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Exhibit 4.1
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BALLY TOTAL FITNESS HOLDING CORPORATION
and
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
INDENTURE
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Dated as of October 7, 1997
$225,000,000
9-7/8% Senior Subordinated Notes due 2007
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions....................................................................1
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Section 1.2. Other Definitions.............................................................23
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Section 1.3. Compliance Certificates and Opinions..........................................24
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Section 1.4. Form of Documents Delivered to Trustee........................................25
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Section 1.5. Acts of Holders...............................................................26
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Section 1.6. Notices, etc., to Trustee and the Company.....................................26
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Section 1.7. Notice to Holders; Waiver.....................................................27
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Section 1.8. Conflict with Trust Indenture Act.............................................27
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Section 1.9. Effect of Headings and Table of Contents......................................28
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Section 1.10. Successors and Assigns........................................................28
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Section 1.11. Separability Clause...........................................................28
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Section 1.12. Benefits of Indenture.........................................................28
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Section 1.13. GOVERNING LAW.................................................................28
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Section 1.14. Legal Holidays................................................................28
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Section 1.15. Schedules.....................................................................29
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Section 1.16. Counterparts..................................................................29
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Section 1.17. No Recourse against Others....................................................29
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ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally...............................................................29
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Section 2.2. Form of Face of Security......................................................30
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Section 2.3. Form of Reverse of Securities.................................................45
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ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms...............................................................53
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Section 3.2. Denominations.................................................................54
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Section 3.3. Execution, Authentication, Delivery and Dating................................54
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Section 3.4. Temporary Securities..........................................................55
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Section 3.5. Registration, Registration of Transfer and Exchange...........................56
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Section 3.6. Book-Entry Provisions for Global Securities...................................58
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Section 3.7. Special Transfer Provisions...................................................59
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Section 3.8. Mutilated, Destroyed, Lost and Stolen Securities..............................63
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Section 3.9. Payment of Interest; Interest Rights Preserved................................64
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Section 3.10. CUSIP Numbers.................................................................65
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Section 3.11. Persons Deemed Owners.........................................................66
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Section 3.12. Cancellation..................................................................66
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Section 3.13. Computation of Interest.......................................................66
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ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.1. Company's Option to Effect Defeasance or Covenant Defeasance..................66
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Section 4.2. Defeasance and Discharge......................................................67
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Section 4.3. Covenant Defeasance...........................................................67
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Section 4.4. Conditions to Defeasance or Covenant Defeasance...............................68
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Section 4.5. Deposited Money and U.S. Government Obligations to Be Held in Trust;
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Other Miscellaneous Provisions................................................70
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Section 4.6. Reinstatement.................................................................71
ARTICLE V
REMEDIES
Section 5.1. Events of Default.............................................................71
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Section 5.2. Acceleration of Maturity; Rescission and Annulment............................73
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Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee...............74
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Section 5.4. Trustee May File Proofs of Claim..............................................75
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Section 5.5. Trustee May Enforce Claims without Possession of Securities...................76
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Section 5.6. Application of Money Collected................................................76
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Section 5.7. Limitation on Suits...........................................................76
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Section 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest.....77
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Section 5.9. Restoration of Rights and Remedies............................................77
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Section 5.10. Rights and Remedies Cumulative................................................78
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Section 5.11. Delay or Omission Not Waiver..................................................78
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Section 5.12. Control by Holders............................................................78
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Section 5.13. Waiver of Past Defaults.......................................................78
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Section 5.14. Undertaking for Costs.........................................................79
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Section 5.15. Waiver of Stay, Extension or Usury Laws.......................................79
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Section 5.16. Remedies Subject to Applicable Law............................................80
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ARTICLE VI
THE TRUSTEE
Section 6.1. Duties of Trustee.............................................................80
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Section 6.2. Notice of Defaults............................................................81
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Section 6.3. Certain Rights of Trustee.....................................................81
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Section 6.4. Trustee Not Responsible for Recitals, Dispositions of Securities or
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Application of Proceeds Thereof...............................................83
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Section 6.5. Trustee and Agents May Hold Securities; Collections; etc......................83
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Section 6.6. Money Held in Trust...........................................................84
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Section 6.7. Compensation and Indemnification of Trustee and Its Prior Claim...............84
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Section 6.8. Conflicting Interests.........................................................84
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Section 6.9. Trustee Eligibility...........................................................85
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Section 6.10. Resignation and Removal; Appointment of Successor Trustee.....................85
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Section 6.11. Acceptance of Appointment by Successor........................................87
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Section 6.12. Merger, Conversion, Consolidation or Succession to Business...................87
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Section 6.13. Preferential Collection of Claims Against Company.............................88
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ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.....................88
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Section 7.2. Disclosure of Names and Addresses of Holders..................................88
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Section 7.3. Reports by Trustee............................................................89
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Section 7.4. Reports by Company............................................................89
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ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 8.1. Company May Merge, Consolidate, etc., Only on Certain Terms...................90
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Section 8.2. Successor Substituted.........................................................91
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures and Agreements without Consent of Holders.............92
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Section 9.2. Supplemental Indentures and Agreements with Consent of Holders................93
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Section 9.3. Execution of Supplemental Indentures and Agreements...........................94
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Section 9.4. Effect of Supplemental Indentures.............................................94
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Section 9.5. Conformity with Trust Indenture Act...........................................94
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Section 9.6. Reference in Securities to Supplemental Indentures............................94
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Section 9.7. Notice of Supplemental Indentures.............................................95
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ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest....................................95
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Section 10.2. Maintenance of Office or Agency...............................................95
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Section 10.3. Money for Security Payments to Be Held in Trust...............................96
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Section 10.4. Corporate Existence...........................................................97
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Section 10.5. Payment of Taxes and Other Claims.............................................97
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Section 10.6. Maintenance of Properties.....................................................98
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Section 10.7. Insurance.....................................................................98
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Section 10.8. Limitation on Indebtedness....................................................98
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Section 10.9. Limitation on Restricted Payments.............................................99
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Section 10.10. Limitation on Transactions with Affiliates...................................102
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Section 10.11. Limitation on Liens..........................................................103
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Section 10.12. Limitation on Sale of Assets.................................................104
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Section 10.13. Purchase of Securities upon a Change of Control..............................105
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Section 10.14. Limitation on Preferred Stock of Subsidiaries................................109
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Section 10.14A.Limitation on Senior Subordinated Indebtedness...............................109
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Section 10.15. Limitation on Dividends and Other Payment Restrictions Affecting
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Subsidiaries.................................................................109
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Section 10.16. Limitations on Unrestricted Subsidiaries.....................................110
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Section 10.17. Provision of Financial Statements............................................111
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Section 10.18. Statement by Officers as to Default..........................................111
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Section 10.19. Waiver of Certain Covenants..................................................112
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ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Rights of Redemption.........................................................112
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Section 11.2. Applicability of Article.....................................................113
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Section 11.3. Election to Redeem; Notice to Trustee........................................113
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Section 11.4. Selection by Trustee of Securities to Be Redeemed............................113
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Section 11.5. Notice of Redemption.........................................................113
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Section 11.6. Deposit of Redemption Price..................................................114
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Section 11.7. Securities Payable on Redemption Date........................................115
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Section 11.8. Securities Redeemed or Purchased in Part.....................................115
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ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.1. Satisfaction and Discharge of Indenture......................................116
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Section 12.2. Application of Trust Money...................................................117
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ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Indebtedness................................117
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Section 13.2. Payment Over of Proceeds Upon Dissolution, etc...............................118
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Section 13.3. Suspension of Payment When Designated Senior Indebtedness in Default.........119
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Section 13.4. Payment Permitted if No Default..............................................121
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Section 13.5. Subrogation to Rights of Holders of Senior Indebtedness......................121
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Section 13.6. Provisions Solely to Define Relative Rights..................................121
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Section 13.7. Trustee to Effectuate Subordination..........................................122
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Section 13.8. No Waiver of Subordination Provisions........................................122
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Section 13.9. Notice to Trustee............................................................123
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Section 13.10. Reliance on Judicial Orders or Certificates..................................124
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Section 13.11. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of
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Trustee's Rights.............................................................124
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Section 13.12. Article Applicable to Paying Agents..........................................124
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Section 13.13. No Suspensions of Remedies...................................................125
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Section 13.14. Trustee's Relation to Senior Indebtedness....................................125
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INDENTURE dated as of October 7, 1997 between BALLY TOTAL
FITNESS HOLDING CORPORATION, a Delaware corporation (as more fully defined
below, the "Company"), and FIRST TRUST NATIONAL ASSOCIATION, a national banking
association, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
9-7/8% Senior Subordinated Notes due 2007, Series A (the "Series A Securities"
or the "Initial Securities"), and an issue of 9-7/8% Senior Subordinated Notes
due 2007, Series B (the "Series B Securities" or the "Exchange Securities" and,
together with the Series A Securities, the "Securities"), of substantially the
tenor and amount hereinafter set forth, and to provide therefor, the Company has
duly authorized the execution and delivery of this Indenture and the Securities;
Upon the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement (as defined herein), this
Indenture will be subject to, and shall be governed by, the provisions of the
Trust Indenture Act (as defined herein) that are required to be part of and to
govern indentures qualified under the Trust Indenture Act; and
All acts and things necessary have been done to make (i) the
Securities, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid obligations of the Company and (ii) this
Indenture a valid agreement of the Company in accordance with the terms of this
Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
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For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
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(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars
shall refer to the lawful currency of the United States of America;
(f) all references herein to particular Sections or Articles
refer to this Indenture unless otherwise so indicated; and
(g) the word "or" is not exclusive and the word "including"
means including without limitation.
The following terms shall have the meanings set forth in this
Section.
"Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Subsidiary or merges with or into the
Company or any Subsidiary, or (ii) assumed in connection with the acquisition of
assets from such Person, in each case, other than Indebtedness incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary or
such acquisition, as the case may be. Acquired Indebtedness shall be deemed to
be incurred on the date of the related acquisition of assets from any Person or
the date the acquired Person becomes a Subsidiary, as the case may be.
"Adjusted Consolidated Interest Expense" of any Person means,
without duplication, for any period, as applied to any Person, the sum of (a)
the interest expense of such Person and its Consolidated Subsidiaries (exclusive
of deferred financing fees and any premiums or penalties paid in connection with
redeeming or retiring any Indebtedness prior to its stated maturity) for such
period, on a Consolidated basis, including without limitation, (i) amortization
of debt discount, (ii) the net cost under interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, and (iv) accrued interest, plus (b) (i) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid, or
accrued by such Person during such period, and (ii) all capitalized interest of
such Person and its Consolidated Subsidiaries, in each case as determined in
accordance with GAAP consistently applied.
