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SPEEDWAY MOTORSPORTS, INC.
$325,000,000
8 1/2% SENIOR SUBORDINATED NOTES DUE 2007
INDENTURE
DATED AS OF MAY 11, 1999
U.S. BANK TRUST NATIONAL ASSOCIATION,
AS TRUSTEE
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
Section 1.01. Definitions......................................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act...............................................17
Section 1.03. Rules of Construction...........................................................................17
ARTICLE II. THE NOTES............................................................................................18
Section 2.01. Form and Dating.................................................................................18
Section 2.02. Execution and Authentication....................................................................19
Section 2.03. Registrar and Paying Agent......................................................................19
Section 2.04. Paying Agent to Hold Money in Trust.............................................................20
Section 2.05. Holder Lists....................................................................................20
Section 2.06. Transfer and Exchange...........................................................................20
Section 2.07. Replacement Notes...............................................................................33
Section 2.08. Outstanding Notes...............................................................................34
Section 2.09. Treasury Notes..................................................................................34
Section 2.10. Temporary Notes.................................................................................34
Section 2.11. Cancellation....................................................................................35
Section 2.12. Defaulted Interest..............................................................................35
ARTICLE III. REDEMPTION AND PREPAYMENT...........................................................................35
Section 3.01. Notices to Trustee..............................................................................35
Section 3.02. Selection of Notes to Be Redeemed...............................................................36
Section 3.03. Notice of Redemption............................................................................36
Section 3.04. Effect of Notice of Redemption..................................................................37
Section 3.05. Deposit of Redemption Price.....................................................................37
Section 3.06. Notes Redeemed in Part..........................................................................37
Section 3.07. Optional Redemption.............................................................................37
Section 3.08. Mandatory Redemption............................................................................38
ARTICLE IV. COVENANTS............................................................................................38
Section 4.01. Payment of Notes................................................................................38
Section 4.02. Maintenance of Office or Agency.................................................................38
Section 4.03. Reports.........................................................................................39
Section 4.04. Compliance Certificate..........................................................................40
Section 4.05. Taxes...........................................................................................40
Section 4.06. Stay, Extension and Usury Laws..................................................................40
Section 4.07. Restricted Payments.............................................................................41
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries..................................43
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock......................................44
Section 4.10. Asset Sales.....................................................................................45
Section 4.11. Transactions with Affiliates....................................................................49
Section 4.12. Liens...........................................................................................49
Section 4.13. Guarantees of Certain Indebtedness..............................................................50
i
Section 4.14. Corporate Existence.............................................................................50
Section 4.15. Offer to Repurchase Upon Change of Control......................................................50
Section 4.16. Limitation on Layering..........................................................................51
Section 4.17. Sale and Leaseback Transactions.................................................................51
Section 4.18. Limitation on Issuances and Sales of Capital Stock of Wholly Owned
Subsidiaries.............................................................................52
Section 4.19. Payments for Consent............................................................................52
Section 4.20. Future Guarantors...............................................................................52
Section 4.21. Investment Company Act..........................................................................53
ARTICLE V. SUCCESSORS............................................................................................53
Section 5.01. Merger, Consolidation or Sale of Assets.........................................................53
Section 5.02. Successor Corporation Substituted...............................................................53
ARTICLE VI. DEFAULTS AND REMEDIES................................................................................54
Section 6.01. Events of Default...............................................................................54
Section 6.02. Acceleration....................................................................................56
Section 6.03. Other Remedies..................................................................................56
Section 6.04. Waiver of Past Defaults.........................................................................57
Section 6.05. Control by Majority.............................................................................57
Section 6.06. Limitation on Suits.............................................................................57
Section 6.07. Rights of Holders of Notes to Receive Payment...................................................58
Section 6.08. Collection Suit by Trustee......................................................................58
Section 6.09. Trustee May File Proofs of Claim................................................................58
Section 6.10. Priorities......................................................................................59
Section 6.11. Undertaking for Costs...........................................................................59
Section 6.12. Restoration of Rights and Remedies..............................................................59
Section 6.13. Rights and Remedies Cumulative..................................................................60
Section 6.14. Delay or Omission Not Waiver....................................................................60
ARTICLE VII. TRUSTEE.............................................................................................60
Section 7.01. Duties of Trustee...............................................................................60
Section 7.02. Rights of Trustee...............................................................................61
Section 7.03. Individual Rights of Trustee....................................................................62
Section 7.04. Trustee's Disclaimer............................................................................62
Section 7.05. Notice of Defaults..............................................................................62
Section 7.06. Reports by Trustee to Holders of the Notes......................................................63
Section 7.07. Compensation and Indemnity......................................................................63
Section 7.08. Replacement of Trustee..........................................................................64
Section 7.09. Successor Trustee by Merger, etc................................................................65
Section 7.10. Eligibility; Disqualification...................................................................65
Section 7.11. Preferential Collection of Claims Against Company...............................................66
ARTICLE VIII. LEGAL DEFEASANCE AND COVENANT DEFEASANCE...........................................................66
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance........................................66
Section 8.02. Legal Defeasance and Discharge..................................................................66
Section 8.03. Covenant Defeasance.............................................................................66
Section 8.04. Conditions to Legal or Covenant Defeasance......................................................67
ii
Section 8.05. Deposited Money and Government Securities to be Held in Trust: Other
Miscellaneous Provisions.................................................................68
Section 8.06. Repayment to Company............................................................................69
Section 8.07. Reinstatement...................................................................................69
ARTICLE IX. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................................70
Section 9.01. Without Consent of Holders of Notes.............................................................70
Section 9.02. With Consent of Holders of Notes................................................................70
Section 9.03. Compliance with Trust Indenture Act.............................................................72
Section 9.04. Revocation and Effect of Consents...............................................................72
Section 9.05. Notation on or Exchange of Notes................................................................72
Section 9.06. Trustee to Sign Amendments, etc.................................................................73
ARTICLE X. SUBORDINATION.........................................................................................73
Section 10.01. Agreement to Subordinate.......................................................................73
Section 10.02. Liquidation; Dissolution; Bankruptcy...........................................................73
Section 10.03. Default on Designated Senior Indebtedness......................................................74
Section 10.04. Acceleration of Notes..........................................................................75
Section 10.05. When Distribution Must Be Paid Over............................................................75
Section 10.06. Notice by Company..............................................................................75
Section 10.07. Subrogation....................................................................................75
Section 10.08. Relative Rights................................................................................76
Section 10.09. Subordination May Not Be Impaired by Company...................................................76
Section 10.10. Distribution or Notice to Representative.......................................................76
Section 10.11. Rights of Trustee and Paying Agent.............................................................76
Section 10.12. Authorization to Effect Subordination..........................................................77
Section 10.13. Amendments.....................................................................................77
ARTICLE XI. SUBSIDIARY GUARANTEES................................................................................77
Section 11.01. Subsidiary Guarantees..........................................................................77
Section 11.02. Execution and Delivery of Subsidiary Guarantee.................................................78
Section 11.03. Guarantors May Consolidate or Merger on Certain Terms..........................................79
Section 11.04. Releases of Subsidiary Guarantees..............................................................79
Section 11.05. Trustee to Include Paying Agent................................................................80
Section 11.06. Subordination of Subsidiary Guarantees.........................................................80
Section 11.07. Unrestricted Subsidiary........................................................................81
Section 11.08. Limits on Subsidiary Guarantees................................................................81
ARTICLE XII. MISCELLANEOUS.......................................................................................81
Section 12.01. Trust Indenture Act Controls...................................................................81
Section 12.02. Notices........................................................................................82
Section 12.03. Communication by Holders of Notes with Other Holders of Notes..................................83
Section 12.04. Certificate and Opinion as to Conditions Precedent.............................................83
Section 12.05. Statements Required in Certificate or Opinion..................................................83
Section 12.06. Rules by Trustee and Agents....................................................................83
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.......................84
Section 12.08. Governing Law..................................................................................84
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Section 12.09. No Adverse Interpretation of Other Agreements..................................................84
Section 12.10. Successors.....................................................................................84
Section 12.11. Severability...................................................................................84
Section 12.12. Counterpart Originals..........................................................................84
Section 12.13. Table of Contents, Headings, etc...............................................................84
Section 12.14. Further Instruments and Acts...................................................................85
LIST OF EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM Of CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
iv
CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended, and
the Indenture, dated as of May 11, 1999.
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
----------- -------
ss.310(a)(l) ............................................................................. 7.10
(a)(2) ............................................................................. 7.10
(a)(3) ............................................................................. N.A.
(a)(4) ............................................................................. N.A.
(a)(5) ............................................................................. 7.10
(b) ............................................................................. 7.08; 7.10
(c) ............................................................................. N.A.
ss.311(a) ............................................................................. 7.11
(b) ............................................................................. 7.11
(c) ............................................................................. N.A.
ss.312(a) ............................................................................. 2.05
(b) ............................................................................. 12.03
(c) ............................................................................. 12.03
ss.313(a) ............................................................................. 7.06
(b) ............................................................................. 7.06
(c) ............................................................................. 7.06
(d) ............................................................................. 7.06
ss.314(a) ............................................................................. 4.03
(b) ............................................................................. N.A.
(c)(1) ............................................................................. 12.04
(c)(2) ............................................................................. 12.04
(c)(3) ............................................................................. N.A.
(d) ............................................................................. N.A.
(e) ............................................................................. 12.05
(f) ............................................................................. 12.14
ss.315(a) ............................................................................. 7.01(b)
(b) ............................................................................. 7.05
(c) ............................................................................. 7.01(a)
(d) ............................................................................. 7.01(c)
(e) ............................................................................. 6.11
ss.316(a) ............................................................................. 2.08
(a)(1)(A) ............................................................................. 6.05
(a)(1)(B) ............................................................................. 6.04
(a)(2) ............................................................................. N.A.
(b) ............................................................................. 6.07
(c) ............................................................................. N.A.
ss.317(a)(1) ............................................................................. 6.03; 6.08
(a)(2) ............................................................................. 6.09
(b) ............................................................................. 2.04
ss.318(a) ............................................................................. 12.01
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
INDENTURE
THIS INDENTURE is dated as of May 11, 1999 (this "Indenture"), by and
among SPEEDWAY MOTORSPORTS, INC., a Delaware corporation (the "Company"), the
corporations listed on the signature pages hereto (each, a "Guarantor" and
collectively, the "Guarantors") and U.S. BANK TRUST NATIONAL ASSOCIATION, as
trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation and issue of its 8 1/2%
Senior Subordinated Notes Due 2007 (the "Initial Notes") of substantially the
tenor and amount hereinafter set forth, and to provide therefor and for, if and
when issued in exchange for the Initial Notes pursuant to this Indenture and the
Registration Rights Agreement (as defined herein), the Company's 8 1/2% Senior
Subordinated Notes Due 2007 (the "Exchange Notes," and together with the Initial
Notes, the "Notes"), the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company and this Indenture a valid
instrument of the Company, in accordance with their respective terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means, with respect to any specified Person,
(i) 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 that 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, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person, and in either case for purposes of this Indenture, shall be deemed to be
Incurred by such specified Person at the time such other Person is merged with
or into or becomes a Subsidiary of
such specified Person, or at the time such asset is acquired by such specified
Person, as the case may be.
