof; provided, however, that if box
-------- -------
(5), (6) or (7) is checked, the Trustee may require, prior to registering
any such transfer of the Securities, such legal opinions, certifications
and other information as 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.
_______________________________
Your Signature
Signature Guarantee:
Date: ____________________________ _______________________________
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security 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, 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
15
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Date of Exchange Amount of Decrease in Amount of increase in Principal amount of Signature of authorized
Principal Amount of Principal Amount of this Global Security signatory of Trustee or
this Global Security this Global Security following such Securities Custodian
decrease or increase
16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.13 (Change of Control) of the
Indenture, check the box:
Asset Sale [_] Change of Control [_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.10 or 4.13 of the Indenture, state the amount
($1,000 or an integral multiple thereof):
$
Date: ___________________________ Your Signature: ____________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE 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 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 DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
2
No. $__________
10-1/4% Senior Subordinated Note due 2008
CUSIP No. ______
ISIN No. _____
ADVANCE STORES COMPANY, INCORPORATED, a Virginia corporation, promises
to pay to [Cede & Co.], or registered assigns, the principal sum [of
Dollars] [listed on the Schedule of Increases or Decreases in Global Security
attached hereto]/2/ on April 15, 2008.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other side of this
Security.
________________________
/2/ Use the Schedule of Increases and Decreases language if Note is in Global
Form.
3
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
ADVANCE STORES COMPANY,
INCORPORATED,
by _________________________________
Name:
Title:
by _________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
___________________________
Authorized Signatory
______________
*/ If the Security is to be issued in global form, add the Global Securities
Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO GLOBAL
SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
4
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10-1/4% Senior Subordinated Note due 2008
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Advance Stores Company, Incorporated or its successor
---------
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate of 10-1/4% per annum. The Company will pay interest in
United States dollars (except as otherwise provided herein) semi-annually in
arrears on April 15 and October 15, commencing on April 15, 2002, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Securities shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from October 15, 2001, provided that if there is no existing Default or Event of
Default in the payment of interest, and if this Security is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date, except in the case of the original issuance of Securities, in
which case interest shall accrue from October 15, 2001. The Company shall pay
interest (including, to the extent permitted by applicable law, post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Securities to the extent lawful; it shall pay interest (including, to the extent
permitted by applicable law, post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year comprised of
twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the
------------------
Securities (except defaulted interest) to the Persons who are registered Holders
at the close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including principal,
premium and interest) shall be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company or any successor
depositary. The Company will make all payments in respect of a certificated
Security (including principal, premium, if any, and interest), at the office of
the Paying Agent, except that, at the option of the Company, payment of interest
may be made by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar. Initially, The Bank of New York, the
---------------------------
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act in any such capacity.
5
4. Indenture. The Company issued the Securities under an Indenture
----------
dated as of October 31, 2001 ("Indenture") among the Company, the Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made a part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"). The
Securities are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms.
The Securities are senior subordinated unsecured obligations of the
Company. This Security is one of the [Exchange] [Additional] Securities referred
to in the Indenture. The Securities include the Original Securities, the
Additional Securities and any Exchange Securities issued in exchange for Initial
Securities pursuant to the Indenture. The Original Securities, the Additional
Securities and any Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends
and other distributions, incur Indebtedness, enter into consensual restrictions
upon the payment of certain dividends and distributions by such Restricted
Subsidiaries, issue or sell shares of capital stock of such Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or incur Liens and make asset sales. The Indenture also imposes limitations on
the ability of the Company to consolidate or merge with or into any other Person
or convey, transfer or lease all or substantially all its property.
To guarantee the due and punctual payment of the principal and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Guarantors have jointly and severally
unconditionally guaranteed the Securities on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption. The Securities shall not be redeemable at
--------------------
the Company's option prior to April 15, 2003. Thereafter, the Securities shall
be subject to redemption at any time at the option of the Company, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below together
with accrued and unpaid interest and any Liquidated Damages, if any, thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
---- -----------
2003....................................................... 105.125%
2004....................................................... 103.417%
2005....................................................... 101.708%
2006 and thereafter........................................ 100.000%
6. Mandatory Redemption. Except as set forth in paragraph 7 hereof,
---------------------
the Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Securities.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a
-------------------------------
Change of Control, each Holder of Securities will have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101%
6
of the aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of purchase. Within 30 days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
setting forth the procedures governing the Change of Control Offer required by
the Indenture.