"Affiliate" means, with respect to any specified Person: (i)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with
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such specified Person; (ii) any other Person that owns, directly or indirectly,
10% or more of such specified Person's Capital Stock or beneficial equity
interest in such Person (if such Person is a real estate investment trust), or
any officer or director of any such specified Person or other Person or, with
respect to any natural Person, any person having a relationship with such Person
by blood, marriage or adoption not more remote than first cousin; or (iii) any
other Person 10% or more of the Voting Stock of which is beneficially owned or
held directly or indirectly by such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary, other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (A) that is governed by the provisions of Article VIII,
(B) that is by any Subsidiary to the Company or any Wholly Owned Subsidiary in
accordance with the terms of the Indenture, (C) that is of obsolete equipment or
other obsolete assets in the ordinary course of business, (D) that constitutes
the making of a Permitted Investment (other than pursuant to clause (v) of the
definition of "Permitted Investment"), (E) the Fair Market Value of which in the
aggregate does not exceed $1,000,000 in any transaction or series of related
transactions, (F) sales of accounts receivable and other transactions among the
Company and its Subsidiaries pursuant to the Securitization Facility, or (G)
Investments by the Company which comply with the terms of clause (ix) of the
definition of "Permitted Investments".
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment; by (ii) the sum of all such principal payments.
"Bank Credit Facility" means the third amended and restated
Credit Agreement, dated as of June 26, 1995, among the Company, the Banks and
The Chase Manhattan Bank, as agent, as such agreement, in whole or in part, may
be amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing).
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy
Code of 1978, as amended, or any similar United States federal or state law
relating to bankruptcy, insolvency,
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receivership, winding-up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law.
"Banks" means the lenders under the Bank Credit Facility.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means any Security bearing the legend
specified in Section 2.2 evidencing all or part of a series of Securities,
authenticated and delivered to the Depositary for such series or its nominee,
and registered in the name of such depositary or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the City of New
York or the city in which the principal office of the Trustee is located are
authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means any obligation
of such Person and its Subsidiaries on a Consolidated basis under any capital
lease of real or personal property which, in accordance with GAAP, has been
recorded as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or other equity interests whether now outstanding or
issued after the date of the Indenture.
"Cash Equivalents" means: (i) Temporary Cash Investments; (ii)
securities received by the Company or any Subsidiary from the transferee in an
Asset Sale that are promptly converted by the Company or such Subsidiary into
cash; (iii) the assumption of Indebtedness or other obligations or liabilities
of the Company or any Subsidiary in connection with an Asset Sale; and (iv) in
connection with an Asset Sale to a Person where the assets sold, issued,
conveyed, transferred, leased or otherwise disposed of are included in a
business which will be a party to the Franchise Program, the net present value
of payments by such Person pursuant to the Franchise Program as calculated and
certified by the chief financial officer of the Company.
"Change of Control" means the occurrence of any of the
following events: (i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have beneficial ownership of all shares that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of
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time), directly or indirectly, of more than a majority of the total outstanding
Voting Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors (together with any new directors whose election to the Board of
Directors or whose nomination for election by the stockholders of the Company
was approved by a vote of 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved), cease for any reason to constitute a
majority of such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or conveys, transfers or
leases all or substantially all of its assets to any Person, or any corporation
consolidates with or merges into or with the Company in any such event pursuant
to a transaction in which the outstanding Voting Stock of the Company is changed
into or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company) or where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of
the surviving corporation which is not Redeemable Capital Stock or (y) cash,
securities and other property (other than Capital Stock of the surviving
corporation) in an amount which could be paid by the Company as a Restricted
Payment as described in Section 10.9 (and such amount shall be treated as a
Restricted Payment subject to the provisions in the Indenture described in
Section 10.9) and (B) no "person" or "group" owns immediately after such
transaction, directly or indirectly, more than a majority of the total
outstanding Voting Stock of the surviving corporation; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with the provisions described in Article
VIII.
"Company" means Bally Total Fitness Holding Corporation, a
corporation incorporated under the laws of Delaware, until a successor Person
shall have become such pursuant to the applicable provisions of the Indenture,
and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by (i) any of its Chairman of the
Board, its Vice Chairman, its President or a Vice President (regardless of Vice
Presidential designation) or Treasurer, and (ii) any one of its Assistant
Treasurers, its Secretary or any Assistant Secretary, and delivered to the
Trustee, provided, however, that such request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being signed
by one of such officers or directors and one officer pursuant to clause (ii)
above.
"Consolidated Fixed Charge Coverage Ratio" of any Person
means, for any period, the ratio of EBITDA to the sum of Adjusted Consolidated
Interest Expense for such period and cash dividends paid on any Preferred Stock
of such Person during such period; provided that (i) in making such computation,
the Adjusted Consolidated Interest Expense attributable to interest on any
Indebtedness shall be computed on a pro forma basis and (A) where such
Indebtedness was outstanding during the period and bore a floating interest
rate, interest shall be computed as if the
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rate in effect on the date of computation had been the applicable rate for the
entire period, and (B) where such Indebtedness was not outstanding during the
period for which the computation is being made but which bears, at the option of
the Company, a fixed or floating rate of interest, shall be computed by applying
at the option of the Company, either the fixed or floating rates and (ii) in
making such computation, the Adjusted Consolidated Interest Expense of such
Person attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period.
"Consolidated Income Tax Expense"of any Person means, for any
period, the provision for federal, state, local and foreign income taxes of such
Person and its Consolidated Subsidiaries for such period as determined in
accordance with GAAP.
"Consolidated Net Income (Loss)" of any Person means, for any
period, the Consolidated net income (or loss) of such Person and its
Subsidiaries for such period on a Consolidated basis as determined in accordance
with GAAP, adjusted, to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) all extraordinary gains or losses
(exclusive of all fees and expenses relating thereto), (ii) the portion of net
income (or loss) of such Person and its Subsidiaries on a Consolidated basis
allocable to minority interests in unconsolidated Persons to the extent that
cash dividends or distributions have not actually been received by such Person
or one of its Subsidiaries, (iii) net income (or loss) of any Person combined
with such Person or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iv) any gain or
loss, net of taxes, realized upon the termination of any employee pension
benefit plan, (v) net gains (or losses) (except for all fees and expenses
relating thereto) in respect of dispositions of assets other than in the
ordinary course of business, (vi) the net income of any Subsidiary to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is not at the time permitted, 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, (vii) any gain arising from the acquisition of any securities,
or the extinguishment, under GAAP, of any Indebtedness of such Person, (viii)
transaction costs charged in connection with the Refinancing, or (ix)
amortization of intangible assets of such Person and its Subsidiaries on a
consolidated basis under GAAP.
"Consolidated Non-Cash Charges" of any Person means, for any
period, the aggregate depreciation, amortization and other non-cash charges of
such Person and its Subsidiaries on a Consolidated basis for such period, as
determined in accordance with GAAP (excluding any non-cash charge which requires
an accrual or reserve for cash charges for any future period).
"Consolidated Tangible Assets" means consolidated total assets
of the Company and its Subsidiaries as reported in the Company's Consolidated
balance sheet from time to time as required by Section 10.17 less (A) (i) any
asset which is treated as an intangible asset in
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conformity with GAAP (including, without limitation, leasehold rights, franchise
rights, non-compete agreements, goodwill, unamortized debt discounts, patents,
patent applications, trademarks, trade names, copyrights and licenses), and (ii)
any deferred charges determined in conformity with GAAP (including, without
limitation, deferred finance charges and deferred membership origination costs),
plus (B) any treasury stock.
"Consolidation" means, with respect to any Person, the
consolidation of the accounts of such Person and each of its Subsidiaries if and
to the extent the accounts of such Person and each of its Subsidiaries would
normally be consolidated with those of such Person, all in accordance with GAAP.
The term "Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance.
"Credit Card Program Guarantee" means the obligation of the
Company to remit funds in excess of the sum of (a) $25,000,000 plus (b) a
reserve (of up to 25% of the amount owed to the Company by a member which
becomes an obligation due to the credit card issuer by such member) with respect
to the Company's credit card program pursuant to the Company's Credit Card
Program Agreement dated December 21, 1995, as such agreement, in whole or in
part, may be amended, renewed, extended, substituted, refinanced, restructured,
replaced, supplemented, or otherwise modified from time to time (including,
without limitation, any successive renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplementations or other
modifications of the foregoing).
"Default" means any event which is, or after notice or passage
of any time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in
the form of one or more Book-Entry Securities, The Depository Trust Company
("DTC"), its nominees and successors, or another Person designated as Depositary
by the Company, which must be a clearing agency registered under the Exchange
Act.
"Designated Senior Indebtedness" means (i) all Senior
Indebtedness under, or in respect of, the Bank Credit Facility and the
Securitization Facility, and (ii) any other Senior Indebtedness which at the
time of determination, has an aggregate principal amount outstanding of at least
$15 million and is specifically designated in the instrument evidencing such
Senior Indebtedness or the Agreement under which such Senior Indebtedness arises
as "Designated Senior Indebtedness" by the Company.
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14
"Disinterested Director" means, with respect to any
transaction or series of related transactions, a member of the Board of
Directors who does not have any material direct or indirect financial interest
in or with respect to such transaction or series of related transactions.
"EBITDA" means the sum of Consolidated Net Income, Adjusted
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-Cash Charges deducted in computing Consolidated Net Income, in each case,
for such period, of the Company and its Subsidiaries on a Consolidated basis,
all determined in accordance with GAAP consistently applied.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, or any successor statute.
"Exchange Offer" means the exchange offer by the Company of
Series B Securities for Series A Securities to be effected pursuant to Section
2.1 of the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the registration
statement under the Securities Act contemplated by Section 2.1 of the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or
property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy. Fair Market Value shall
be determined by the Board of Directors acting in good faith and shall be
evidenced by a resolution of the Board of Directors.
"Franchise Program" means the program under which the Company
and/or its Subsidiaries grant franchises to third parties which require
franchisees, among other things, to pay fees to the Company and/or its
Subsidiaries, and which, among other things, grants to the franchisee the right
to receive training from the Company or its Subsidiaries or sell memberships to
use facilities of the franchisee and the Company or its Subsidiaries. The
Franchise Program may include the conversion of facilities owned by the Company
or its Subsidiaries to franchise facilities and includes such a program as it
may be amended, renewed, extended, substituted, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewal, extension, substitution, restructuring,
replacement, supplementation or other modification of the foregoing).
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, consistently
applied, which are in effect on the date of this Indenture.
-8-
15
"Global Securities" means one or more securities evidencing
all or a part of the Securities to be issued as Book-Entry Securities issued to
the Depositary in accordance with this Indenture.