"Additional Notes" means up to $200.0 million in aggregate principal
amount of additional Notes having identical terms and conditions to the Notes
initially issued hereunder that may be issued, subject to the restrictions
contained in the Credit Agreement and under Section 4.09 hereof. For purposes of
this Indenture, any Additional Notes shall be part of the same issue of Notes
initially issued hereunder, and the Holders of any such Additional Notes shall
vote on all matters with the Holders of the Notes initially issued hereunder.
"Affiliate" of any specified Person means (i) any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any other Person who is a director or
executive officer of (a) such specified Person or (b) any Person described in
the preceding clause (i). 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.
"Affiliate Transaction" has the meaning set forth in Section 4.11
hereof.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets (including, without limitation, by way of (x) a sale and
leaseback, (y) the sale or other transfer of Equity Interests in or assets of
the Company's Unrestricted Subsidiary or (z) a Like Kind Exchange) other than
sales of inventory in the ordinary course of business consistent with past
practices; PROVIDED, that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company, its Subsidiaries and the
Unrestricted Subsidiary taken as a whole will be governed by Section 4.15 and/or
Sections 5.01 and 5.02 hereof and shall not be deemed to be an "Asset Sale," and
(ii) the issue or sale by the Company or any of its Subsidiaries of Equity
Interests of any of the Company's Subsidiaries, in the case of either clause (i)
or (ii), whether in a single transaction or a series of related transactions (a)
that have a fair market value in excess of $500,000 or (b) for net proceeds in
excess of $500,000. Notwithstanding the foregoing: (i) a transfer of assets by
the Company to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the
Company or to another Wholly Owned Subsidiary, (ii) an issuance of Equity
Interests by a Wholly Owned Subsidiary to the Company or to another Wholly Owned
Subsidiary, and (iii) a Restricted Payment that is permitted by Section 4.07
hereof will not be deemed to be an "Asset Sale."
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"Asset Sale Offer" has the meaning set forth in Section 4.10 hereof.
"Attributable Indebtedness" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors as now or hereinafter constituted.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of such Board of
Directors.
"Broker Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination 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
stock, (ii) in the case of an association or business entity, any and all
shares, interest, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
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) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and Eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the 1997
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500 million and a ▇▇▇▇▇ Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Cedel" means Cedel Bank, S.A.
3
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of (A) the Company and its Subsidiaries taken as
a whole to any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act) other than O. ▇▇▇▇▇▇ ▇▇▇▇▇ or his Related Parties or Sonic
Financial Corporation or any of their respective Affiliates or (B) Sonic
Financial Corporation to any "person" (as defined above) other than O. ▇▇▇▇▇▇
▇▇▇▇▇ or his Related Parties or any of their respective Affiliates, (ii) the
adoption of a plan relating to the liquidation or dissolution of the Company or
Sonic Financial Corporation, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that (A) any "person" (as defined above), other than O. ▇▇▇▇▇▇ ▇▇▇▇▇ or his
Related Parties or Sonic Financial Corporation or any of their respective
Affiliates, 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 more
than 50% of the Voting Stock of the Company or (B) any "person" (as defined
above), other than O. ▇▇▇▇▇▇ ▇▇▇▇▇ or his Related Parties or any of their
respective Affiliates, becomes the beneficial owner, directly or indirectly, of
more than 50% of the Voting Stock of Sonic Financial Corporation, (iv) the first
day on which a majority of the members of the Board of Directors of the Company
or Sonic Financial Corporation are not Continuing Directors or (v) a Repurchase
Event occurs under the Convertible Note Indenture.
"Change of Control Offer" has the meaning set forth in Section 4.15
hereof.
"Change of Control Payment" has the meaning set forth in Section 4.15
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
4.15 hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Company" means Speedway Motorsports, Inc., a Delaware corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
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), plus (ii) provision for taxes based on income or
profits of such Person and its 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 Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of 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,
imputed interest with respect to Attributable Indebtedness, 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
4
deducted in computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of 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 a prepaid cash expense 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 charges were deducted in
computing such Consolidated Net Income minus (v) non-cash items of such Person
and its Subsidiaries increasing 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 on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Subsidiary of the referent 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 Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
such Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.
"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
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 Wholly Owned Subsidiary thereof, (ii) the Net
Income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that 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
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, the Unrestricted Subsidiary, to the
extent otherwise included, shall be excluded, until distributed in cash to the
Company or one of its Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-
5
ups of tangible assets of a going concern business made within 12 months after
the acquisition of such business) subsequent to the date of this Indenture in
the book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, with respect to any Person as of any date
of determination, any member of the Board of Directors of such Person who (i)
was a member of such Board of Directors on the date of this Indenture 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 members of such
Board of Directors at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Convertible Note Indenture" means that certain Indenture dated as of
September 1, 1996, between the Company and First Union National Bank of North
Carolina, as trustee, governing the Company's 5 3/4% Convertible Subordinated
Debentures Due 2003.
"Covenant Defeasance" has the meaning set forth in Section 8.03 hereof.
"Credit Agreement" means that certain Credit Agreement dated as of
August 4, 1997, by and among the Company, as borrower, and the lenders named
therein, including NationsBank, N.A., as agent for the lenders and a lender, and
First Union National Bank, as co-agent, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, extended,
replaced or refinanced from time to time.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequester or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice, or both, would be an Event of Default.
"Definitive Note" means a Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06 hereof, substantially in the
form of the Notes attached hereto as Exhibit A and that does not include the
information called for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
6
"Designated Senior Indebtedness" means (i) so long as Senior
Indebtedness is outstanding under the Credit Agreement, all Senior Indebtedness
outstanding under the Credit Agreement and (ii) thereafter, any other Senior
Indebtedness permitted under this Indenture the principal amount of which is
$25.0 million or more and that has been designated by the Company as "Designated
Senior Indebtedness."
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"DTC" has the meaning set forth in Section 2.03 hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Default" has the meaning set forth in Section 6.01 hereof.
"Excess Proceeds" has the meaning set forth in Section 4.10(b) hereof.
"Exchange Notes" has the meaning set forth in the Recitals.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Notes for
Initial Notes.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (i) the consolidated interest expense of such Person and its Subsidiaries
for such period, whether paid or accrued (including, without limitation,
amortization of 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, imputed interest with
respect to Attributable Indebtedness, 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
7
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one of
its Subsidiaries (whether or not such guarantee or Lien is called upon) and (iv)
the product of (a) all cash dividend payments (and non-cash dividend payments in
the case of a Person that is a Subsidiary) on any series of preferred stock of
such Person, 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 for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues 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 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 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 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 (ii) the
Consolidated Cash Flow 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 (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 are in effect on the date of this Indenture.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 3 to the form of
the Note attached hereto as Exhibit A.
8
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means: (i) securities that are (a) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof; and (ii) depositary receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any Government Security which is specified in clause (i) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal or interest on any Government Security
which is so specified and held; PROVIDED, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the Government Security or the specific payment of principal or
interest of the Government Security evidenced by such depositary receipt.
"Guarantee" or "guarantee" (unless the context requires otherwise)
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. The term
"guarantee" used as a verb shall have a correlative meaning.
"Guarantor" means (i) each of the Company's Subsidiaries which becomes
a guarantor of the Notes pursuant to Article XI and (ii) each of the Company's
Subsidiaries executing a supplemental indenture in which such Subsidiary agrees
to be bound by the terms of this Indenture; PROVIDED, that any Person
constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Subsidiary Guarantee is released in accordance
with the terms hereof.
"Guarantor Senior Indebtedness" means, with respect to any Guarantor,
(i) the guarantee of such Guarantor of the Company's Obligations under the
Credit Agreement and (ii) any other Indebtedness permitted to be incurred by
such Guarantor 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 Guarantee of such Guarantor.
Notwithstanding anything to the contrary in the foregoing, Guarantor Senior
Indebtedness will not include (u) any Indebtedness of such Guarantor
representing a guarantee of Indebtedness of the Company or any other Guarantor
which is subordinate or junior to, or PARI PASSU with, the Notes or the
Subsidiary Guarantee of such other Guarantor, as the case may be, (v) any
Indebtedness that is expressly subordinate or junior in right of payment to any
other Indebtedness of such Guarantor, (w) any liability for federal, state,
local or other taxes owed or owing by such Guarantor, (x) any Indebtedness of
such Guarantor to any of its Subsidiaries or other Affiliates, (y) any trade
payables or (z) that portion of any Indebtedness that is incurred in violation
of this Indenture.
9
"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 and the value of foreign currencies purchased by the Company
or any of its Subsidiaries in the ordinary course of business.
"Holder" means a Person in whose name one of the Notes is registered.
"IA1 Global Note" mean the global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors."
"incur" has the meaning set forth in Section 4.09 hereof.
"Indebtedness" means, with respect to any Person, any indebtedness 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.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent" means, with respect to the Company and its Subsidiaries,
any person who (i) is in fact independent, (ii) does not directly or indirectly
have any material financial interest in the Company or any of its Subsidiaries,
or in any Affiliate of the Company or any of its Subsidiaries (other than as a
result of holding securities of the Company) and (iii) is not an officer,
employee, promoter, underwriter, trustee, partner or person performing similar
functions for the Company or any of its Subsidiaries.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" has the meaning set forth in the Recitals.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
10
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel 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;
PROVIDED, that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment.
"Legal Defeasance" has the meaning set forth in Section 8.02 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York 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 may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"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, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Like Kind Exchange" means the exchange pursuant to Section 1031 of the
Code of (i) any real property (other than any speedway that is owned on or
acquired after the date of this Indenture by the Company or any Subsidiary) used
or to be used in connection with the business of the Company or (ii) any other
real property to be used in connection with the business of the Company.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"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
disposition of any securities by such Person or any of its Subsidiaries or 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).
11
"Net Proceeds" means the aggregate cash proceeds (or in the case of any
Asset Sale involving the Unrestricted Subsidiary, the amount of such aggregate
cash proceeds that equals the aggregate amount of all Restricted Investments in
the Unrestricted Subsidiary that have not been repaid prior to the date of such
Asset Sale) received by the Company or any of its 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), 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), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP. Notwithstanding the foregoing, in the event the Company or any of its
Subsidiaries engages in a Like Kind Exchange, Net Proceeds shall not include any
cash proceeds with respect to such Like Kind Exchange that are reinvested in or
used to purchase pursuant to Section 1031 of the Code like kind real property
used or to be used in the business of the Company.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against the Unrestricted Subsidiary) would permit (upon
notice or lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note" or "Notes" have the meaning set forth in the Recitals.