(b) In connection with any Asset Sale, when the aggregate amount of
excess Proceeds exceeds $10.0 million, the Company will be required to make an
offer to all Holders of Securities and, to the extent required by the terms of
any Pari Passu Indebtedness to all holders of such Pari Passu Indebtedness (an
"Asset Sale Offer") to purchase the maximum principal amount of Securities and
any such Pari Passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase, in accordance with the procedures set forth in
the Indenture or such Pari Passu Indebtedness, as applicable. To the extent that
the aggregate principal amount of Securities and any such Pari Passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company or its Restricted Subsidiaries may use any remaining
Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Securities and any such Pari Passu Indebtedness surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Securities to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of the Securities that are the subject of an offer to
purchase will receive a Change of Control Offer or Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Securities
purchased by completing the form titled "Option of Holder to Elect Purchase"
appearing below.
8. Notice of Redemption or Repurchase. Notice of a or repurchase
-----------------------------------
shall be mailed at least 30 days but not more than 60 days before the redemption
date or the repurchase date to each Holder whose Securities are to be redeemed
or repurchased at its registered address. Securities in denominations larger
than $1,000 may be redeemed or repurchased in part but only in whole multiples
of $1,000, unless all of the Securities held by a Holder are to be redeemed or
repurchased. On and after the redemption date or repurchase date, as the case
may be, interest ceases to accrue on the Securities or portions thereof called
for redemption or repurchase, as the case may be, unless the Company defaults in
making the redemption payment or repurchase payment, as the case may be.
9. Denominations, Transfer, Exchange. The Securities are in
----------------------------------
registered form without coupons in initial denominations of $1,000 and integral
multiples of $1,000. The transfer of the Securities may be registered and the
Securities may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Security or portion of a
Security selected for redemption, except for the unredeemed portion of any
Security being redeemed in part. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. Persons Deemed Owners. Except as provided in paragraph 2 hereof,
----------------------
the registered Holder of a Security may be treated as its owner for all
purposes.
7
11. Amendment, Supplement and Waiver. Subject to the following
---------------------------------
paragraphs and to the provisions of the Indenture, the Indenture, the Securities
and the Subsidiary Guarantees may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), and any existing default or compliance with any provision of the
Indenture, the Securities and the Subsidiary Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Securities (including consents obtained in connection a purchase of,
or with a tender offer or exchange offer for, Securities). Any amendment to the
provisions of Article 10 or 12 shall require the consent of the Holders of at
least 75% in aggregate principal amount of Securities then outstanding if such
amendment would adversely affect the rights of the Holders of Securities.
Without the consent of any Holder of Securities, the Company, the
Guarantors and the Trustee may amend or supplement the Indenture, the Securities
or the Subsidiary Guarantees to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Securities in addition to or in place of certificated
Securities, to provide for the assumption of the Company's or a Guarantor's
obligations to Holders of Securities in the case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to the
Holders of Securities or that does not materially adversely affect the legal
rights under the Indenture of any such Holder, to comply with requirements of
the Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act, to allow any Subsidiary to guarantee the
Securities or to provide for the issuance of the Exchange Securities or
Additional Securities.
12. Defaults and Remedies. Events of Default include: (i) default
----------------------
for 30 days in the payment when due of interest on, or Liquidated Damages, if
any, with respect to, the Securities (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment when due of
the principal of or premium, if any, on the Securities (whether or not
prohibited by the subordination provisions of the Indenture); (iii) failure by
the Company or any of its Restricted Subsidiaries for 30 days after notice from
the Trustee or at least 25% in aggregate principal amount of the Securities then
outstanding to comply with the provisions described in Sections 4.07, 4.09,
4.10, 4.13 or 4.19 of the Indenture; (iv) failure by the Company or any of its
Restricted Subsidiaries for 60 days after notice from the Trustee or the Holders
of at least 25% in aggregate principal amount of the Securities then outstanding
to comply with its other agreements in the Indenture or the Securities; (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness at final maturity (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $20.0 million or more in the case of clause (a) or
(b); (vi) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $20.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) any Subsidiary Guarantee of a Significant Subsidiary
shall be held in any judicial proceeding to be unenforceable or invalid or,
except as permitted by the Indenture, shall
8
cease for any reason to be in full force and effect or any Guarantor that is a
Significant Subsidiary, or any Person acting on behalf of any Guarantor that is
a Significant Subsidiary, shall deny or disaffirm its obligations under its
Subsidiary Guarantee; and (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Securities
may declare all the Securities to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, all
outstanding Securities will become due and payable without further action or
notice. Upon any acceleration of maturity of the Securities, all principal of
and accrued interest and Liquidated Damages, if any, on the Securities shall be
due and payable immediately. Holders of the Securities may not enforce the
Indenture or the Securities except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Securities notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. In the event of a declaration of
acceleration of the Securities because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness described in
clause (v) of the preceding paragraph, the declaration of acceleration of the
Securities shall be automatically annulled if the holders of any Indebtedness
described in clause (v) of the preceding paragraph have rescinded the
declaration of acceleration in respect of such Indebtedness within 30 days of
the date of such declaration and if (a) the annulment of the acceleration of
Securities would not conflict with any judgment or decree of a court of
competent jurisdiction and (b) all existing Events of Default, except nonpayment
of principal or interest on the Securities that became due solely because of the
acceleration of the Securities, have been cured or waived.