"Guaranteed Debt" of any Person means, without duplication,
all Indebtedness of any other Person referred to in the definition of
"Indebtedness" contained in this Section guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against loss,
(iii) to supply funds to, or in any other manner invest in, the debtor
(including any agreement to pay for property or services without requiring that
such property be received or such services be rendered), (iv) to maintain
working capital or equity capital of the debtor, or otherwise to maintain the
net worth, solvency or other financial condition of the debtor or (v) otherwise
to assure a creditor against loss; provided that the term "guarantee" shall not
include endorsements for collection or deposit, in either case in the ordinary
course of business or guarantees of operating leases.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit issued under
letter of credit facilities, acceptance facilities or other similar facilities
and in connection with any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any Capital Stock of such Person, or any warrants,
rights or options to acquire such Capital Stock, now or hereafter outstanding,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock issued by
such Person valued at the greater of its voluntary or
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involuntary maximum fixed repurchase price plus accrued and unpaid dividends,
(ix) the Credit Card Program Guarantee, (x) indebtedness incurred by a real
estate investment trust in which the Company or any Subsidiary has invested
pursuant to clause (ix) of the definition of "Permitted Investments" and as to
which, in the event that the Company controls such trust, any of the Company or
any Subsidiary is directly or indirectly liable (by virtue of the Company or any
such Subsidiary being the primary obligor on, guarantor of, or otherwise liable
in respect to, such indebtedness), and (xi) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability which constitutes Indebtedness of the types referred to in clauses (i)
through (ix) above. For purposes hereof, the "maximum fixed repurchase price" of
any Redeemable Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Capital Stock as
if such Redeemable Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the Fair Market Value of such
Redeemable Capital Stock, such Fair Market Value to be determined in good faith
by the board of directors of the issuer of such Redeemable Capital Stock.
"Indenture" means this instrument as originally executed
(including all exhibits and schedules thereto) and as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company
and any other obligor on the Indenture or under the Securities to pay principal
of, premium, if any, and interest when due and payable, and all other amounts
due or to become due under or in connection with the Indenture, the Securities
and the performance of all other obligations to the Trustee and the holders
under the Indenture and the Securities, according to the terms thereof.
"Initial Purchasers" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, Chase Securities Inc., Societe Generale Securities
Corporation and Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
"Initial Securities" has the meaning stated in the first
recital of this Indenture.
"Interest Payment Date" means the Stated Maturity of a regular
installment of interest on the Securities.
"Interest Rate Agreements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time.
"Investment" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution (by means of any transfer of cash or other
property to others or any payment for property or services
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for the account or use of others), or any purchase, acquisition or ownership
(other than ownership obtained without making, or becoming liable, directly or
indirectly, contingent or otherwise, for the making of, any advance, loan (or
the forgiveness thereof), payment, extension of credit or capital contribution
in connection therewith), by such Person of any Capital Stock, bonds, notes,
debentures or other securities issued or owned by any other Person and all other
items that would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Issue Date" means the date on which the Securities are
originally issued under this Indenture.
"Lien" means any mortgage or deed of trust, charge, pledge,
lien (statutory or otherwise), privilege, security interest, assignment,
deposit, arrangement, easement, hypothecation, claim, preference, priority or
other encumbrance upon or with respect to any property of any kind (including
any conditional sale, capital lease or other title retention agreement, any
leases in the nature thereof, and any agreement to give any security interest),
real or personal, movable or immovable, now owned or hereafter acquired.
"Maturity" means, when used with respect to any Security, the
date on which the principal of such Security becomes due and payable as therein
provided or as provided in the Indenture, whether at Stated Maturity, the Offer
Date, the Change of Control Purchase Date or the redemption date and whether by
declaration of acceleration, Offer in respect of Excess Proceeds, Change of
Control Offer in respect of a Change of Control, call for redemption or
otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor rating agency.
"Net Cash Proceeds" means (a) with respect to any Asset Sale
by any Person, the proceeds thereof (without duplication in respect of all Asset
Sales) in the form of cash or Temporary Cash Investments including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed of for, cash or Temporary Cash Investments (except
to the extent that such obligations are financed or sold with recourse to the
Company or any Subsidiary) net of (i) brokerage commissions and other reasonable
fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes payable as a
result of such Asset Sale, (iii) payments made to retire Indebtedness where
payment of such Indebtedness is secured by the assets or properties the subject
of such Asset Sale, (iv) amounts required to be paid to any Person (other than
the Company or any Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale and (v) appropriate amounts to be provided by the
Company or any Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee, and (b)
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18
with respect to any issuance or sale of Capital Stock or options, warrants or
rights to purchase Capital Stock, or debt securities or Capital Stock that have
been converted into or exchanged for Capital Stock as referred to in Section
10.9, the proceeds of such issuance or sale in the form of cash or Temporary
Cash Investments including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed of for,
cash or Temporary Cash Investments (except to the extent that such obligations
are financed or sold with recourse to the Company or any Subsidiary), net of
attorneys' fees, accountants' fees and brokerage, consultation, underwriting and
other fees and expenses actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result thereof.
"Non-U.S. Person" means a Person that is not a "U.S. person"
as defined in Regulation S under the Securities Act.
"Non-U.S. Subsidiaries" means Subsidiaries organized under the
laws of jurisdictions other than the United States and the states and
territories thereof.
"Officers' Certificate" means a certificate signed by any of
(i) the Chairman of the Board, Vice Chairman, President or a Vice President
(regardless of Vice Presidential designation) or Treasurer, and (ii) by any one
of its Assistant Treasurers, its Secretary or any Assistant Secretary, of the
Company, and delivered to the Trustee, provided, however, that such certificate
may be signed by any two of the officers or directors listed in clause (i) above
in lieu of being signed by one of such officers or directors and one officer
pursuant to clause (ii) above.
"Opinion of Counsel" means a written opinion of qualified
legal counsel, who may be counsel for the Company or the Trustee, and who shall
be reasonably acceptable to the Trustee, including but not limited to an Opinion
of Independent Counsel.
"Opinion of Independent Counsel" means a written opinion by
qualified legal counsel who is not an employee or consultant of the Company and
who shall be reasonably acceptable to the Trustee.
"Outstanding" when used with respect to Securities means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Securities;
provided, that if such Securities are to be redeemed, notice of such
redemption
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has been duly given pursuant to this Indenture or provision therefor
reasonably satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 4.2
and 4.3, with respect to which the Company has effected defeasance or
covenant defeasance as provided in Article IV; and
(d) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there
shall have been presented to the Trustee and Company proof reasonably
satisfactory to each of them that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of
the Company; PROVIDED, HOWEVER, that in determining whether the Holders
of the requisite principal amount of Outstanding Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any other obligor
on the Securities or any Affiliate of the Company or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so as to act
with respect to such Securities and that the pledgee is not the Company
or any other obligor on the Securities or any Affiliate of the Company
or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the
Company that is pari passu in right of payment to the Securities.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, premium, if any, or interest on any Securities on behalf
of the Company.
"Permitted Indebtedness" means:
(i) Indebtedness under the Bank Credit Facility in an
aggregate principal amount at any one time outstanding not to exceed
$70,000,000, minus any permanent reductions of the amount outstanding
under the Bank Credit Facility, which reduction is a result of the
application of Section 10.12;
(ii) Indebtedness under the Securitization Facility in an
aggregate amount not to exceed the greater of $160,000,000 or 80% of
the net book value of the consolidated accounts receivable of the
Company and its Subsidiaries, calculated in accordance with GAAP;
-13-
20
(iii) Indebtedness of the Company (a) represented by the
Securities, or (b) that is incurred, in any amount, and in whole or in
part, to (1) redeem all of the Securities outstanding as described
herein, or (2) effect a complete defeasance or a covenant defeasance
thereof as described herein; provided, in either case, that any
Indebtedness incurred under this subclause (b) is actually applied in
accordance with the applicable redemption or defeasance provision of
the Indenture;
(iv) Indebtedness of the Company outstanding on the date
hereof and listed on Schedule I;
(v) Indebtedness of the Company owing to a Subsidiary;
provided that any Indebtedness of the Company owing to a Subsidiary is
made pursuant to an intercompany note and is expressly subordinated in
right of payment to the payment and performance of the Company's
obligations under the Securities, and, upon an Event of Default, such
Indebtedness shall not be due and payable until such Event of Default
is cured, waived or rescinded; provided, further, that any disposition,
pledge or transfer of any such Indebtedness to a Person (other than a
disposition, pledge or transfer to a Subsidiary) shall be deemed to be
an incurrence of such Indebtedness by the Company not permitted by this
clause (v);
(vi) obligations of the Company entered into in the ordinary
course of business pursuant to Interest Rate Agreements designed to
protect the Company against fluctuations in interest rates in respect
of Indebtedness of the Company as long as such obligations do not
exceed the aggregate principal amount of such Indebtedness then
outstanding;
(vii) Indebtedness of the Company represented by Capital Lease
Obligations or Purchase Money Obligations or other Indebtedness
incurred or assumed in connection with the acquisition, improvement or
development of real or personal, movable or immovable, property in each
case incurred for the purpose of financing or refinancing all or any
part of the purchase price or cost of construction or improvement of
property used in the business of the Company and any refinancings of
such Indebtedness made in accordance with subclauses (a), (b) and (c)
of clause (xi) below, in an aggregate principal amount pursuant to this
clause (vii) not to exceed $25,000,000 outstanding at any time;
provided that the principal amount of any Indebtedness permitted under
this clause (vii) did not in each case at the time of incurrence exceed
the cost of the acquired or constructed asset or improvement so
financed;
(viii) Indebtedness of the Company in respect of performance
bonds, surety bonds and replevin bonds provided by the Company in the
ordinary course of business;
(ix) other Indebtedness of the Company that does not exceed
$50,000,000 in the aggregate at any one time outstanding;
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21
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or other financial instrument
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within four Business
Days of its incurrence; and
(xi) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebtedness described in clauses (iv) and (v) of this definition of
"Permitted Indebtedness", including any successive refinancings (a) so
long as the borrower under such refinancing is the Company or, if not
the Company, the same as the borrower of the Indebtedness being
refinanced, (b) the aggregate principal amount of Indebtedness
represented thereby as of the date hereof is not increased by such
refinancing by an amount greater than the lesser of (I) the stated
amount of any premium or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II) the amount of premium or other
payment actually paid at such time to refinance the Indebtedness, plus,
in either case, the amount of expenses of the Company incurred in
connection with such refinancing, and (c) (A) in the case of any
refinancing of Indebtedness that is Subordinated Indebtedness, such new
Indebtedness is made subordinated to the Securities at least to the
same extent as the Indebtedness being refinanced and (B) in the case of
Pari Passu Indebtedness or Subordinated Indebtedness, as the case may
be, such refinancing does not reduce the Average Life to Stated
Maturity or the Stated Maturity of such Indebtedness.