"Note Custodian" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"Obligations" means any principal, interest, premium, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer Amount" has the meaning set forth in Section 4.10(c) hereof.
"Offer Period" has the meaning set forth in Section 4.10(c) hereof.
"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.
12
"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 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear and Cedel).
"Paying Agent" has the meaning set forth in Section 2.03 hereof.
"Payment Blockage Notice" has the meaning set forth in Section 10.03
hereof.
"Permitted Investments" means: (i) any Investment in the Company or in
a Wholly Owned Subsidiary of the Company; (ii) any Investment in Cash
Equivalents; (iii) any Investment by the Company or any Subsidiary of the
Company in a Person, if as a result of such Investment (y) such Person becomes a
Wholly Owned Subsidiary of the Company or (z) 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 Wholly Owned
Subsidiary of the Company; and (iv) 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 hereof.
"Permitted Liens" means: (i) Liens on assets of the Company securing
Senior Indebtedness and Liens on assets of a Guarantor securing Guarantor Senior
Indebtedness of such Guarantor; PROVIDED, that such Senior Indebtedness or
Guarantor Senior Indebtedness, as the case may be, was permitted by the terms of
this Indenture to be incurred; (ii) Liens in favor of the Company; (iii) Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company, PROVIDED that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (iv) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the Company,
PROVIDED that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens relating to judgments to
the extent permitted under this Indenture; and (vii) Liens existing on the date
of this Indenture.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; PROVIDED, that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if
13
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date no earlier 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, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of Notes 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 Subsidiary which is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or agency or any political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Purchase Date" has the meaning set forth in Section 4.10(c) hereof.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registrar" has the meaning set forth in Section 2.03 hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of May 11, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regulations S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation 903 of Regulation S.
"Related Parties" means, when used with respect to any individual: the
spouse, lineal descendants, parents and siblings of any such individual; the
estates, heirs, legatees and legal representatives of any such individual and
any of the foregoing; and all trusts established by any such individual and any
of the foregoing for estate planning purposes of which any such individual and
any of the foregoing are the sole beneficiaries or grantors.
14
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
"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 or employee to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Payments" has the meaning set forth in Section 4.07 hereof.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means (i) Indebtedness under the Credit Agreement
(including interest in respect thereof accruing after the commencement of any
bankruptcy or similar proceeding to the extent that such interest is allowable
as a bankruptcy claim in such proceeding) and (ii) any other Indebtedness
permitted to be incurred by the Company 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
Notes. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include (v) any Indebtedness that is expressly subordinate
or junior in right of payment to any other Indebtedness of the Company, (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 Subsidiaries, the Unrestricted
Subsidiary or other Affiliates, (y) any trade payables or (z) that portion of
Indebtedness that is incurred in violation of this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
15
"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 Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any payment of interest on or
principal of any Indebtedness, the date on which such payment was scheduled to
be made in the documentation governing such Indebtedness without regard to the
occurrence of any subsequent event or contingency.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership of which (a) the sole general partner or the
managing general partner is such Person or a Subsidiary of such Person or (b)
the only general partners are such Person or of one or more Subsidiaries of such
Person (or any combination thereof). Notwithstanding the foregoing, the
Unrestricted Subsidiary shall not, while designated as an unrestricted
subsidiary under Section 11.07 hereof, be a Subsidiary of the Company for any
purposes of this Indenture.
"Subsidiary Guarantee" means, individually and collectively, the
guarantees given by the Guarantors pursuant to Article XI hereof, including a
notation in the Notes substantially in the form included in Exhibit A.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06(g) hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means Oil-Chem Research Corp. and its
Subsidiaries taken as a whole.
16
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" means, with respect to any Person as of any date, 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 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 Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Notwithstanding the foregoing, the Unrestricted Subsidiary shall not, while
designated as an unrestricted subsidiary under Section 11.07 hereof, be included
in the definition of Wholly Owned Subsidiary for any purposes of this Indenture.
SECTION 1.02. 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:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be Qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor upon
the Notes or any Guarantor.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
17
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
and
(f) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE II.
THE NOTES
SECTION 2.01. FORM AND DATING.
-----------------
(a) General. The Notes and the certificate of authentication of
the Trustee thereon shall be substantially in the form included in Exhibit A
hereto, which is incorporated in and expressly made a part of this Indenture.
The Subsidiary Guarantees shall be substantially in the form of Exhibit E
hereto, the terms of which are incorporated in and made part of this Indenture.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 3 thereto). Notes issued in certificated form
shall be substantially in the form of Exhibit A attached hereto (but without
including the text referred to in footnotes 1 and 3 thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon and that the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of
18
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in Global Notes that are held by Participants through
Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
------------------------------
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers ("Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Sections 2.07 and 9.01(f) hereof. The Trustee may appoint
an authenticating agent acceptable to the Company to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
----------------------------
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
19
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
-------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company or any Guarantor in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money received from the
Company or a Subsidiary. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company or a Guarantor, the Trustee shall serve as
Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
--------------
(a) 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 all Holders and shall otherwise comply with TIA
ss. 312(a). If the Trustee is not the Registrar, the Company shall, or
shall cause the Registrar to, furnish to the Trustee at least seven
Business Days before each interest payment date, and at such other
times as the Trustee may request in writing, a list in such form and as
of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company and the Guarantors
shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
-----------------------
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of
the Depositary, by a nominee of the Depositary to the Depositary or to
another nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes will be exchanged by the Company for
Definitive Notes if (i) the Company delivers to the Trustee notice from
the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary or (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such
effect to the Trustee. Upon the occurrence of either of the preceding
events in (i) or (ii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in
Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered
in exchange for, or in lieu of, a Global Note or any portion
20
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other
than as provided in this Section 2.06(a), however, beneficial interests
in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the
Global Notes shall be effected through the Depositary, in accordance
with the provisions of this Indenture and the Applicable Procedures.
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more
of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same
Global Note. Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend. Beneficial interests in
any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note. No written orders or instructions
shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers
and exchanges of beneficial interests that are not subject to
Section 2.06(b)(i) above, the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B)
(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive
Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the
21
Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests
in Global Notes contained in this Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who
takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with
the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in
the form of a beneficial interest in the 144A Global
Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in
the form of a beneficial interest in the Regulation S
Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in
the form of a beneficial interest in the IAI Global
Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in
a Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
22
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note
proposes to exchange such beneficial
interest for a beneficial interest in an
Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note
proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of a beneficial interest
in an Unrestricted Global Note, a
certificate from such holder in the form of
Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes
to Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Restricted Definitive Note,
then, upon receipt by the Registrar of the following
documentation:
23
(A) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor
in reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof,
if applicable;
(F) such beneficial interest is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange
24
for a beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes
to Unrestricted Definitive Notes. A holder of a beneficial
interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note
proposes to exchange such beneficial
interest for a Definitive Note that does not
bear the Private Placement Legend, a
certificate from such holder in the form of
Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note
proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of a Definitive Note
that does not bear the Private Placement
Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
25
(iii) Beneficial Interests in Unrestricted Global
Notes to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iii) shall be registered in
such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a
Restricted Definitive Note proposes to exchange such Note for
a beneficial interest in a Restricted Global Note or to
transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in
a Restricted Global Note, then, upon receipt by the Registrar
of the following documentation:
(A) the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note, a certificate
from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is
being transferred to a QIB in accordance with Rule
144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is
being transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
26
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is
being transferred to an Institutional Accredited
Investor in reliance on an exemption from the
registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is
being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such Restricted Definitive Note is
being transferred pursuant to an effective
registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note,
and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a
Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
27
(1) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted
Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including
the certifications in item (1)(c) thereof;
or
(2) if the Holder of such Definitive
Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in
the form of a beneficial interest in the
Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an
Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar
shall register the transfer or exchange of Definitive Notes. Prior to
such registration of transfer or exchange, the requesting Holder shall
present or surrender to the Registrar the Definitive Notes duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the
28
requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the
following provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted
Definitive Notes. Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note
if the Registrar receives the following:
(A) if the transfer will be made pursuant to
Rule 144A under the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor must
deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to
any other exemption from the registration
requirements of the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive
Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
29
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such
Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of
Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery
thereof in the form of an Unrestricted
Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto,
including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests, an Opinion of
Counsel in form reasonably acceptable to the Company
to the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes
may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt
of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global
Notes tendered for acceptance by Persons that certify in the applicable
Letters of Transmittal that (x) they are not broker-dealers, (y) they
are not participating in a distribution of the Exchange Notes and (z)
they are not affiliates (as defined in Rule 144) of the Company, and
accepted for exchange in the Exchange Offer and (ii) Definitive Notes
in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange
Offer. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted
Global Notes to be reduced accordingly, and the Company shall execute
and the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of
this Indenture.
(i) Private Placement Legend.
30
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and
all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form :
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
BY THE INITIAL PURCHASERS TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A UNDER THE SECURITIES ACT, OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
APPLICABLE) OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), TO THE
COMPANY OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND BY SUBSEQUENT INVESTORS, AS SET FORTH IN
THROUGH ABOVE AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE
31
EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY."
(B) Notwithstanding the foregoing, any
Global Note or Definitive Note issued pursuant to
subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear
a legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the
Trustee in accordance with Section 2.11 hereof. At any time prior to
such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased
accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect
such increase.
(i) General Provisions Relating to Transfers and Exchanges.
-----------------------------------------------------------
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Global Notes and Definitive Notes upon the
Company's order or at the Registrar's request.
32
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.11, 3.07, 3.08, 4.10, 4.15, 9.03 and
9.05 hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
(iv) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes
or Definitive Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to issue,
to register the transfer of or to exchange any Notes during a
period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part or
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Company
may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose
of receiving payment of principal of and interest on such
Notes and for all other purposes, and none of the Trustee, any
Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section
2.02 hereof.
(viii) All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant
to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT NOTES.
-------------------
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers of the
33
Company, shall authenticate a replacement Note if the Trustee's requirements are
met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
-------------------
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, such Note ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, the Note ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
----------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes 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, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned shall
be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
----------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may
34
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
--------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee (and no one else) shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
--------------------
If the Company defaults in a payment of interest on the Notes, the
Company shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof, and such defaulted interest
shall cease to be payable to the Persons who were Holders on the relevant
regular record date. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; PROVIDED, that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE III.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
--------------------
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, the Company shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
35
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
-----------------------------------
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or integral multiples thereof;
PROVIDED, that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
----------------------
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
36
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
--------------------------------
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05.DEPOSIT OF REDEMPTION PRICE.