13. Subordination. The Securities and Subsidiary Guarantees are
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subordinated to Senior Debt, as defined in the Indenture. To the extent
provided in the Indenture, Senior Debt must be paid before the Securities may be
paid. The Company and each Guarantor agrees, and each Holder by accepting a
Security agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-
in-fact for such purpose.
14. Trustee Dealings with Company. The Trustee, in its individual or
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any other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Guarantors or their respective Affiliates, and may
otherwise deal with the Company, the Guarantors or their respective Affiliates,
as if it were not the Trustee.
15. No Recourse Against Others. No director, officer, employee,
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incorporator or stockholder, of the Company or any Guarantor, as such, shall
have any liability for any obligations of the Company or any Guarantor under the
Securities or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
16. Authentication. This Security shall not be valid until
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authenticated by the manual signature of the Trustee or an authenticating
agent.
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17. Abbreviations. Customary abbreviations may be used in the name
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of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated
-----------------------
by the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP and ISIN numbers to be printed on the Securities and the Trustee
may use CUSIP and ISIN numbers in notices of redemption as a convenience to the
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Agreement.
Requests may be made to:
Advance Stores Company, Incorporated
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
________________________________________________________________________________
Date: __________________________ Your Signature: _______________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Date of Exchange Amount of Decrease in Amount of increase in Principal amount of Signature of
Principal Amount of Principal Amount of this Global Security authorized signatory
this Global Security this Global Security following such of Trustee or
decrease or increase Securities Custodian
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.13 (Change of Control) of the
Indenture, check the box:
Asset Sale [_] Change of Control [_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.10 or 4.13 of the Indenture, state the amount
($1,000 or an integral multiple thereof):
$
Date: ____________________________ Your Signature: _____________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
Supplemental Indenture (this "Supplemental Indenture"), dated as of
, between Guarantor (the "New Guarantor"), a subsidiary of Advance Stores
Company, Incorporated (the "Company"), and The Bank of New York, as trustee
under the indenture referred to below (the "Trustee"). Capitalized terms used
herein and not defined herein shall have the meaning ascribed to them in the
Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of October 31, 2001, providing for the
issuance of an aggregate principal amount of $200,000,000 of 10-1/4% Senior
Subordinated Notes due 2008 (the "Securities");
WHEREAS, Section 11.05 of the Indenture provides that under certain
circumstances the Company may cause, and Section 11.03 of the Indenture provides
that under certain circumstances the Company must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Securities pursuant to a Subsidiary Guarantee on
the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO SUBSIDIARY GUARANTEE. The New Guarantor hereby agrees,
jointly and severally with all other Guarantors, to guarantee the Company's
Obligations under the Securities and the Indenture on the terms and subject to
the conditions set forth in Article 11 of the Indenture and to be bound by all
other applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Securities, any Subsidiary Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Securities.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
2
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _____________________ [Name of New Guarantor],
By: ________________________________
Name:
Title:
Dated: _____________________ The Bank of New York, as Trustee,
By: ________________________________
Name:
Title:
EXHIBIT D
Form of
Transferee Letter of Representation
Advance Stores Company, Incorporated
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In care of
The Bank of New York
c/o United States Trust Company of New York
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Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 10-1/4% Senior Subordinated Notes due 2008 (the "Securities") of
Advance Stores Company, Incorporated (the "Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:________________________
Address:_____________________
Taxpayer ID Number:__________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement that has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act ("Rule 144A"), to a person we
reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB")
that is purchasing for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Securities
of $250,000, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:________________________,
by:_________________________________