"Permitted Investment" means: (i) Investments in any
Subsidiary or any Person which, as a result of such Investment, (a) becomes a
Subsidiary or (b) is merged or consolidated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or any Subsidiary; (ii) Indebtedness of the Company described under clause (v)
of the definition of "Permitted Indebtedness"; (iii) Investments in any of the
Securities; (iv) Temporary Cash Investments; (v) Investments acquired by the
Company or any Subsidiary in connection with an Asset Sale permitted under
Section 10.12 to the extent such Investments are non-cash proceeds as permitted
under such covenant; (vi) Investments in existence on the date of the Indenture;
(vii) Investments in the aggregate amount of $5,000,000 to purchase Capital
Stock of any Subsidiary; (viii) any advance, loan (including guarantees) or
other extension of credit to any Person who purchases or acquires assets of the
Company or any Subsidiaries which are to be included in a business which will be
or is a party to the Franchise Program, limited to the purchase or acquisition
price of such assets; (ix) a one-time contribution of real property
independently valued at not more than $10,000,000 to a real estate investment
trust which is an Affiliate of the Company and additional contributions (and/or
the non-cash component of sales in a situation where less than 75% of the
consideration was received in cash or Cash Equivalents) to such trust of real
property independently valued, which in the aggregate at the time of each
additional contribution, together with all previous additional contributions, do
not have a value in excess of 3% of the Company's Consolidated Tangible Assets
as of the end of the next immediately preceding fiscal year; and (x) any other
Investments in joint ventures, partnerships, real estate
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investment trusts or other Persons reasonably related or complementary to the
business of the Company on the date hereof in an aggregate amount not greater
than $25,000,000 at any one time outstanding. In connection with any assets or
property contributed or transferred to any Person as an Investment, such
property and assets shall be equal to the Fair Market Value (as determined by
the Board of Directors) at the time of Investment.
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of a Subsidiary owing to the Company or
another Subsidiary; provided that such Indebtedness is made pursuant to
an intercompany note, and, upon an Event of Default, all amounts owing
pursuant to such Indebtedness are immediately due and payable; and
provided, further, that (a) any disposition, pledge or transfer of any
such Indebtedness to a Person (other than the Company or a Subsidiary)
shall be an incurrence of such Indebtedness by the obligor not within
the definition of "Permitted Subsidiary Indebtedness" pursuant to this
clause (i), and (b) any transaction pursuant to which any Subsidiary
ceases to be a Subsidiary shall be deemed to be the incurrence of
Indebtedness by such Subsidiary that is not within the definition of
"Permitted Subsidiary Indebtedness" pursuant to this clause (i);
(ii) Indebtedness of a Subsidiary represented by Indebtedness
which would be permitted by clause (iv), (vi), (vii), (viii), (ix), (x)
or (xi) of the definition of "Permitted Indebtedness" if incurred by
the Company;
(iii) Acquired Indebtedness of a Subsidiary that would be
permitted to be incurred by the Company if such Acquired Indebtedness
were being incurred by the Company;
(iv) Indebtedness of a Subsidiary under the Securitization
Facility;
(v) guarantees of Senior Indebtedness of the Company; and
(vi) guarantees of Indebtedness of Affiliates provided that
the Investment in such Affiliate complies with the limitation on
Restricted Payments covenant of the Indenture or constitutes a
Permitted Investment.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.8 in exchange for a
mutilated Security or in lieu of a lost, destroyed or stolen Security shall be
deemed to evidence the same debt as the mutilated, lost, destroyed, or stolen
Security.
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"Preferred Stock" means, with respect to any Person, any
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over the Capital Stock of any other class in such Person.
"Prospectus" means the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Series A Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Public Equity Offering" means any underwritten public
offering of Capital Stock (other than Redeemable Capital Stock) pursuant to a
registration statement that has been declared effective by the SEC (other than a
registration statement on Form S-8 or any successor form or otherwise relating
to equity securities issuable under any employee benefit plan of the Company).
"Purchase Money Obligation" means any Indebtedness secured by
a Lien on assets related to the business of the Company and its Subsidiaries and
any additions and accessions thereto, which are purchased at any time after the
Securities are issued; provided that (i) the security agreement or conditional
sales or other title retention contract pursuant to which the Lien on such
assets is created (collectively a "Purchase Money Security Agreement") shall be
entered into within 120 days after the purchase or substantial completion of the
construction of such assets and shall at all times be confined solely to the
assets so purchased or acquired, any additions and accessions thereto and any
proceeds therefrom, (ii) at no time shall the aggregate principal amount of the
outstanding Indebtedness secured thereby, be increased, except in connection
with the purchase of additions and accession thereto and except in respect of
fees and other obligations in respect of such Indebtedness, and (iii) (A) the
aggregate outstanding principal amount of Indebtedness secured thereby
(determined on a per asset basis in the case of any additions and accessions)
shall not at the time such Purchase Money Security Agreement is entered into
exceed 100% of the purchase price to the Company and its Subsidiaries of the
assets subject thereto, or (B) the Indebtedness secured thereby shall be with
recourse solely to the assets so purchased or acquired, any additions and
accessions thereto and any proceeds therefrom.
"QIB" or "Qualified Institutional Buyer" means a qualified
institution buyer under Rule 144A of the Securities Act.
"Qualified Capital Stock" of any Person means any and all
Capital Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any Capital Stock that,
either by its terms or by the terms of any security into which it is convertible
or exchangeable or otherwise, is or upon the happening of any event or passage
of time would be, required to be redeemed prior to any
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Stated Maturity of the principal of the Securities or is redeemable at the
option of the holder thereof at any time prior to any such Stated Maturity, or
is convertible into or exchangeable for debt securities at any time prior to any
such Stated Maturity at the option of the holder thereof.
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to
be redeemed pursuant to any provision in this Indenture means the price at which
it is to be redeemed pursuant to this Indenture.
"Refinancing" means (i) the offering and sale of the Notes
pursuant to the Indenture, (ii) the modification of the Bank Credit Facility,
and (iii) the consummation of the tender offer by the Company for its 13% Notes
outstanding prior to the Issue Date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 7, 1997, among the Company and the Initial
Purchasers.
"Registration Statement" means any registration statement of
the Company which covers any of the Series A Securities or Series B Securities
pursuant to the provisions of the Registration Rights Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Regular Record Date" for the interest payable on any Interest
Payment Date means April 1 or October 1, as the case may be (whether or not a
Business Day), immediately preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee
means any officer assigned to the Corporate Trust Office of the Trustee or any
agent of the Trustee appointed hereunder, including the chairman or vice
chairman of the board of directors or the executive committee of the board of
directors, the president, any vice president, any assistant vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers or
any other officer appointed hereunder to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.
"S&P" means Standard and Poor's Corporation or any successor
rating agency.
"Sale and Leaseback Transaction" means any transaction or
series of related transactions pursuant to which the Company or a Subsidiary
sells or transfers any property or
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asset in connection with the leasing, or the resale against installment
payments, of such property or asset to the seller or transferor.
"SEC" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act, or
if, at any time after the execution of the Indenture, the SEC is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Securities" has the meaning specified in the first recital of
this Indenture.
"Securities Act" means the United States Securities Act of
1933, as amended, or any successor statute.
"Securitization Facility" means the asset-backed securities
issued by the H&T Master Trust on December 13, 1996 in the aggregate principal
amount of $160,000,000, as such facility in whole or in part, may be amended,
renewed, extended, substituted, refinanced, restructured, replaced (including,
without limitation, with bank financing secured by receivables), supplemented or
otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancing, restructurings,
replacements, supplementations or other modifications of the foregoing).
"Senior Indebtedness" means the principal of, premium (if any)
and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign Bankruptcy Law
whether or not allowable as a claim in such proceeding) and all other monetary
obligations on any Indebtedness of the Company (other than as otherwise provided
in this definition), whether outstanding on the date hereof or thereafter
created, incurred or assumed, and whether at any time owing, actually or
contingently, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities. Without limiting the generality of the foregoing,
Senior Indebtedness shall include principal, premium (if any) and interest
(including interest accruing after the filing of a petition initiating any
proceedings under any state, federal or foreign Bankruptcy Laws whether or not
allowable as a claim in such proceeding) and all other monetary obligations of
every kind and nature of the Company from time to time owed under the Bank
Credit Facility or under the Securitization Facility; provided, however, that
any Indebtedness under any refinancing, refunding or replacement of the Bank
Credit Facility or the Securitization Facility shall not constitute Senior
Indebtedness to the extent the Indebtedness thereunder is by its express terms
subordinate to any other Indebtedness of the Company. Notwithstanding the
foregoing, "Senior Indebtedness" shall not include (i) Indebtedness evidenced by
the Securities, (ii) Indebtedness that is by its terms subordinate or junior in
right of payment to any Indebtedness of the Company, (iii) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of title
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is without recourse to the Company, (iv) Indebtedness
which is represented by Redeemable Capital Stock, (v) any liability for foreign,
federal, state, local or other tax owed or
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owing by the Company to the extent such liability constitutes Indebtedness, (vi)
Indebtedness of the Company to a Subsidiary or any other Affiliate of the
Company or any of such Affiliate's subsidiaries, and (vii) that portion of any
Indebtedness which at the time of issuance is issued in violation of this
Indenture.
"Senior Representative" means the agent, indenture trustee or
other trustee or representative for any Senior Indebtedness.
"Series A Security" has the meaning stated in the first
recital of this Indenture.
"Series B Security" has the meaning stated in the first
recital of this Indenture.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to Section 2.2 of the Registration Rights
Agreement, which covers all of the Registrable Securities (as defined in the
Registration Rights Agreement) on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.9.
"Stated Maturity" when used with respect to any Indebtedness
or any installment of interest thereon means the dates specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest, as the case may be, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
which is by its terms expressly subordinated in right of payment to the
Securities.
"Subsidiary" means any Person, a majority of the equity
ownership or the Voting Stock of which is at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries; provided that (i) any Unrestricted
Subsidiary shall not be deemed a Subsidiary under the Indenture and (ii) any
real estate investment trust in which the Company or any Subsidiary has invested
pursuant to clause (ix) of the definition of "Permitted Investment" shall not be
deemed a Subsidiary under this Indenture.