----------------------------
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company 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, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note 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, from the redemption date until
such principal 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 Notes and in
Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
------------------------
Upon surrender of a Note 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 Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
---------------------
(a) The Company shall not have the option to redeem the Notes
pursuant to this Section 3.07 prior to August 15, 2002. Thereafter, the
Company shall have the
37
option to redeem the Notes, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the applicable redemption date, if redeemed during the 12-month
period beginning on August 15 of the years indicated below:
YEAR PERCENTAGE
----- --------
2002....................................................... 104.250%
2003....................................................... 102.830%
2004....................................................... 101.420%
2005 and thereafter ....................................... 100.000%
(b) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
---------------------
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
ARTICLE IV.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
------------------
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. 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 Rights Agreement.
The Company shall pay interest (including 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 Notes to the
extent lawful. The Company shall pay interest (including 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, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and
38
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company also from time to time may designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and from time to time may 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 2.03.
SECTION 4.03. REPORTS.
--------
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall
furnish to the Trustee and to all Holders within 15 days after it is or
would have been required to file such with the SEC (i) all quarterly
and annual financial information that would be required to be contained
in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by the
Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the SEC, at any time after
the Company files a registration statement with respect to the Exchange
Offer or a Shelf Registration Statement (as defined in the Registration
Rights Agreement), the Company shall file a copy of all such
information and reports with the SEC for public availability (unless
the SEC will not accept such filing) and shall promptly make such
information available to all securities analysts and prospective
investors who request it in writing. The Company and the Guarantors
shall at all times comply with TIA ss. 314(a). Notwithstanding anything
to the contrary set forth in this Section 4.03, the Trustee shall have
no duty to review the reports required to be provided by this Section
4.03 for purposes of determining compliance with any provisions of this
Indenture.
(b) For so long as any Notes remain outstanding, the Company
and the Guarantors shall furnish to all Holders and prospective
purchasers of the Notes designated by the Holders of Notes, promptly
upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
39
SECTION 4.04. COMPLIANCE CERTIFICATE.
-----------------------
(a) The Company shall deliver to the Trustee, within 90 days
after the end 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 has been made under the supervision of
the signing Officers with a view to determining whether the Company has
kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company 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 or interest, if any, on the
Notes 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.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 4.03(a) above shall be accompanied by a written statement of
the Company's independent public accountants (who shall be a firm of
established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has
come to their attention that would lead them to believe that the
Company has violated any provisions of Article IV or Article V hereof
or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon the Company or 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.
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 or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
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
40
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.
-------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Equity Interests of the Company or any
of its Subsidiaries (including, without limitation, any payment in connection
with any merger or consolidation involving the Company or any of its
Subsidiaries) or to the direct or indirect holders of the Equity Interests of
the Company or any of its Subsidiaries in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company, dividends or distributions payable to the Company or any
Subsidiary of the Company or dividends or distributions made by a Subsidiary of
the Company to all holders of its Common Stock on a PRO RATA basis); (ii)
purchase, redeem or otherwise acquire or retire for value any Equity Interests
of the Company, any Subsidiary of the Company, the Unrestricted Subsidiary or
any direct or indirect parent of the Company (other than any such Equity
Interests owned by the Company or any Subsidiary of the Company); (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes (other than
the Notes), except at Stated Maturity; 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 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 of this Indenture; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries
after the date of this Indenture (excluding Restricted Payments
permitted by clauses (v), (w) and (x) of the next succeeding
paragraph), is less than the sum of (i) 50% of the Consolidated Net
Income of the Company for the period (taken as one accounting period)
commencing April 1, 1997 to the end of the Company's most recently
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 and the
fair market value, as determined
41
in good faith by the Board of Directors of the Company, of marketable
securities received by the Company from the issue or sale since the
date of this Indenture of Equity Interests of the Company or of debt
securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or convertible debt securities)
sold to a Subsidiary of the Company or the Unrestricted Subsidiary and
other than Disqualified Stock or debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial
amount of such Restricted Investment, plus (iv) the amount resulting
from designation of the Unrestricted Subsidiary as a Subsidiary or the
Unrestricted Subsidiary ceasing to be an unrestricted subsidiary for
purposes of this Indenture (such amount to be valued as provided in the
second succeeding paragraph) not to exceed the amount of Investments
previously made by the Company or any Subsidiary in the Unrestricted
Subsidiary and which was, while the Unrestricted Subsidiary was treated
as an unrestricted subsidiary for purposes of this Indenture, treated
as a Restricted Payment under this Indenture.
The foregoing provisions will not prohibit: (u) 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; (v) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Company or
the Unrestricted Subsidiary) 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 or
other acquisition shall be excluded from clause (c) (ii) of the preceding
paragraph; (w) the defeasance, redemption or repurchase of PARI PASSU or
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness or the substantially concurrent sale (other
than to a Subsidiary of the Company or the Unrestricted Subsidiary) of Equity
Interests of the Company (other than Disqualified Stock); PROVIDED, that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause (c)
(ii) of the preceding paragraph; (x) the making of any Restricted Investments
after the date of this Indenture not exceeding in the aggregate $25.0 million;
and (y) the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of the Company or any Subsidiary of the Company held by
any member of the Company's (or any of its Subsidiaries') management pursuant to
any management equity subscription agreement or stock option agreement;
PROVIDED, that (A) the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $1.0 million in any
12-month period plus the aggregate cash proceeds received by the Company during
such 12-month period from any reissuance of Equity Interests by the Company to
members of management of the Company and its Subsidiaries, and (B) no Default or
Event of Default shall have occurred and be continuing immediately after such
transaction.
42
In connection with the designation of the Unrestricted Subsidiary as a
Subsidiary or the Unrestricted Subsidiary ceasing to be an unrestricted
subsidiary for purposes of this Indenture, all outstanding Investments
previously made by the Company or any Subsidiary in the Unrestricted Subsidiary
will be deemed to constitute Investments in an amount equal to the greater of
(x) the net book value of such Investments at the time of such designation or
the Unrestricted Subsidiary ceasing to be an unrestricted subsidiary for
purposes of this Indenture and (y) the fair market value of such Investments at
the time of such designation or the Unrestricted Subsidiary ceasing to be an
unrestricted subsidiary for purposes of this Indenture.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate delivered to the Trustee) on the
date of the Restricted Payment of the asset(s) proposed to be transferred by the
Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. 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 this Section 4.07 were computed, which calculations may
be based upon the Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
--------------------------------------------------------------
The Company will not, and will not permit any of its 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 Subsidiary to
(i)(a) pay dividends or make any other distributions to the Company or any of
its 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 Subsidiaries, (ii) make loans or
advances to the Company or any of its Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) applicable law,
(b) this Indenture, (c) the Credit Agreement as in effect on the date of this
Indenture (and thereafter only to the extent such encumbrances or restrictions
are no more restrictive than those in effect under the Credit Agreement as in
effect on the date of this Indenture), (d) Existing Indebtedness, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred 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, (f) customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (g) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (iii) above on the property so acquired, or (h)
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.
43
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
-----------------------------------------------------------
The Company will not, and will not permit any of its 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 Indebtedness) and
that the Company will not issue any Disqualified Stock and will not permit any
of its Subsidiaries to issue any shares of preferred stock; PROVIDED, HOWEVER,
that (x) the Company may incur Indebtedness (including Acquired Indebtedness) or
issue shares of Disqualified Stock and (y) a Guarantor may incur Acquired
Indebtedness, in each case if 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 prior to and including December 31, 1998 and 2.25 to 1.0 after
January 1, 1999, 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, as the case may
be, at the beginning of such four-quarter period.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness
under the Credit Agreement (and guarantees thereof by the
Guarantors) in an aggregate principal amount at any time
outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of
the Company and its Subsidiaries thereunder) not to exceed
$175.0 million less the aggregate amount of all Net Proceeds
of Asset Sales applied to permanently reduce the commitments
with respect to such Indebtedness pursuant to Section 4.10
hereof;
(ii) the incurrence by the Company of Indebtedness
represented by the Notes, excluding any Additional Notes, and
the incurrence by the Guarantors of Indebtedness represented
by the Subsidiary Guarantees;
(iii) the incurrence by the Company or any of its
Subsidiaries of Indebtedness represented by Capital Lease
Obligations (whether or not incurred pursuant to sale and
leaseback transactions), mortgage financings or purchase money
obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment
used in the business of the Company or such Subsidiary, in an
aggregate principal amount not to exceed $10.0 million at any
time outstanding;
(iv) the incurrence by the Company or any of its
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund, Existing
Indebtedness or Indebtedness that was permitted by this
Indenture to be incurred (other than any such Indebtedness
incurred pursuant to clause (i), (iii), (v), (vi), (vii),
(viii), (ix) or (x) of this paragraph);
44
(v) the incurrence by the Company or any of its
Wholly Owned Subsidiaries of intercompany Indebtedness between
or among the Company and any of its Wholly Owned Subsidiaries;
PROVIDED, HOWEVER, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate
to the payment in full of all Obligations with respect to the
Notes and (ii)(A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or 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 shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company
or such Subsidiary, as the case may be;
(vi) the incurrence by the Company of Hedging
Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to Indebtedness that
is permitted by the terms of this Indenture to be incurred;
(vii) the incurrence by the Company of Hedging
Obligations under currency exchange agreements; PROVIDED, that
such agreements were entered into in the ordinary course of
business;
(viii) the incurrence of Indebtedness of a Guarantor
represented by guarantees of Indebtedness of the Company that
has been incurred in accordance with the terms of this
Indenture;
(ix) Indebtedness for letters of credit relating to
workers' compensation claims and self-insurance or similar
requirements in the ordinary course of business; and
(x) the incurrence by the Company of Indebtedness (in
addition to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding not to exceed
$15.0 million.
SECTION 4.10. ASSET SALES.
------------
(a) The Company will not, and will not permit any of its
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or
the Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the fair market value (evidenced
by a resolution of the Board of Directors of the Company, set forth in
an Officers' Certificate delivered to the Trustee, or by an independent
appraisal by an accounting, appraisal or investment banking firm of
national standing) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration
therefor received by the Company or such Subsidiary is in the form of
cash or Cash Equivalents; PROVIDED, HOWEVER, that (x) clause (ii) of
this paragraph shall not apply to any Asset Sale involving the
Company's Unrestricted Subsidiary and (y) this paragraph shall not
apply to any Like Kind Exchange.