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"Temporary Cash Investments" means (i) any evidence of
Indebtedness, maturing not more than one year after the date of acquisition,
issued by the United States of America, or an instrumentality or agency thereof,
and guaranteed fully as to principal, premium, if any, and interest by the
United States of America, (ii) any certificate of deposit (or, with respect to
non-U.S. banking institutions, similar instruments) maturing not more than one
year after the date of acquisition, issued by, or time deposit of, a commercial
banking institution that is a member of the Federal Reserve System or a
commercial banking institution organized and located in a country recognized by
the United States of America, in each case, that has combined capital and
surplus and undivided profits of not less than $500,000,000 (or the foreign
currency equivalent thereof), whose debt has a rating, at the time as of which
any investment therein is made, of "P-1" (or higher) according to ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") or any successor rating agency or "A-1" (or
higher) according to Standard & Poor's Rating Group, a division of McGraw Hill,
Inc. ("S&P") or any successor rating agency, (iii) commercial paper, maturing
not more than one year after the date of acquisition, issued by a corporation
(other than an Affiliate or Subsidiary of the Company) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P, (iv) any money market deposit accounts or
demand deposit accounts issued or offered by a domestic commercial bank or a
commercial banking institution organized and located in a country recognized by
the United States of America, in each case having capital and surplus in excess
of $500,000,000 (or the foreign currency equivalent thereof); provided that the
short-term debt of such commercial bank has a rating, at the time of Investment,
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
and (v) any other Investments, that at any one time do not exceed $100,000 in
the aggregate, issued or offered by any domestic commercial bank or any
commercial banking institution organized and located in a country recognized by
the United States of America.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, or any successor statute. References to sections of the Trust
Indenture Act include successor statute sections dealing with the same subject.
"13% Notes" means the Senior Subordinated Notes Due 2003 of
the Company.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that exists on the Issue Date and is so designated as an Unrestricted
Subsidiary on a schedule attached to the Indenture, (ii) any subsidiary of the
Company that at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of Directors, as provided below), and (iii) any
subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any subsidiary of the Company (including any newly acquired or newly formed
subsidiary) to be an
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Unrestricted Subsidiary if all of the following conditions apply: (a) neither
the Company nor any of its Subsidiaries provides credit support for Indebtedness
of such Unrestricted Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness), (b) such Unrestricted Subsidiary is
not liable, directly or indirectly, with respect to any Indebtedness other than
Unrestricted Subsidiary Indebtedness or the Bank Credit Facility, (c) any
Investment by the Company in such Unrestricted Subsidiary made as a result of
designating such subsidiary an Unrestricted Subsidiary shall not violate the
provisions described under Section 10.16 and such Unrestricted Subsidiary is not
party to any agreement, contract, arrangement or understanding at such time with
the Company or any other subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such other subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company or, in the event such
condition is not satisfied, the value of such agreement, contract, arrangement
or understanding to such Unrestricted Subsidiary shall be deemed an Investment,
and (d) such Unrestricted Subsidiary does not own any Capital Stock in any
subsidiary of the Company which is not simultaneously being designated an
Unrestricted Subsidiary. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complies with the foregoing conditions and any Investment by the
Company in such Unrestricted Subsidiary shall be deemed a Restricted Payment on
the date of designation in an amount equal to the greater of (1) the net book
value of such Investment or (2) the Fair Market Value of such Investment as
determined in good faith by the Board of Directors. The Board of Directors may
designate any Unrestricted Subsidiary as a Subsidiary; provided (i) that if such
Unrestricted Subsidiary has any Indebtedness, that immediately after giving
effect to such designation, the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness or Permitted Subsidiary
Indebtedness) pursuant to the restrictions under Section 10.18, and (ii) that
all Indebtedness of such Subsidiary shall be deemed to be incurred on the date
such Unrestricted Subsidiary becomes a Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted
Subsidiary means Indebtedness of such Unrestricted Subsidiary (a) as to which
neither the Company nor any Subsidiary is directly or indirectly liable (by
virtue of the Company or any such Subsidiary being the primary obligor on,
guarantor of, or otherwise liable in any respect to, such Indebtedness), and (b)
which, upon the occurrence of a default with respect thereto, does not result
in, or permit any holder of any Indebtedness of the Company or any Subsidiary to
declare, a default on such Indebtedness of the Company or any Subsidiary or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"Voting Stock" means Capital Stock of the class or classes
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of a corporation (irrespective of whether or not at the
time Capital Stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
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"Wholly-Owned Subsidiary" means a Subsidiary all the Capital
Stock of which (other than qualifying shares, if any) is owned by the Company or
another Wholly-Owned Subsidiary.
Section 1.2. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Act" 1.5
"Agent Members" 3.6
"Change of Control Offer" 10.13
"Change of Control Purchase Date" 10.13
"Change of Control Purchase Notice" 10.13
"Change of Control Purchase Price" 10.13
"covenant defeasance" 4.3
"Defaulted Interest" 3.9
"defeasance" 4.2
"Defeasance Redemption Date" 4.4
"Defeased Securities" 4.1
"Excess Proceeds" 10.12
"Global Securities" 2.1
"incur" 10.8
"Incurrence Date" 10.8
"Initial Period" 13.3
"Non-Global Purchasers 2.1
"Non-payment Default" 13.3
"Offer" 10.12
"Offer Date" 10.12
"Offered Price" 10.12
"Offshore Global Security" 2.1
"Offshore Securities Exchange Date" 2.1
"Pari Passu Debt Amount" 10.12
"Payment Blockage Period" 13.3
"Payment Default" 13.3
"Pari Passu Offer" 10.12
"Permanent Offshore Physical Securities" 2.1
"Permitted Junior Securities" 13.2
"Permitted Payment" 10.9
"Physical Securities" 3.6
"Private Placement Legend" 2.2
"refinancing" 10.9
"Regulation S" 2.1
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"Required Filing Dates" 10.17
"Restricted Payments" 10.9
"Rule 144A" 2.1
"Security Amount" 10.12
"Security Register" 3.5
"Security Registrar" 3.5
"Special Payment Date" 3.9
"Surviving Entity" 8.1
"U.S. Global Security" 2.1
"U.S. Government Obligations" 4.4
"U.S. Physical Securities 2.1
Section 1.3. Compliance Certificates and Opinions.
-------------------------------------
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company and each
other obligor on the Securities shall furnish to the Trustee an Officers'
Certificate in a form and substance reasonably acceptable to the Trustee stating
that all conditions precedent, if any, provided for in this Indenture (including
any covenant compliance which constitutes a condition precedent) relating to the
proposed action have been complied with and an Opinion of Counsel in a form and
substance reasonably acceptable to the Trustee stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that, in the case of any such application or request as to which the
furnishing of any certificates and/or opinions is specifically required by any
provision of this Indenture, relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(a) a statement to the effect that each individual or firm
signing such certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(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 to the effect that, in the opinion of each
such individual or such firm, he has made such examination or investigation as
is necessary to enable him or them to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual or such firm, such condition or covenant has been complied with.
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Section 1.4. Form of Documents Delivered to Trustee.
---------------------------------------
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to such matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or
other obligor on the Securities may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any certificate or
opinion of such an officer or of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company or other obligor on the Securities with
respect to such factual matters and which contains a statement to the effect
that the information with respect to such factual matters is in the possession
of the Company or other obligor on the Securities, unless such officer or
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous. Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required, and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Any certificate or opinion of an officer of the Company or
other obligor on the Securities may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of, or representations by, an
accountant or firm of accountants in the employ of the Company, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate or opinion may be based are erroneous. Any
certificate or opinion of any independent firm of public accountants filed with
the Trustee shall contain a statement that such firm is independent with respect
to the Company.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
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Section 1.5. Acts of Holders.
----------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The ownership of Securities shall be proved by the
Security Register.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holder of any Security shall bind every
future Holder of the same Security or the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done by the Trustee, any Paying Agent
or the Company or any other obligor on the Securities in reliance thereon,
whether or not notation of such action is made upon such Security.
(d) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
Section 1.6. Notices, etc., to Trustee and the Company.
------------------------------------------
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any other
obligor on the Securities shall be sufficient for every purpose hereunder if
made, given, furnished or filed, in writing, by first-class mail postage prepaid
(return receipt requested) or delivered in person or by recognized overnight
courier to or with the Trustee at its Corporate Trust Office, Attention:
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Corporate Trust Administration or at any other address furnished in writing
prior thereto to the Holders, the Company or any other obligor on the Securities
by the Trustee; or
(b) the Company shall be sufficient for every purpose (except
as provided in Section 5.1(c)) hereunder if made, given, furnished or filed, in
writing, by first-class mail postage prepaid (return receipt requested) or
delivered in person or by recognized overnight courier, to or with the Company
addressed to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer, or at any other address previously furnished
in writing to the Trustee by the Company.
Section 1.7. Notice to Holders; Waiver.
--------------------------
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at such Holder's address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause, it shall be impracticable to mail notice of any
event as required by any provision of this Indenture, then any method of giving
such notice as shall be reasonably satisfactory to the Trustee shall be deemed
to be a sufficient giving of such notice.
Section 1.8. Conflict with Trust Indenture Act.
----------------------------------
If and to the extent that any provision hereof limits,
qualifies or conflicts with any provision of the Trust Indenture Act or another
provision which is required or deemed to be included in this Indenture by any of
the provisions of the Trust Indenture Act, the provision or requirement of the
Trust Indenture Act shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, such provision of the Trust Indenture Act shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
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Section 1.9. Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Company
and any other obligor on the Securities shall bind their successors and assigns,
whether so expressed or not.
Section 1.11. Separability Clause.
--------------------
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.12. Benefits of Indenture.
----------------------
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent, the Holders and the holders of Senior
Indebetedness) any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 1.13. GOVERNING LAW.
--------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 1.14. Legal Holidays.
---------------
In any case where any Interest Payment Date, Redemption Date,
Maturity or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at
Maturity or the Stated Maturity, and no interest shall accrue with respect to
such payment for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case may be, to the next
succeeding Business Day.
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Section 1.15. Schedules.
----------
All schedules attached hereto are by this reference made a
part with the same effect as if herein set forth in full.
Section 1.16. Counterparts.
-------------
This Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
Section 1.17. No Recourse against Others.
---------------------------
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting any of
the Securities waives and releases all such liability. Such waiver may not be
effective to waive liabilities under federal securities laws and it is the view
of the SEC that such a waiver is against public policy.
ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally.
----------------
The Securities and the Trustee's certificate of authentication
thereon shall be in substantially the forms set forth in this Article II, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted hereby and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange, any
organizational document or governing instrument or applicable law or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Initial Securities offered and sold in reliance on Rule 144A
under the Securities Act ("Rule 144A") shall be issued initially in the form of
one or more permanent global Securities
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substantially in the form set forth in Section 2.2 (the "U.S. Global Security")
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Initial Securities held by QIBs who elect to take physical
delivery of their certificates instead of holding their interest through the
U.S. Global Security (collectively, the "Non-Global Purchasers"), will be in
registered form without interest coupons (the "U.S. Physical Securities"). Upon
the transfer of U.S. Physical Securities, which were initially issued to a Non-
Global Purchaser, to a QIB, such U.S. Physical Securities will, unless the
transferee requests otherwise or the U.S. Global Security has previously been
exchanged in whole for U.S. Physical Securities, be exchanged for an interest in
the U.S. Global Security.
Initial Securities offered and sold in reliance on Regulation
S under the Securities Act ("Regulation S") shall be issued initially in the
form of a global note certificate substantially in the form set forth in Section
2.2 (the "Offshore Global Security" and, together with the U.S. Global Security,
the "Global Securities"). The Offshore Global Security will be deposited with
the Trustee, as custodian for the Depositary, and will be registered in the name
of the Depositary until the later of the completion of the distribution of the
Initial Securities and the termination of the "restricted period" (as defined in
Regulation S) with respect to the offer and sale of the Initial Securities (the
"Offshore Securities Exchange Date"). Prior to the Offshore Securities Exchange
Date, transfers of beneficial interests in the Offshore Global Security can only
be effected through the Depositary in accordance with the requirements of
Section 3.7 hereof. At any time following the Offshore Securities Exchange Date
(but in no event before such date), upon receipt by the Trustee and the Company
of a certificate substantially in the form of Exhibit A hereto, the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
permanent certificated Securities in registered form substantially in the form
set forth in Section 2.2 (the "Permanent Offshore Physical Securities"), in
exchange for the surrender of a Holder's beneficial ownership interest in the
Offshore Global Security of like tenor and amount.
Section 2.2. Form of Face of Security.
-------------------------
(a) The form of the face of any Series A Securities
authenticated and delivered hereunder shall be substantially as follows:
Unless and until (i) an Initial Security is sold under an
effective Registration Statement or (ii) an Initial Security is exchanged for a
Series B Security in connection with an effective Registration Statement, in
each case pursuant to the Registration Rights Agreement, then (A) the U.S.
Global Security and each U.S. Physical Security shall bear the legend set forth
below (the "Private Placement Legend") on the face thereof and (B) the Offshore
Global Security and each Permanent Offshore Physical Security shall bear the
Private Placement Legend on the face thereof until at least 41 days after the
Issue Date.
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")) OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION PURSUANT TO
RULE 903 OR 904 OF REGULATION S, (2) AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE UNITED
STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN
OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPHS (A)(1), (A)(2), (A)(3) OR (A)(7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN
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ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. AS USED HEREIN, THE TERMS "UNITED STATES," "OFFSHORE
TRANSACTION," AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[Each global security, whether or not an initial security,
shall also bear the following legend on the face thereof:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.6 AND 3.7 OF THE
INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
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REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
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BALLY TOTAL FITNESS HOLDING CORPORATION
--------------------
9-7/8% SENIOR SUBORDINATED NOTES DUE 2007, SERIES A
CUSIP NO. __________
No. ________________ $___________________
Bally Total Fitness Holding Corporation, a Delaware
corporation (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to or registered assigns, the principal sum of ______ United
States dollars on October 15, 2007, at the office or agency of the Company
referred to below, and to pay interest thereon from October 7, 1997, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on April 15 and October 15 in each year, commencing
April 15, 1998 at the rate of 9-7/8% per annum, subject to adjustments as
described in the second following paragraph, in United States dollars, until the
principal hereof is paid or duly provided for. Interest shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Series A Security is entitled to the
benefits of the Registration Rights Agreement (the "Registration Rights
Agreement") among the Company and the Initial Purchasers, dated October 7, 1997,
pursuant to which, subject to the terms and conditions thereof, the Company is
obligated to consummate the Exchange Offer pursuant to which the Holder of this
Security shall have the right to exchange this Security for the Company's 9-7/8%
Senior Subordinated Notes due 2007, Series B (herein called the "Series B
Securities") in like principal amount as provided therein. The Series A
Securities and the Series B Securities are together referred to as the
"Securities." The Series A Securities rank pari passu in right of payment with
the Series B Securities.
In the event that (a) the Exchange Offer Registration
Statement is not filed with the SEC on or prior to the 30th day following the
date of original issue of the Series A Securities, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the 90th
day following the date of original issue of the Series A Securities, or (c) the
Exchange Offer is not consummated on or prior to the 120th day following the
date of original issue of the Series A Securities or a Shelf Registration
Statement is not declared effective on or prior to the 120th day following the
date of original issue of the Series A Securities (or, if a Shelf Registration
Statement is required to be filed because of the request by any Initial
Purchaser, 30 days following the request by any such Initial Purchaser that the
Company file the Shelf Registration Statement) (each such event referred to in
clauses (a) through (c) above, a "Registration Default"), the interest rate
borne by the Series A Securities (except in the case of clause (c), in which
case only the Series A Securities which have not been exchanged in the Exchange
Offer) shall be increased by an amount equal to one-quarter of one percent
(0.25%) per annum upon the occurrence of any
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Registration Default, which rate (as increased as aforesaid) will increase by an
additional one quarter of one percent (0.25%) each 90-day period that such
additional interest continues to accrue under any such circumstance, with an
aggregate maximum increase in the interest rate equal to one percent (1%) per
annum. Following the cure of all Registration Defaults the accrual of additional
interest will cease and the interest rate will revert to the original rate.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or any Predecessor Security) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 1 or October 1 (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series A Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Person in whose name this Security
(or any Predecessor Security) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of, premium, if any, and interest on,
this Security, and exchange or transfer of the Security, will be made at the
office or agency of the Company in The City of New York maintained for that
purpose (which initially will be the Corporate Trust Office of the Trustee), or
at such other office or agency as may be maintained for such purpose, 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; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature
of an authorized signer, this Security shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed by the manual or facsimile signature of its authorized officers
and its corporate seal to be affixed or reproduced hereon.
-35-
42
BALLY TOTAL FITNESS HOLDING CORPORATION
By:
--------------------------------
Title:
-----------------------------
Attest:
---------------------------
Authorized Officer
-36-
43
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 9-7/8% Senior Subordinated Notes due 2007,
Series A referred to in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------
Authorized Signer
Dated:
-37-
44
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 10.12 or Section 10.13, as applicable, of the Indenture,
check the Box: [ ].
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 10.12 or Section 10.13 as applicable, of the
Indenture, state the amount (in original principal amount): $_________________
Date:_______________ Your Signature:____________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:_______________________________
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
-38-
45
(b) The form of the face of any Series B Securities
authenticated and delivered hereunder shall be substantially as follows:
[Each global security, whether or not an initial security,
shall also bear the following legend on the face thereof:]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A
SUCCESSOR DEPOSITORY. TRANSFERS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.6 AND 3.7 OF THE
INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
-39-
46
BALLY TOTAL FITNESS HOLDING CORPORATION
---------------------
9-7/8% SENIOR SUBORDINATED NOTES DUE 2007, SERIES B
CUSIP NO. __________
No. ________________ $___________________
Bally Total Fitness Holding Corporation, a Delaware
corporation (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _____________ or registered assigns, the principal sum of
______ United States dollars on October 15, 2007, at the office or agency of the
Company referred to below, and to pay interest thereon from October 7, 1997, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on April 15 and October 15 in each year,
commencing April 15, 1998 at the rate of 9-7/8% per annum, in United States
dollars, until the principal hereof is paid or duly provided for; provided that
to the extent interest has not been paid or duly provided for with respect to
the Series A Security exchanged for this Series B Security, interest on this
Series B Security shall accrue from the most recent Interest Payment Date to
which interest on the Series A Security which was exchanged for this Series B
Security has been paid or duly provided for. Interest shall be computed on the
basis of a 360-day year comprised of twelve 30-day months.
This Series B Security was issued pursuant to the Exchange
Offer pursuant to which the Company's 9-7/8% Senior Subordinated Notes due 2007,
Series A (herein called the "Series A Securities") in like principal amount were
exchanged for the Series B Securities. The Series B Securities rank pari passu
in right of payment with the Series A Securities.
In addition, for any period in which the Series A Security
exchanged for this Series B Security was outstanding, in the event that (a) the
Exchange Offer Registration Statement was not filed with the SEC on or prior to
the 30th day following the date of original issue of the Series A Security, (b)
the Exchange Offer Registration Statement was not declared effective on or prior
to the 90th day following the date of original issue of the Series A Security,
or (c) the Exchange Offer was not consummated on or prior to the 120th day
following the date of original issue of the Series A Security or a Shelf
Registration Statement was not declared effective on or prior to the 120th day
following the date of original issue of the Series A Security (or, a Shelf
Registration Statement was required to be filed 30 days following a request by
an Initial Purchaser) (each such event referred to in clauses (a) through (c)
above, a "Registration Default"), the interest rate borne by the Series A
Securities (except in the case of clause (c), in which case only the Series A
Securities which have not been exchanged in the Exchange Offer) was increased by
one-quarter of one percent (0.25%) per annum upon the occurrence of the
Registration Default, which rate (as increased as aforesaid) will increase by an
additional one-quarter of one percent (0.25%) each 90-day period that such
additional interest continues to accrue under any such circumstance, with an
-40-
47
aggregate maximum increase in the interest rate equal to one percent (1%) per
annum. Following the cure of all Registration Defaults the accrual of additional
interest will cease and the interest rate will revert to the original rate;
provided that, to the extent interest at such increased interest rate has been
paid or duly provided for with respect to the Series A Security, interest at
such increased interest rate, if any, on this Series B Security shall accrue
from the most recent Interest Payment Date to which such interest on the Series
A Security has been paid or duly provided for; provided, however, that, if after
any such reduction in interest rate, a different event specified in clause (a),
(b) or (c) above occurs, the interest rate shall again be increased pursuant to
the foregoing provisions.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or any Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 1 or October 1 (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series B Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Person in whose name this Security
(or any Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of, premium, if any, and interest on,
this Security, and exchange or transfer of the Security, will be made at the
office or agency of the Company in The City of New York maintained for such
purpose (which initially will be the Corporate Trust Office of the Trustee), or
at such other office or agency as may be maintained for such purpose, 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; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature
of an authorized signer, this Security shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
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48
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed by the manual or facsimile signature of its authorized officers
and its corporate seal to be affixed or reproduced hereon.
BALLY TOTAL FITNESS HOLDING CORPORATION
By:
--------------------------------
Title:
----------------------------
Attest:
--------------------------
Authorized Officer
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49
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 9-7/8% Senior Subordinated Notes due 2007,
Series B referred to in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------
Authorized Signer
Dated:
-43-
50
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 10.12 or Section 10.13, as applicable, of the Indenture,
check the Box: [ ]
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 10.12 or Section 10.13 as applicable, of the
Indenture, state the amount (in original principal amount): $___________
Date:____________ Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:________________________________
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
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51
Section 2.3. Form of Reverse of Securities.
------------------------------
(a) The form of the reverse of the Series A Securities shall
be substantially as follows:
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% Senior Subordinated Notes due 2007, Series A
This Security is one of a duly authorized issue of Securities
of the Company designated as its 9-7/8% Senior Subordinated Notes due 2007,
Series A (herein called the "Securities"), limited (except as otherwise provided
in the Indenture referred to below) in aggregate principal amount limited to
$225,000,000, issued under and subject to the terms of an indenture (herein
called the "Indenture") dated as of October 7, 1997, between the Company and
First Trust National Association, as trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
The Indenture contains provisions for defeasance at any time
of (a) the entire Indebtedness on the Securities and (b) certain restrictive
covenants and related defaults and Events of Default, in each case upon
compliance with certain conditions set forth therein.