45
(b) Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, the Company may apply such Net Proceeds, at its option,
(i) to permanently reduce Senior Indebtedness (and correspondingly
reduce commitments with respect thereto in the case of any reduction of
borrowings under the Credit Agreement), (ii) to the acquisition of a
controlling interest in another business, the making of a capital
expenditure or the acquisition of other long-term assets, in each case,
in the same or a similar line of business as the Company was engaged in
on the date of this Indenture or (iii) to reimburse the Company or its
Subsidiaries for expenditures made, and costs incurred, to repair,
rebuild, replace or restore property subject to loss, damage or taking
to the extent that the Net Proceeds consist of insurance proceeds
received on account of such loss, damage or taking. Pending the final
application of any such Net Proceeds, the Company may temporarily
reduce Senior Indebtedness or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first
sentence of this clause (b) will be deemed to constitute "Excess
Proceeds." Within in five days of when the aggregate amount of Excess
Proceeds exceeds $5.0 million, the Company shall make an Asset Sale
Offer to purchase the maximum principal amount of Notes 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, if any, thereon to the date of
purchase, in accordance with the procedures set forth in this
Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate
purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes 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.
Notwithstanding the foregoing, the Company and its
Subsidiaries will be permitted to consummate one or more Asset Sales
with respect to assets or properties with an aggregate fair market
value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) not in excess of
$7.5 million with respect to all such Asset Sales made subsequent to
the date of this Indenture without complying with the provisions of
clause (a) of this Section 4.10 or of the immediately preceding
paragraph.
In the event of the transfer of substantially all (but not
all) of the property and assets of the Company as an entirety to a
Person in a transaction permitted under Section 5.01 hereof, the
successor corporation shall be deemed to have sold the properties and
assets of the Company not so transferred for purposes of this covenant
and shall comply with the provisions of this covenant with respect to
such deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or its
Subsidiaries deemed to be sold shall be deemed to be Net Proceeds for
purposes of this covenant.
46
If at any time any non-cash consideration received by the
Company in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash, then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder and the Net
Proceeds thereof shall be applied in accordance with this covenant.
(c) In the event that, pursuant to Section 4.10(b) hereof, the
Company shall be required to commence an offer to all Holders to
purchase Notes (an "Asset Sale Offer"), the Company shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 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 Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Notes required to be purchased pursuant to Section
4.10(b) hereof (the "Offer Amount") or, if less than the Offer Amount
has been tendered, all Notes tendered in response to the Asset Sale
Offer. Payment for any Notes 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 shall be paid to the
Person in whose name a Note is registered at the close of business on
such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of
the Holders, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender
Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be
made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made pursuant
to this Section 4.10 and the length of time the Asset Sale
Offer shall remain open;
(ii) the Offer Amount, the purchase price and the
Purchase Date;
(iii) that any Note not tendered or accepted for
payment shall continue to accrue interest;
(iv) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase
Date;
(v) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may only elect to have all of
such Note purchased and may not elect to have only a portion
of such Note purchased;
47
(vi) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to
surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depository,
if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the
Purchase Date;
(vii) that Holders shall be entitled to withdraw
their election if the Company, the depository or the Paying
Agent, as the case may be, receives, not later than 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 Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(viii) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a PRO RATA
basis (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(ix) that Holders whose Notes were purchased only in
part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a PRO RATA basis to the extent
necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, and shall deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of
this Section 4.10. The Company, the Depository or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from
the Company shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed
or delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 4.10, any
purchase pursuant to this Section 4.10 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
48
(d) The Company will comply with the requirements of Section
14(e) of, and Rule 14e-1, under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes
pursuant to an Asset Sale Offer.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
----------------------------
The Company will not, and will not permit any of its Subsidiaries to,
make any payment to, 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 contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person, (ii) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $2.5 million, the Company delivers to the Trustee a
resolution of the Board of Directors of the Company 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 of the Company or, if there are
no such disinterested directors, by a majority of the members of the Board of
Directors of the Company and (iii) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, the Company delivers to the Trustee an opinion as to
the fairness to the Holders of Notes of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing; PROVIDED, that (w) any issuance of securities, or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment arrangements, stock options and stock ownership
plans approved by the Board of Directors of the Company or the payment of fees
and indemnities of directors of the Company and its Subsidiaries in the ordinary
course of business and consistent with the past practices of the Company or such
Subsidiary, (x) loans or advances to employees in the ordinary course of
business, (y) transactions between or among the Company and/or its Wholly Owned
Subsidiaries and (z) Restricted Payments (other than Restricted Investments)
that are permitted by the provisions of Section 4.07 hereof, in each case, shall
not be deemed Affiliate Transactions.
SECTION 4.12. LIENS.
-------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens, unless all payments due under this Indenture
and the Notes are secured on an equal and ratable basis with the Indebtedness so
secured until such time as such Indebtedness is no longer secured by a Lien;
PROVIDED, that if such Indebtedness is by its terms expressly subordinated to
the Notes or any Subsidiary Guarantee, the Lien securing such Indebtedness shall
be subordinate and junior to the Lien
49
securing the Notes and the Subsidiary Guarantees with the same relative priority
as such subordinate or junior Indebtedness shall have with respect to the Notes
and the Subsidiary Guarantees.
SECTION 4.13. GUARANTEES OF CERTAIN INDEBTEDNESS.
----------------------------------
The Company will not permit any of its Subsidiaries that is not a
Guarantor to incur, guarantee or secure through the granting of Liens the
payment of any Senior Indebtedness, and the Company will not, and will not
permit any of its Subsidiaries to, pledge any intercompany notes representing
obligations of any of its Subsidiaries, to secure the payment of any Senior
Indebtedness, in each case unless such Subsidiary, the Company and the Trustee
execute and deliver a supplemental indenture to this Indenture evidencing such
Subsidiary's Subsidiary Guarantee (providing for the unconditional guarantee by
such Subsidiary, on a senior subordinated basis, of the Notes).
SECTION 4.14. CORPORATE EXISTENCE.
-------------------
Subject to Article V hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (a) 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 (b) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of 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 Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
------------------------------------------
(a) Upon the occurrence of a Change of Control, each Holder of
Notes 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 Notes 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 (the "Change of Control Payment")
to the date of purchase (the "Change of Control Payment Date"). Within
15 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 and offering to repurchase Notes
pursuant to the procedures required by this Indenture and described in
such notice. The Change of Control Payment Date shall be a Business Day
not less than 30 days nor more than 60 days after such notice is
mailed. 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
50
such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company will,
to the extent lawful, (i) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; PROVIDED, that
each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Prior to complying with the provisions of
this Section 4.15, but in any event within 90 days following a Change
of Control, the Company will either repay all outstanding Senior
Indebtedness or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Indebtedness to permit the
repurchase of Notes required by this Section 4.15. 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.
(c) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements of this Section 4.15 applicable to a
Change of Control Offer made by the Company and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.16. LIMITATION ON LAYERING.
----------------------
Notwithstanding the provisions of Section 4.09 hereof, (a) the Company
shall not incur any Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the Company and senior in any respect in right of
payment to the Notes, and (b) no Guarantor shall incur any Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of such Guarantor
and senior in any respect in right of payment to the Subsidiary Guarantee of
such Guarantor.
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS.
-------------------------------
The Company will not, and will not permit any of its Subsidiaries to,
enter into any sale and leaseback transaction; PROVIDED, that the Company or one
of its Subsidiaries may enter into a sale and leaseback transaction if (a) the
Company or such Subsidiary could have (i) incurred Indebtedness in an amount
equal to the Attributable Indebtedness relating to such sale and leaseback
transaction pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof and (ii) incurred a Lien to secure such
Indebtedness pursuant to
51
Section 4.12, (b) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors of the Company and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (c) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 4.10 hereof.
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
------------------------------------------------------------------
SUBSIDIARIES.
------------
The Company (a) will not, and will not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Subsidiary of the Company to any Person
(other than the Company or a Wholly Owned Subsidiary of the Company), unless (i)
such transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Wholly Owned Subsidiary and (ii) the cash Net Proceeds
from such transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.10 and (b) will not permit any Wholly Owned Subsidiary
of the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Subsidiary of the Company.
SECTION 4.19. PAYMENTS FOR CONSENT.
--------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.20. FUTURE GUARANTORS.
-----------------
The Company and each Guarantor shall cause each domestic Subsidiary of
the Company or such Guarantor, as the case may be, that, after the date of this
Indenture, becomes a Subsidiary to execute and deliver (a) an indenture
supplemental to this Indenture and thereby become a Guarantor that shall be
bound by the Subsidiary Guarantee of the Notes in the form set forth in this
Indenture (without such Guarantor being required to execute and deliver the
Subsidiary Guarantee endorsed on the Notes) 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 fraudulent
conveyance laws, creditors' rights and equitable principles as may be acceptable
to the Trustee in its discretion).
52
SECTION 4.21. INVESTMENT COMPANY ACT.
----------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
become an investment company subject to registration under the Investment
Company Act of 1940, as amended.
ARTICLE V.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
----------------------------------------
The Company may 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 corporation, Person or
entity unless: (i) the Company is the surviving corporation or the entity 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 organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or 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 Notes
and this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no Default
or Event of Default exists; and (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 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 (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, 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.
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, other than for purposes of
calculating Consolidated Net Income in connection with Section 4.07), and may
exercise every right and power of the Company under this Indenture with
53
the same effect as if such successor Person had been named as the Company
herein; PROVIDED, HOWEVER, that the predecessor Company shall not be relieved
from the obligation to pay the principal of and interest on the Notes except in
the case of a sale of all of the Company's assets that meets the requirements of
Section 5.01 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
-----------------
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Notes (whether
or not prohibited by the subordination provisions of this Indenture);
(b) default in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by Article X
of this Indenture);
(c) failure by the Company to comply with the provisions
described under Section 4.10 or 4.15;
(d) failure by the Company to comply with Section 4.07 or 4.09
hereof and the continuance of such failure for a period of 30 days
after notice is given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding;
(e) failure by the Company for 60 days after notice is given
to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding to comply with any of the Company's other covenants or
other agreements in this Indenture or the Notes;
(f) 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
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default
(i) is caused by a failure to pay principal of such Indebtedness at its
Stated Maturity (after the expiration of any applicable grace period)
or (ii) results in the acceleration of such Indebtedness prior to its
maturity and, in each case, the principal amount of which Indebtedness,
together with the principal amount of any other such Indebtedness
described in clauses (i) and (ii) above, aggregates $5.0 million or
more;
(g) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries and such judgment or
judgments remain undischarged for a period (during
54
which execution shall not be effectively stayed) of 60 days; PROVIDED,
that the aggregate of all such undischarged judgments exceeds $5.0
million (net of amounts covered by insurance);
(h) the Company or any of its Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a "Significant
Subsidiary" pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) generally is not paying its debts as they become
due;
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a Custodian of the Company or any of
its 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
Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a "Significant Subsidiary"; or
(iii) orders the liquidation of the Company or any of
its 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; or
(j) the Subsidiary Guarantee of any Guarantor is held in
judicial proceedings to be unenforceable or invalid or ceases for any
reason to be in full force and effect (other than in accordance with
the terms of this Indenture) or any Guarantor or any Person acting on
behalf of any Guarantor denies or disaffirms such Guarantor's
obligations under its Subsidiary Guarantee (other than by reason of a
release of such Guarantor from its Subsidiary Guarantee in accordance
with the terms of this Indenture).