The Securities are subject to redemption at any time on or
after October 15, 2002, at the option of the Company, in whole or in part, on
not less than 30 nor more than 60 days' prior notice to the Holders by
first-class mail, in amounts of $1,000 or an integral multiple thereof, at the
following redemption prices (expressed as percentages of the principal amount),
if redeemed during the 12-month period beginning on October 15, of the years
indicated below:
Redemption
Year Price
---- ----------
2002....................................... 104.938%
2003....................................... 103.292%
2004....................................... 101.646%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant Regular Record Dates or Special Record
Dates to receive interest due on an Interest Payment Date).
-45-
52
If less than all of the Securities or Series B Securities are
to be redeemed, the Trustee shall select the Securities and Series B Securities
or portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable
Upon the occurrence of a Change of Control, each Holder may
require the Company to purchase such Holder's Securities in whole or in part in
integral multiples of $1,000, at a purchase price in cash in an amount equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of purchase, pursuant to a Change of Control Offer in accordance
with the procedures set forth in the Indenture.
In addition, at any time on or prior to October 15, 2000, the
Company may, at its option, use the net proceeds of one or more Public Equity
Offerings to redeem up to an aggregate of 35% of the aggregate principal amount
of Securities originally issued under the Indenture at a redemption price equal
to 109.875% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Redemption Date; provided that at least
$146,250,000 aggregate principal amount of Securities and Series B Securities
remains outstanding immediately after the occurrence of such redemption. In
order to effect the foregoing redemption, the Company must mail a notice of
redemption no later than 60 days after the related Public Equity Offering and
must consummate such redemption within 90 days of the closing of the Public
Equity Offering.
Under certain circumstances, in the event the Net Cash
Proceeds received by the Company from any Asset Sale (which proceeds are not
used to permanently repay any Senior Indebtedness or invested in properties or
other assets that replace the properties and assets that were the subject of the
Asset Sale or which will be used in the businesses of the Company or its
Subsidiaries existing on the date of the Indenture or in businesses reasonably
related or complementary thereto) exceeds a specified amount, the Company will
be required to set aside such proceeds in a separate account pending an offer by
the Company to apply such proceeds to the repayment of the Securities and
certain Indebtedness ranking pari passu in right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
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53
If an Event of Default shall occur and be continuing, the
principal amount of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture. The Securities are not
entitled to the benefit of any sinking fund.
The Indenture permits, with certain exceptions (including
certain amendments permitted without the consent of any Holders) as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders under the Indenture and
the Securities at any time by the Company and the Trustee with the consent of
the Holders of a specified percentage in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities and Series B Securities at the time Outstanding, on behalf of the
Holders of all the Securities and Series B Securities, to waive compliance by
the Company with certain provisions of the Indenture and the Securities and
certain past Defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
wavier is made upon this Security.
The Securities are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, of all Senior Indebtedness of the Company
whether outstanding on the date hereof or thereafter created, incurred, assumed
or guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustees his
attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Company
or any other obligor on the Securities (in the event such other obligor is
obligated to make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on, this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
If this Series A Security is in certificated form, then as
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable on the Security Register of the
Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York or at such other office or agency of the Company as may be maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or its attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations
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and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
If this Series A Security is in certificated form, then as
provided in the Indenture and subject to certain limitations therein set forth,
the Holder, provided it is a Qualified Institutional Buyer, may exchange this
Series A Security for a Book-Entry Security by instructing the Trustee (by
completing the Transferee Certificate in the form in Appendix I) to arrange for
such Series A Security to be represented by a beneficial interest in a Global
Security in accordance with the customary procedures of the Depository unless
the Company has elected not to issue a Global Security.
If this Series A Security is a Global Security, it is
exchangeable for a Series A Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in a Global
Security if (x) the Depository notifies the Company that it is unwilling or
unable to continue as depository for a Global Security and a successor
depositary is not appointed by the Company within 90 days or (y) there shall
have occurred and be continuing an Event of Default and the Security Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series A Securities in the name of,
and cause the same to be delivered to, such Person or Persons (or the nominee of
any thereof). All such certificated Series A Securities would be required to
include the Private Placement Legend.
Series A Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series A Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or
15(d) of the Exchange Act, upon the written request of a Holder of a Series A
Security, the Company will promptly furnish or cause to be furnished such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) to such Holder or to a prospective
purchaser of such Series A Security who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the meaning
of Rule 144A under the Securities Act, as the case may be, in order to permit
compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
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Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF).
All terms used in this Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
[The Transferee Certificate, in the form of Appendix I hereto,
will be attached to the Series A Security.]
(b) The form of the reverse of the Series B Securities shall
be substantially as follows:
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% Senior Subordinated Notes due 2007, Series B
This Security is one of a duly authorized issue of Securities
of the Company designated as its 9-7/8% Senior Subordinated Notes due 2007,
Series B (herein called the "Securities"), limited (except as otherwise provided
in the Indenture referred to below) in aggregate principal amount limited to
$225,000,000, issued under and subject to the terms of an indenture (herein
called the "Indenture") dated as of October 7, 1997, between the Company and
First Trust National Association, as trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
The Indenture contains provisions for defeasance at any time
of (a) the entire Indebtedness on the Securities and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance with certain conditions set forth therein.
The Securities are subject to redemption at any time on or
after October 15, 2002, at the option of the Company, in whole or in part, on
not less than 30 nor more than 60 days' prior notice to the Holders by
first-class mail, in amounts of $1,000 or an integral multiple
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thereof, at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning October 15
of the years indicated below:
Redemption
Year Price
---- ----------
2002...................................... 104.938%
2003...................................... 103.292%
2004...................................... 101.646%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant Regular Record Dates or Special Record
Dates to receive interest due on an Interest Payment Date).
If less than all of the Securities or Series A Securities are
to be redeemed, the Trustee shall select the Securities and Series A Securities
or portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, each Holder may
require the Company to purchase such Holder's Securities in whole or in part in
integral multiples of $1,000, at a purchase price in cash in an amount equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of purchase, pursuant to a Change of Control Offer and in accordance
with the procedures set forth in the Indenture.
In addition, at any time on or prior to October 15, 2000, the
Company may, at its option, use the net proceeds of one or more Public Equity
Offerings to redeem up to an aggregate of 35% of the aggregate principal amount
of Securities originally issued under the Indenture at a redemption price equal
to 109.875% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Redemption Date; provided that at least
$146,250,000 aggregate principal amount of Securities and Series A Securities
remains outstanding immediately after the occurrence of such redemption. In
order to effect the foregoing redemption, the Company must mail a notice of
redemption no later than 60 days after the related Public Equity Offering and
must consummate such redemption within 90 days of the closing of the Public
Equity Offering.
Under certain circumstances, in the event the Net Cash
Proceeds received by the Company from any Asset Sale (which proceeds are not
used to permanently repay any Senior Indebtedness or invested in properties or
other assets that replace the properties and assets that were the subject of the
Asset Sale or which will be used in the businesses of the Company or its
Subsidiaries existing on the date of the Indenture or in businesses reasonably
related or complementary thereto) exceeds a specified amount, the Company will
be required to set aside such proceeds in a separate account pending an offer by
the Company to apply such proceeds to
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the repayment of the Securities and certain Indebtedness ranking pari passu in
right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal amount of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture. The Securities are not
entitled to the benefit of any sinking fund.
The Indenture permits, with certain exceptions (including
certain amendments permitted without the consent of any Holders) as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders under the Indenture and
the Securities at any time by the Company and the Trustee with the consent of
the Holders of a specified percentage in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities and Series A Securities at the time Outstanding, on behalf of the
Holders of all the Securities and Series A Securities, to waive compliance by
the Company with certain provisions of the Indenture and the Securities and
certain past Defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in
any other manner, of all Senior Indebtedness of the Company whether outstanding
on the date hereof or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such purpose.
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No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company or any
other obligor on the Securities (in the event such other obligor is obligated to
make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, and premium, if any, and interest on,
this Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
If this Series B Security is in certificated form, then as
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Series B Security is registrable on the Security Register
of the Company, upon surrender of this Series B Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Series B Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Series B Security is a U.S. Global Security, it is
exchangeable for a Series B Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in the U.S. Global
Security if (x) the Depository notifies the Company that it is unwilling or
unable to continue as depository for the U.S. Global Security and a successor
depositary is not appointed by the Company within 90 days or (y) there shall
have occurred and be continuing an Event of Default and the Security Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series B Securities in the name of,
and cause the same to be delivered to, such Person or Persons (or the nominee of
any thereof).
Series B Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series B Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
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THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF).
All terms used in this Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
[The Transferee Certificate, in the form of Appendix II
hereto, will be attached to the Series B Security.]
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms.
----------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $225,000,000 in
principal amount of Securities, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 9.6, 10.12,
10.13 or 11.8.
The Securities shall be known and designated as the "9-7/8%
Senior Subordinated Notes due 2007" of the Company. The Stated Maturity of the
Securities shall be October 15, 2007, and the Securities shall each bear
interest at the rate of 9-7/8% per annum, as such interest rate may be adjusted
as set forth in the Securities, from October 7, 1997, or from the most recent
Interest Payment Date to which interest has been paid, payable semiannually on
April 15 and October 15 in each year, commencing April 15, 1998, until the
principal thereof is paid or duly provided for. Interest on any overdue
principal, interest (to the extent lawful) or premium, if any, shall be payable
on demand.
The principal of, premium, if any, and interest on, the
Securities shall be payable and the Securities will be exchangeable and
transferable at an office or agency of the Company in The City of New York
maintained for such purposes (which initially will be the Corporate Trust Office
of the Trustee) or at such other office or agency as may be maintained for such
purpose; provided, however, that payment of interest may be made at the option
of the Company by check mailed to addresses of the Person entitled thereto as
such addresses shall appear on the Security Register.
For all purposes hereunder, the Series A Securities and the
Series B Securities will be treated as one class and are together referred to as
the "Securities." The Series A Securities rank pari passu in right of payment
with the Series B Securities.
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The Securities shall be subject to repurchase by the Company
pursuant to an Offer as provided in Section 10.12.
Holders shall have the right to require the Company to
purchase their Securities, in whole or in part, in the event of a Change of
Control pursuant to Section 10.13.
The Securities shall not be entitled to the benefits of any
sinking fund,
The Securities shall be redeemable as provided in Article XI
and in the Securities.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article IV.
Section 3.2. Denominations.
--------------
The Securities shall be issuable only in fully registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
Section 3.3. Execution, Authentication, Delivery and Dating.