55
SECTION 6.02. ACCELERATION.
-------------
If any Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately;
PROVIDED, HOWEVER, that if any Senior Indebtedness is outstanding under the
Credit Agreement, upon a declaration of acceleration, the Notes shall be payable
upon earlier of (a) the day which is five Business Days after the provision to
the Company and the agent under the Credit Agreement of written notice of such
declaration and (b) the date of acceleration of any Indebtedness under the
Credit Agreement. Notwithstanding the foregoing, if an Event of Default
specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the
Company, any Significant Subsidiary or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary, all outstanding Notes shall
be due and payable immediately without further action, notice or declaration on
the part of the Trustee or any Holder. The Holders of a majority in aggregate
principal amount of the then outstanding Notes by written notice to the Trustee
may on behalf of all of the Holders rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. If an
Event of Default occurs prior to August 15, 2002, by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
August 15, 2002, upon the acceleration of the Notes an additional premium shall
also become and be immediately due and payable to the extent permitted by law in
an amount, for each of the years beginning on August 15 of years, set forth
below:
YEAR PERCENTAGE
---- ----------
1999 108.500%
2000 107.080%
2001 105.670%
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, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
56
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
----------------------
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes 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 Notes (including in connection
with an offer to purchase); PROVIDED, HOWEVER, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
-------------------
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it; PROVIDED, HOWEVER, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture which the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
-------------------
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes 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
57
(e) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
---------------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (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 be absolute and unconditional and 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(a) or (b) 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 Guarantor for the
whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Notes 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 Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable 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 herein contained shall be
deemed to authorize the Trustee
58
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
----------
If the Trustee collects any money pursuant to this Article VI, 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 compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
THIRD: 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 Notes 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 does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES.
----------------------------------
If the Trustee or any Holder of Notes has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
59
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE.
------------------------------
Except as otherwise provided in Section 7.07 hereof, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER.
-----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article VI or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
ARTICLE VII.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
-------------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in its
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(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 and the
Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
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:
60
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(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), and (c) of this Section.
(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.
(g) The Trustee shall not be deemed to have knowledge of any
Default or Event of Default unless (i) the Trustee or a Responsible
Officer shall have actual knowledge of a Default or an Event of
Default, (ii) the Trustee or a Responsible Officer shall have received
notice of a Default or an Event of Default in accordance with the
provisions of this Indenture or (iii) a Default or an Event of Default
occurred or is occurring pursuant to Section 4.01 hereof.
SECTION 7.02. RIGHTS OF TRUSTEE.
-----------------
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.01(b), the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, the
Trustee 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. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon.
61
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture; PROVIDED,
that the Trustee's conduct does not constitute willful misconduct or
negligence.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company or Guarantor
shall be sufficient if signed by an Officer of the Company or such
Guarantor.
(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,
order, demand or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by
it in compliance with such request, order, demand or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
-----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee; PROVIDED, HOWEVER, in the event that the Trustee acquires any
conflicting interest, the Trustee must (a) eliminate such conflict within 90
days, (b) if a registration statement with respect to the Notes is effective,
apply to the SEC for permission to continue as Trustee or (c) resign as Trustee.
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 or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes 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 Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
------------------
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, 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 Notes.
62
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
--------------------------------------------
Within 60 days after May 15 of each year commencing with the year 2000,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders of the Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the 12 months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The Trustee
shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee 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 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 (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company 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 or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder (except to
the extent such failure prejudices the Company). The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel, and the Company shall pay the reasonable fees and expenses of
one such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
63
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) 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 ss. 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 Notes of a
majority in aggregate principal amount of the then outstanding Notes 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 Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in aggregate principal amount of the then
outstanding Notes 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 Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note 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 duties of the
64
Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee; PROVIDED, 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 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; PROVIDED, that such corporation shall be otherwise qualified and
eligible under this Article VII and under the TIA, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Notes shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes. In the event that any Notes shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Notes, in either its own name or that of its
predecessor Trustee, with the full force and effect which this Indenture
provides for the certificate of authentication of the Trustee.
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 that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus (with its affiliates) of
at least $50 million as set forth in its most recent published annual report of
condition.
If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. None
of the Company or any of its Affiliates shall serve as Trustee hereunder. If at
any time the Trustee shall cease to be eligible to serve as Trustee hereunder
pursuant to the provisions of this Section 7.10, it shall resign immediately in
the manner and with the effect specified in this Article VII.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
65
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
-------------------------------------------------
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII.
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 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall 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 Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on such Notes when such payments are due; (b) the Company's obligations with
respect to such Notes under Article II and Section 4.02 hereof; (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith; and (d) this Article VIII. Subject to
compliance with this Article VIII, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
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 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 Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18 and 4.20 hereof with respect to the
outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the
66
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 Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
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
Notes 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 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(g) 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 8.03 hereof to the outstanding Notes:
(a) the Company must irrevocably deposit or cause to be
deposited with the Trustee, in trust, for the benefit of the Holders,
cash in United States 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 of, premium and Liquidated Damages,
if any, and interest on the outstanding Notes on the Stated Maturity or
on the applicable redemption date, as the case may be, and the Company
must specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in
67
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 incurrence of Indebtedness all or a
portion of the proceeds of which will be used to defease the Notes
pursuant to this Article VIII concurrently with such incurrence) or
insofar as Sections 6.01(h) or 6.01(i) hereof is 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 after the 91st day following the deposit
or on the day after the last day of the applicable preference period
under Bankruptcy Law following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(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 over any other
creditors of the Company or any Subsidiary Guarantor with the intent of
defeating, hindering, delaying or defrauding any creditors of the
Company, any Guarantor 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 or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND 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 outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited
68
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 Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or noncallable 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 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,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payments 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 to the Company, 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 will 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 or
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 Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; PROVIDED, HOWEVER, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
69
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
-----------------------------------
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the
Subsidiary Guarantees or the Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's or
Guarantor's obligations to the Holders of the Notes in the case of a
merger or consolidation in accordance with this Indenture;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(f) to provide for the issuance of Additional Notes pursuant
to this Indenture to the extent permitted under the restrictions
contained in the Credit Agreement and described under Section 4.09
hereof.
Upon the request of the Company and the Guarantors accompanied by a
resolution of their respective Boards of Directors authorizing the execution of
any such amended or supplemental Indenture, and upon receipt by the Trustee of
the documents described in Section 7.02 hereof, the Trustee shall join with the
Company and 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 NOTES.
--------------------------------
Except as provided below in this Section 9.02, this Indenture
(including Sections 4.10 and 4.15 hereof), the Notes 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 Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if
70
any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange offer for the
Notes).
Upon the request of the Company and the Guarantors accompanied by a
resolution of their respective Boards of Directors authorizing the execution of
any such amended or supplemental Indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, 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 in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture. It shall not be necessary for the consent of the Holders
of Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Trustee and the Holders of Notes
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 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture, the Notes or the Subsidiary Guarantees.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to the
redemption or repurchase of the Notes (other than with respect to
Sections 4.10 and 4.15 hereof);
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
71
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, premium, if any, or interest on
the Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Section 4.10 or 4.15 hereof);
(h) release any Guarantor from any of its obligations under
its Subsidiary Guarantee or this Indenture, except in accordance with
the terms of this Indenture; or
(i) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
In addition, any amendment to the provisions of Article X of this
Indenture or the related definitions will require the consent of the Holders of
at least 75% in aggregate principal amount of the Notes then outstanding if such
amendment would adversely affect the rights of Holders of Notes.
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
-----------------------------------
Every amendment or supplement to this Indenture, the Subsidiary
Guarantees or the Notes 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 Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
---------------------------------
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
72
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
-------------------------------
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article IX if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
and each Subsidiary Guarantor may not sign an amendment or supplemental
Indenture until each of their respective Boards of Directors approves it. In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 7.01) 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.
ARTICLE X.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
-------------------------
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Note is subordinated in right of payment, to
the extent and in the manner provided in this Article X, to the prior payment in
full of all Senior Indebtedness (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 Indebtedness.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
-------------------------------------
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full of all Obligations due in respect of such
Senior Indebtedness (including, in the case of Senior Indebtedness
under the Credit Agreement, interest after the commencement of any such
proceeding at the rate specified in the Credit Agreement) before
Holders of Notes shall be entitled to receive any payment with respect
to the Notes (except that Holders may receive (i) Equity Interests or
debt securities that are subordinated to at least the same extent as
the Notes to (A) Senior Indebtedness and (B) any securities issued in
exchange for Senior Indebtedness and (ii) payments and other
distributions made from any defeasance trust created pursuant to
Section 8.01 hereof); and
(b) until all Obligations with respect to Senior Indebtedness
(as provided in subsection (a) above) are paid in full, any
distribution to which Holders would be entitled but for this Article X
shall be made to holders of Senior Indebtedness (except that Holders
may receive (i) Equity Interests or debt securities that are
subordinated to at least
73
the same extent as the Notes to (A) Senior Indebtedness and (B) any
securities issued in exchange for Senior Indebtedness and (ii) payments
and other distributions made from any defeasance trust created pursuant
to Section 8.01 hereof), as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
------------------------------------------
The Company may not make any payment or distribution to the Trustee or
any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than (i) Equity Interests or debt securities that are subordinated to at least
the same extent as the Notes to (A) Senior Indebtedness and (B) any securities
issued in exchange for Senior Indebtedness and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal and other Obligations with respect to the Senior
Indebtedness have been paid in full if:
(a) a default in the payment of any principal of or other
Obligations with respect to Designated Senior Indebtedness occurs and
is continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior
Indebtedness; or
(b) a default, other than a payment default under clause (a)
above, on Designated Senior Indebtedness occurs and is continuing that
then permits holders of the Designated Senior Indebtedness as to which
such default relates to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Representative with respect to such Designated Senior Debt. If the
Trustee receives any such Payment Blockage Notice, no subsequent
Payment Blockage Notice shall be effective for purposes of this Section
unless and until (i) at least 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (ii)
all scheduled payments of principal, premium, if any, and interest on
the Notes that have come due have been paid in full in cash. 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 waived for a period of not less than 90 days.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in clause (b) of the
preceding paragraph, 179 days pass after notice is received if the
maturity of such Designated Senior Indebtedness has not been
accelerated,
if this Article X otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
74
SECTION 10.04. ACCELERATION OF NOTES.
----------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
------------------------------------
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when the Trustee or such Holder,
as applicable, has actual knowledge that such payment is prohibited by Section
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 Indebtedness as their interests may appear or
their Representative under the indenture or other agreement (if any) pursuant to
which Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of all Obligations with respect to
Senior Indebtedness 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 Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article X, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
X, except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 10.06. NOTICE BY 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 Notes to violate this Article X, but failure to give such
notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article X.
SECTION 10.07. SUBROGATION.
-------------
After all Senior Indebtedness is paid in full and until the Notes are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness PARI PASSU with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Indebtedness. A distribution made under this Article X to
holders of Senior Indebtedness that otherwise would have been made to Holders is
not, as between the Company and Holders, a payment by the Company on the Notes.
75
SECTION 10.08. RELATIVE RIGHTS.
-----------------
This Article X defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders, the obligation
of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior
Indebtedness; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article X to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
----------------------------------------------
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
------------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, 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 X, the Trustee and the Holders 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 for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
X.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
------------------------------------
Notwithstanding the provisions of this Article X 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 or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
76
Corporate Trust Office at least five 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 Notes to violate this Article X. Only the Company, the
Representative of Designated Senior Indebtedness or a Representative may give
the notice. Nothing in this Article X 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
Indebtedness 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 Note 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 X, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. 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 to file such
claim, each of the Representative of Designated Senior Indebtedness and a
Representative, if any, are hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
-----------
The provisions of this Article X shall not be amended or modified
without the written consent of the holders of all Senior Indebtedness.
ARTICLE XI.
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEES.
----------------------
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and interest on the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors will be jointly and severally obligated to pay the same
immediately. The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of
77
the Notes 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 covenant that this
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or
Guarantors, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or 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 they shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all 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 VI 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 acceleration of such obligations as
provided in Article VI, 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 so long as the exercise of such right does not
impair the rights of the Holders under the Guarantee.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
------------------------------------------------
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit A shall be endorsed by an officer
of such Subsidiary Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture shall be executed on behalf of such Guarantor by
its President or one of its Vice Presidents and attested to by an Officer.
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 Note a notation of such Subsidiary Guarantee.
If an officer or Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
78
SECTION 11.03. GUARANTORS MAY CONSOLIDATE OR MERGER ON CERTAIN TERMS.
------------------------------------------------------
(a) Except as set forth in Articles IV and V, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or
shall prevent any sale or conveyance of the property of a Guarantor as
an entirety or substantially as an entirety, to the Company.
(b) Except as set forth in Article IV, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation
or merger of a Guarantor with or into a corporation or corporations
other than the Company (whether or not affiliated with the Guarantor),
or successive consolidations or mergers in which a Guarantor or its
successor or successors shall be a party or parties, or shall prevent
any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company
(whether or not affiliated with the Guarantor) authorized to acquire
and operate the same; PROVIDED, HOWEVER, that (i) each Guarantor hereby
covenants and agrees that, upon any such consolidation, merger, sale or
conveyance, the Subsidiary Guarantee endorsed on the Notes, and the due
and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by such Guarantor, shall
be expressly assumed (in the event that the Guarantor is not the
surviving corporation in the merger) by supplemental indenture
reasonably satisfactory in form to the Trustee, executed and delivered
to the Trustee, by the corporation formed by such consolidation, or
into which the Guarantor shall have been merged, or by the corporation
which shall have acquired such property and (ii) immediately after
giving effect to such transaction, no Default or Event of Default would
exist. In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in
form to the Trustee, of the Subsidiary Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such
successor corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a
Guarantor. Such successor corporation thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All 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 OF SUBSIDIARY GUARANTEES.
-----------------------------------
Concurrently with any sale of assets (including, if applicable, all of
the capital stock of any Guarantor), any Liens in favor of the Trustee in the
assets sold thereby shall be released; PROVIDED, that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are treated in
accordance with the provisions of Section 4.10 hereof If the assets sold in such
sale or other disposition include all or substantially all of the assets of any
Guarantor or all of the
79
capital stock of any Guarantor, then such Guarantor (in the event of a sale or
other disposition of all of the capital stock of such Guarantor) or the
corporation acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets of a Guarantor) shall be released and
relieved of its obligations under its Subsidiary Guarantee or Section 11.03,
hereof, as the case may be; PROVIDED, that in the event of an Asset Sale, the
Net Proceeds from such sale or other disposition are treated in accordance with
the provisions of Section 4.10 hereof. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the
provisions of this Indenture, including without limitation Section 4.10 hereof,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
Upon the release by all holders of Senior Indebtedness and Guarantor
Senior Indebtedness of all guarantees issued by a Guarantor relating to such
Senior Indebtedness and Guarantor Senior Indebtedness and all Liens on the
property and assets of such Guarantor relating to Senior Indebtedness and
Guarantor Senior Indebtedness, then such Guarantor shall be released and
relieved of any obligations under its Subsidiary Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that all holders of Senior Indebtedness and Guarantor Senior
Indebtedness have released all guarantees issued by a Guarantor and all Liens on
the property and assets of such Guarantor relating to such Senior Indebtedness
and Guarantor Senior Indebtedness, the Trustee shall execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee pursuant to either of the preceding paragraphs of this Section 11.04
shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article XI.
SECTION 11.05. 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 XI, shall in such 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 XI, in place of the Trustee.
SECTION 11.06. SUBORDINATION OF SUBSIDIARY GUARANTEES.
----------------------------------------
The obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article XI shall be junior and subordinated to the Guarantor
Senior Indebtedness of such Guarantor on the same basis as the Notes are junior
and subordinated to Senior Indebtedness. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to this Indenture,
including Article X hereof.
80
SECTION 11.07. UNRESTRICTED SUBSIDIARY.
------------------------
The Board of Directors of the Company may at any time designate the
Unrestricted Subsidiary to be a Subsidiary; PROVIDED, that such designation
shall be deemed to be an incurrence of Indebtedness by a Subsidiary of the
Company of any outstanding Indebtedness of the Unrestricted Subsidiary and such
designation shall only be permitted if (a) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a PRO FORMA basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (b) no
Default or Event of Default would be in existence following such designation. In
addition, the Unrestricted Subsidiary shall continue to be an unrestricted
subsidiary for purposes of this Indenture only if it: (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is a Person with respect to which neither the
Company nor any of its Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional Equity Interests or (B) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (iii) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of the Company or any
of its Subsidiaries. If, at any time, the Unrestricted Subsidiary fails to meet
the requirements described in the preceding sentence, the Unrestricted
Subsidiary shall thereafter cease to be an unrestricted subsidiary for purposes
of this Indenture and any Indebtedness of the Unrestricted Subsidiary shall be
deemed to be incurred by a Subsidiary of the Company as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under Section
4.09 hereof, the Company shall be in default of such covenant). In the event the
Unrestricted Subsidiary is designated as a Subsidiary or ceases to be an
unrestricted subsidiary for purposes of this Indenture, the Company shall cause
the Unrestricted Subsidiary to execute and deliver to the Trustee a supplemental
indenture pursuant to which the Unrestricted Subsidiary will become a Guarantor.
SECTION 11.08. LIMITS ON SUBSIDIARY GUARANTEES.
-------------------------------
Notwithstanding anything to the contrary in this Article XI, the
aggregate amount of the Obligations guaranteed under this Indenture by any
Guarantor shall be reduced to the extent necessary to prevent the Subsidiary
Guarantee of such Guarantor from violating or becoming voidable under any law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
-----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
81
SECTION 12.02. NOTICES.
---------
Any notice or communication by the Company, a Guarantor 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), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or a Guarantor:
Speedway Motorsports, Inc.
Highway ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: CORPORATE TRUST ADMINISTRATION
The Company, a Guarantor 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 answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next 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 ss. 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.
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.
82
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
-------------------------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
---------------------------------------------------
Upon any request or application by the Company and/or any Guarantor to
the Trustee to take any action or refrain from taking any action under this
Indenture, the Company and/or such Guarantor, as the case may be, shall furnish
to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 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 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05. 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 ss. 314(a)(4)) shall comply with the provisions of TIA ss.
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.
SECTION 12.06. 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; PROVIDED, that no such rule shall
conflict with the terms of this Indenture or the TIA.
83
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
------------------------------------------------------------
STOCKHOLDERS.
-------------
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 Notes, the Subsidiary Guarantees, this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
SECTION 12.08. GOVERNING LAW.
--------------
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 12.09. 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, the Notes or the Subsidiary Guarantees.
SECTION 12.10. SUCCESSORS.
------------
All agreements of the Company and the Guarantors in this Indenture, the
Subsidiary Guarantees and the Notes shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
--------------
In case any provision in this Indenture, the Subsidiary Guarantees or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 12.12. 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 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
---------------------------------
The Table of Contents 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.
84
SECTION 12.14. FURTHER INSTRUMENTS AND ACTS.
-----------------------------
Upon request of the Trustee, the Company and the Guarantors will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purposes of
this Indenture.
(Signatures on following page]
85
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY:
--------
SPEEDWAY MOTORSPORTS, INC.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief of Financial Officer and
Vice President
GUARANTORS:
-----------
ATLANTA MOTOR SPEEDWAY, INC.,
a Georgia corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
BRISTOL MOTOR SPEEDWAY, INC.,
a Tennessee corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
CHARLOTTE MOTOR SPEEDWAY, INC.,
a North Carolina corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
SPR ACQUISITION CORPORATION,
a California corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
86
TEXAS MOTOR SPEEDWAY, INC.,
a Texas corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
600 RACING, INC.,
a North Carolina corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
SONOMA FUNDING CORPORATION,
a California corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
SPEEDWAY CONSULTING & DESIGN, INC.,
a North Carolina corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
THE SPEEDWAY CLUB, INC.,
a North Carolina corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
INEX CORP.,
a North Carolina corporation
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
87
SPEEDWAY FUNDING CORP.,
a Delaware corporation
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title Vice President
LAS VEGAS MOTOR SPEEDWAY, LLC,
a Nevada limited liability company
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Manager
SMI SYSTEMS, LLC,
A Nevada limited liability company
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Manager
SPEEDWAY SYSTEMS LLC,
a North Carolina limited liability company
By: IMS Systems Limited Partnership,
its sole manager
By: Speedway Motorsports, Inc., its
general partner
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Vice President
88
TRUSTEE:
--------
U.S. BANK TRUST NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. Arnin
-----------------------
Name: ▇▇▇▇▇▇ ▇. Arnin
Title: Vice President
89
EXHIBIT A
CUSIP NUMBER 8477888G1
(Face of Note)
SPEEDWAY MOTORSPORTS, INC.
8 1/2% [INITIAL] [EXCHANGE] SENIOR SUBORDINATED NOTES DUE 2007
No.______________ $_______________
SPEEDWAY MOTORSPORTS, INC., a Delaware corporation, for value
received, hereby promises to pay to _________________________________________
_________________________________________ or registered assigns, the
principal sum of __________________ Dollars on August 15, 2007.
Interest Payment Dates: February 15, and August 15
Record Dates: January 31, and July 31
SPEEDWAY MOTORSPORTS, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
This is one of the [Global] Notes referred
to in the within mentioned Indenture:
Dated: _______, ____
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By:______________________________
Authorized Signatory
A-1
(Back of Note)
SPEEDWAY MOTORSPORTS, INC.
8 1/2 % [INITIAL] [EXCHANGE] SENIOR SUBORDINATED NOTES DUE 2007
[Unless and until it is exchanged in whole or in part for Notes in
certificated form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository, by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor Depository.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), to the
issuer 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
may be requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or such other entity as may be 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.](1)'
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY BY THE INITIAL
PURCHASERS TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A UNDER THE SECURITIES ACT, OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EXEMPTION
FROM
------------------------
(1) This paragraph should be included only if the Note is issued in Global
Form.
A-2
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF APPLICABLE) OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), TO THE COMPANY OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN ADDITION, TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND BY SUBSEQUENT
INVESTORS, AS SET FORTH IN THROUGH ABOVE AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY."(2)
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Speedway Motorsports, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture, being herein
called the ("Company"), promises to pay interest on the principal amount of this
Note at 8 1/2% per annum from May 11, 1999 until maturity and shall pay the
Liquidated Damages, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on February 15 and August 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment
--------------------------
(2) This paragraph should be included only if the Note is a Transfer
Restricted Security.
A-3
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; PROVIDED, that if there is no existing Default in the payment of
interest, and if this Note 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; PROVIDED, FURTHER, that
the first Interest Payment Date shall be August 15, 1999. The Company shall pay,
to the extent lawful, interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 31 or
July 31 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium, interest and
Liquidated Damages at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available will be
required with respect to principal of and interest, premium and Liquidated
Damages, if any, on all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, U.S. Trust National
Association, the Trustee under the Indenture, will 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 Subsidiaries may act in any such
capacity; PROVIDED that if the Company or such Subsidiary is acting as Paying
Agent, the Company or such Affiliate shall segregate all funds held by it as
Paying Agent and hold them in trust for the benefit of the Holders or the
Trustee.
4. Indenture. The Company issued the Notes under an Indenture dated as
of May 11, 1999 (the "INDENTURE"), among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. The Notes are unsecured obligations of the Company limited to $325.0
million in aggregate principal amount.
A-4
The summary of the terms of this Note contained herein does not purport
to be complete and is qualified by reference to the Indenture. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.
The Indenture restricts, among other things, the Company's ability to
incur additional indebtedness and issue preferred stock, pay dividends or make
certain other restricted payments, incur liens to secure PARI PASSU or
subordinated indebtedness, engage in any sale and leaseback transaction, sell
stock of Subsidiaries, incur indebtedness that is subordinate in right of
payment to any Senior Indebtedness and senior in right of payment to the Notes,
apply net proceeds from certain asset sales, merge or consolidate with any other
person, sell, assign, transfer, lease, convey or otherwise dispose of
substantially all of the assets of the Company or enter into certain
transactions with affiliates.
5. Optional Redemption.
--------------------
The Company shall not have the option to redeem the Notes prior to
August 15, 2002. Thereafter, the Company shall have the option to redeem the
Notes, 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 thereon to the applicable
redemption date, if redeemed during the 12-month period beginning on August 15
of the years indicated below:
YEAR PERCENTAGE
----- ----------
2002.......................................... 104.250%
2003.......................................... 102.830%
2004.......................................... 101.420%
2005 and thereafter .......................... 100.000%
6. Mandatory Redemption.
----------------------
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. Repurchase at Option of Holder.
--------------------------------
(a) Upon a Change of Control, each Holder of Notes will have
the right to require the Company to make an offer (a "Change of Control
Offer") to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of each Holder's Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase (in
either case, the "Change of Control Payment"). Within 15 days following
any Change of Control, the Company shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change
of Control and offering to repurchase Notes pursuant to the
A-5
procedures governing the Change of Control Offer as required by the
Indenture and described in such notice.
(b) If the Company or a Subsidiary consummates any Asset Sale,
within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $5.0 million, the Company shall commence an offer to
all Holders of Notes (an "Asset Sale Offer") pursuant to Section 4.10
of the Indenture to purchase the maximum principal amount of Notes 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, if any, thereon to the date fixed for the closing
of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use such deficiency for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a PRO RATA basis. Holders of Notes that are
the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to
have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" attached to this Note.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date, interest ceases to accrue on Notes or portions
thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes 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 Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the
A-6
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Notes. Without the consent of any Holder of a Note, the Indenture or
the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's, or any
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act or to provide for the issuance of Additional Notes
pursuant to the Indenture to the extent permitted under the restrictions
contained in the Credit Agreement and in the Indenture.
12. Defaults and Remedies. The Events of Default provided by the
Indenture include, without limitation:
(a) default for 30 days in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Notes (whether
or not prohibited by the subordination provisions of the Indenture);
(b) default in payment when due of the principal of or premium, if any,
on the Notes (whether or not prohibited by the subordination provisions
of the Indenture); (c) failure by the Company to comply with Section
4.10 or 4.15 of the Indenture; (d) failure by the Company to comply
with Section 4.07 or 4.09 of the Indenture and the continuance of such
failure for a period of 30 days after notice is given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at
least 25 % in aggregate principal amounts of the Notes then
outstanding; (e) failure by the Company for 60 days after notice is
given to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25 % in aggregate principal amount of the
Notes then outstanding to comply with any of the Company's other
covenants or agreements in the Indenture or the Notes; (f) 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 Subsidiaries (or the
payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date of the Indenture, which default (i) is caused by
a failure to pay principal of such Indebtedness at its Stated Maturity
(after the expiration of any applicable grace period) or (ii) results
in the acceleration of such Indebtedness prior to its maturity and, in
each case, the principal amount of which Indebtedness, together with
the principal amount of any other such Indebtedness described in
clauses (i) and (ii) above, aggregates $5.0 million or more; (g)
failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5.0 million (net of amounts covered
by insurance), which judgments are not paid, discharged or stayed for a
period of 60 days; (h) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries; (i) the Subsidiary
Guarantee of any Guarantor is held in judicial proceedings to be
unenforceable or invalid or ceases for any reason to be in full force
and effect (other than in accordance with the terms of the Indenture)
or any Guarantor or any Person acting on behalf of any Guarantor denies
or disaffirms such Guarantor's obligations under its
A-7
Subsidiary Guarantee (other than by reason of a release of such
Guarantor from its Subsidiary Guarantee in accordance with the terms of
the Indenture). If any Event of Default (other than an Event of Default
specified in clause (h) above occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately; PROVIDED, however, that if any Senior Indebtedness is
outstanding under the Credit Agreement, upon a declaration of
acceleration, the Notes shall be payable upon earlier of (x) the day
which is five Business Days after the provision to the Company and the
agent under the Credit Agreement of written notice of such declaration
and (y) the date of acceleration of any Indebtedness under the Credit
Agreement. Notwithstanding the foregoing, in the case of an Event of
Default specified in clause (h) of this paragraph 12 occurs with
respect to the Company, any Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of the Notes
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. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event
of Default in the payment of interest on, or the principal of, the
Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the 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.
13. 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 or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder, by accepting a Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. 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),
A-8
JE 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).
17. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of May 11, 1999, among the Company and
the parties named on the signature pages thereof (the "Registration Rights
Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Speedway Motorsports, Inc.
Highway ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
19. Unclaimed Money. If money for the payment of principal, premium, if
any, or interest, or Liquidated Damages, if any, remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its request unless any abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment unless such abandoned property law designates
another Person.
20. Discharge and Defeasance. Subject to certain conditions, the
Company at any time may terminate some or all of the obligations of the Company
under the Notes and the Indenture if the Company irrevocably deposits in trust
with the Trustee cash or U.S. Government Obligations for the payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Notes to redemption or maturity, as the case may be.
21. Reports. Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to the
Trustee and to the Holders of Notes within 15 days after it is or would have
been required to file such with the SEC (i) all quarterly and annual financial
information that is or would be required to be contained in a filing with the
SEC on Forms l0-Q and 10-K if the Company were required to file such forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed
A-9
with the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC, at
any time after the Company files a registration statement with respect to the
Exchange Offer or a Shelf Registration Statement, the Company shall (i) file a
copy of all such information and reports with the SEC for public availability
(unless the SEC will not accept such a filing) and (ii) if the SEC will not
accept such filing, promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such documents to securities
analysts and prospective inventors. In addition, for so long as any Notes remain
outstanding, the Company shall furnish to the Trustee, 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 Company also shall comply with the other provisions of TIA
ss. 314(a).
22. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
A-10
EXHIBIT E
FORM OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, (a) the due and punctual payment of the principal
of, premium, if any, and interest on the Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth in Article XI of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. The Indebtedness evidenced by this Subsidiary Guarantee
is, to the extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness (as defined in the Indenture), and this Subsidiary Guarantee is
issued subject to such provisions. Each Holder of a Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee, on behalf of such Holder, to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose;
PROVIDED, HOWEVER, that the Indebtedness evidenced by this Subsidiary Guarantee
shall cease to be so subordinated and subject in right of payment upon any
defeasance of this Note in accordance with the provisions of the Indenture.
E-1
GUARANTORS:
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ATLANTA MOTOR SPEEDWAY, INC.,
a Georgia corporation
By:__________________________________
Name:
Title:
BRISTOL MOTOR SPEEDWAY, INC.,
a Tennessee corporation
By:__________________________________
Name:
Title:
CHARLOTTE MOTOR SPEEDWAY, INC.,
a North Carolina corporation
By:__________________________________
Name:
Title:
SPR ACQUISITION CORPORATION,
a California corporation
By:__________________________________
Name:
Title:
TEXAS MOTOR SPEEDWAY, INC.,
a Texas corporation
By:__________________________________
Name:
Title:
E-2
600 RACING, INC.,
a North Carolina corporation
By:__________________________________
Name:
Title:
SONOMA FUNDING CORPORATION,
a California corporation
By:__________________________________
Name:
Title:
SPEEDWAY CONSULTING & DESIGN, INC.,
a North Carolina corporation
By:__________________________________
Name:
Title:
THE SPEEDWAY CLUB, INC.,
a North Carolina corporation
By:__________________________________
Name:
Title:
INEX CORP.,
a North Carolina corporation
By:__________________________________
Name:
Title:
SPEEDWAY FUNDING CORP.,
a Delaware corporation
By:__________________________________
Name:
Title:
E-3
LAS VEGAS MOTOR SPEEDWAY, LLC,
a Nevada limited liability company
By:__________________________________
Name:
Title:
SMI SYSTEMS, LLC,
A Nevada limited liability company
By:__________________________________
Name:
Title:
SPEEDWAY SYSTEMS LLC,
a North Carolina limited liability company
By:__________________________________
Name:
Title:
E-4