-----------------------------------------------
The Securities shall be executed on behalf of the Company by
one of its Chairman of the Board, its President, its Chief Executive Officer,
its Chief Financial Officer or one of its Vice Presidents and attested by its
Secretary or one of its Assistant Secretaries. The signatures of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery such
Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of
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one of its duly authorized signataries, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture.
In case the Company or any of its Subsidiaries, pursuant to
Article VIII, shall, in a single transaction or through a series of related
transactions, be consolidated or merged with or into any other Person or shall
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person, and the successor
Person resulting from such consolidation or surviving such merger, or into which
the Company shall have been merged, or the successor Person which shall have
participated in the sale, assignment, conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article VIII, any of the Securities authenticated
or delivered prior to such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section 3.3 in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities on behalf of the Trustee. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with the Company and its Affiliates.
If an officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates such Security such Security
shall be valid nevertheless.
Section 3.4. Temporary Securities.
---------------------
Pending the preparation of definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten or otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Securities in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
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If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 10.2, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.
Section 3.5. Registration, Registration of Transfer and
------------------------------------------
Exchange.
---------
The Company shall cause the Trustee to keep, so long as it is
the Security Registrar, at the Corporate Trust Office of the Trustee, or such
other office as the Trustee may designate, a register (the register maintained
in such office or in any other office or agency designated pursuant to Section
10.2 being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as the Security Registrar may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee shall initially be the "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided. The Company may change the Security Registrar or appoint one or more
co-Security Registrars without notice.
Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated pursuant to Section 10.2, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of the same series of any authorized denomination or
denominations, of a like aggregate principal amount.
Furthermore, any Holder of the U.S. Global Security or the
Offshore Global Security shall, by acceptance of either such Global Security,
agree that transfers of beneficial interests in such Global Security may be
effected only through a book-entry system maintained by the Holder of such
Global Security (or its agent), and that ownership of a beneficial interest in a
Security shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations, of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, Securities of the same series which the Holder making the exchange
is entitled to receive: provided that no exchange of Series A Securities for
Series B Securities shall occur until an Exchange Offer Registration Statement
shall have been declared effective by the SEC and that the Series A Securities
exchanged for the Series B Securities shall be canceled.
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All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same Indebtedness, and entitled to the same benefits under this Indenture,
as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer, or for exchange, repurchase or redemption, shall (if so required by
the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made to a Holder for any
registration of transfer, exchange or redemption of Securities, except for any
tax or other governmental charge that may be imposed in connection therewith,
other than exchanges pursuant to Sections 3.3, 3.4, 3.5, 9.6, 10.12, 10.13 or
11.8 not involving any transfer.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of the Securities
selected for redemption under Section 11.4 and ending at the close of business
on the day of such mailing or (b) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of Securities being redeemed in part.
Every Security shall be subject to the restrictions on
transfer provided in the legend required to be set forth on the face of each
Security pursuant to Section 2.2, and the restrictions set forth in this Section
3.5, and the Holder of each Security, by such Holder's acceptance thereof (or
interest therein), agrees to be bound by such restrictions on transfer.
The restrictions imposed by this Section 3.5 upon the
transferability of any particular Security shall cease and terminate on (a) the
later of October 7, 1999 or two years after the last date on which the Company
or any Affiliate of the Company was the owner of such Security (or any
predecessor of such Security) or (b) (if earlier) if and when such Security has
been sold pursuant to an effective registration statement under the Securities
Act or transferred pursuant to Rule 144 or Rule 904 under the Securities Act (or
any successor provision), unless the Holder thereof is an affiliate of the
Company, within the meaning of Rule 144 (or such successor provisions). Any
Security as to which such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon surrender of such
Security for exchange to the Security Registrar in accordance with the provision
of this Section 3.5 (accompanied, in the event that such restrictions on
transfer have terminated pursuant to Rule 144 or Rule 904 (or any successor
provision), by an Opinion of Counsel satisfactory to the Company and the
Trustee, to the effect that the transfer of such Security has been made in
compliance with Rule 144 or Rule 904 (or any such successor provision)), be
exchanged for a new Security, of like tenor and aggregate principal amount,
which shall not bear the Private Placement Legend. The
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Company shall inform the Trustee of the effective date of any Registration
Statement registering the Securities under the Securities Act no later than two
Business Days after such effective date.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any U.S. Global Security or Offshore Global Security,
whether pursuant to this Section 3.5, Section 3.4, 3.8, 9.6 or 11.8 or
otherwise, shall also be a U.S. Global Security or Offshore Global Security, as
the case may be, and shall bear the legend specified in Section 2.2.
Section 3.6. Book-Entry Provisions for Global Securities.
--------------------------------------------
(a) The Global Securities initially shall (i) be registered in
the name of the Depositary, (ii) be deposited with, or on behalf of, the
Depositary or with the Trustee as custodian for the Depositary and (iii) bear
legends as set forth in Section 2.2.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or the Trustee as its custodian,
or under the Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary, or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 3.7. Beneficial owners may
obtain U.S. Physical Securities in exchange for their beneficial interests in
the U.S. Global Security upon request in accordance with the Depositary's and
the Security Registrar's procedures. In addition, at any time following the
Offshore Securities Exchange Date, upon receipt by the Trustee and the Company
of a certificate substantially in the Form of Exhibit A hereto, the Company
shall execute, and the Trustee shall authenticate and deliver to beneficial
owners, in exchange for their beneficial interest in the Offshore Global
Security, Permanent Offshore Physical Securities (together with the U.S.
Physical Securities, the "Physical Securities"). In connection with the
execution, authentication and delivery of either of such Physical Securities,
the Security Registrar shall reflect on its books and records a decrease in the
principal amount of the relevant Global Security equal to the principal amount
of such Physical Securities and the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities having an equal
aggregate principal amount.
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In addition, Physical Securities shall be issued to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for a Global Security and a successor
depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Security Registrar
has received a request from the Depositary.
(c) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (b) of this
Section to beneficial owners who are required to hold Physical Securities, the
Security Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver one or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to subsection (b) of this Section, such
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary, in exchange
for its beneficial interest in the U.S. Global Security or Offshore Global
Security, as the case may be, an equal aggregate principal amount of U.S.
Physical Securities or Permanent Offshore Physical Securities, as the case may
be, of authorized denominations.
(e) Any Physical Security delivered in exchange for an
interest in Global Securities pursuant to subsection (c) or subsection (d) of
this Section shall, except as otherwise provided by paragraph (a)(i)(x) and
paragraph (f) of Section 3.7, bear the Private Placement Legend.
(f) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
Section 3.7. Special Transfer Provisions.
----------------------------
Unless and until (i) an Initial Security is sold under an
effective Registration Statement, or (ii) an Initial Security is exchanged for a
Series B Security in connection with the Exchange Offer, in each case pursuant
to the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to non-QIB institutional "accredited investors"
(as defined in Rule 501(a) (1), (2), (3) and (7) under the Securities Act). The
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to an institutional
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"accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) which is not a QIB (excluding Non-U.S.
Persons):
(i) The Security Registrar shall register the
transfer of any Initial Security whether or not such Initial
Security bears the Private Placement Legend, if (x) the
requested transfer is at least two years after the Issue Date
of the Initial Securities or (y) the proposed transferee has
delivered to the Security Registrar a certificate
substantially in the form of Exhibit B hereto.
(ii) If the proposed transferor is an Agent Member
holding a beneficial interest in a Global Security, upon
receipt by the Security Registrar of (x) the documents, if
any, required by paragraph (i) and (y) instructions given in
accordance with the Depositary's and the Security Registrar's
procedures therefor, the Security Registrar shall reflect on
its books and records the date and a decrease in the principal
amount of the applicable Global Security in an amount equal to
the principal amount of the beneficial interest in the Global
Security transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S.
Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of an Initial Security
to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of
Physical Securities, the Security Registrar shall register the
transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of
Initial Security stating, or has otherwise advised the Company
and the Security Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to the
transferee who has signed the certification provided for on
the form of Initial Security, stating, or has otherwise
advised the Company and the Security Registrar in writing,
that it is purchasing the Initial Security for its own account
or an account with respect to which it exercises sole
investment discretion and that it, or the person on whose
behalf it is acting with respect to any such account, is a QIB
and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant
to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member,
and the Initial Security to be transferred consists of
Physical Securities which after transfer are to be evidenced
by an interest in the U.S. Global Security, upon receipt by
the
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Security Registrar of instructions given in accordance with
the Depositary's and the Security Registrar's procedures
therefor, the Security Registrar shall reflect on its books
and records the date and an increase in the principal amount
of the U.S. Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred,
and the Trustee shall cancel the Physical Security so
transferred
(iii) If the Security to be transferred consists of
an interest in the U.S. Global Security, and the proposed
transferee is a Agent Member, the Security Registrar shall
reflect such transfer on its books and records.
(c) Transfers by Non-U.S. Persons on or Prior to November 17,
1997. The following provisions shall apply with respect to registration of any
proposed transfer of an Initial Security by a Non-U.S. Person on or prior to
November 17, 1997:
(i) If the proposed transferee is (x) a Non-U.S.
Person and the proposed transferor has delivered to the
Security Registrar a certificate substantially in the form of
Exhibit C hereto or (y) a QIB and the proposed transferor has
advised the Company and the Security Registrar in writing,
that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has advised the Company and
the Security Registrar in writing, that it is purchasing the
Initial Security for its own account or an account with
respect to which it exercises sole investment discretion and
that it, or the person on whose behalf it is acting with
respect to any such account, is a QIB and is aware that the
sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A, upon instructions given in
accordance with the Depositary's procedures, the Security
Registrar shall register the transfer of any Initial Security
by reflecting on its books and records a decrease in the
principal amount at maturity of the Offshore Global Security
in an amount equal to the beneficial interest in such Global
Security so transferred.
(ii) If the proposed transferee is a Agent Member,
upon receipt by the Security Registrar of instructions given
in accordance with the Depositary's and the Security
Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and an increase in
the principal amount at maturity of the U.S. Global Security
in an amount equal to the principal amount of the beneficial
interest in the Offshore Global Security to be transferred,
and the Trustee shall decrease the principal amount at
maturity of the Offshore Global Security represented by the
beneficial interest therein so transferred.
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(d) Transfers by Non-U.S. Persons on or after November 17,
1997. The following provisions shall apply with respect to any transfer of an
Initial Security by a Non-U.S. Person on or after November 17, 1997:
(i) If the Initial Security to be transferred is a
Permanent Offshore Physical Security, the Security Registrar
shall register such transfer.
(ii) If the proposed transferee is an Agent Member,
upon receipt by the Security Registrar of instructions given
in accordance with the Depositary's and the Security
Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and an increase in
the principal amount of the U.S. Global Security in an amount
equal to the principal amount of the Permanent Offshore
Physical Security to be transferred, and the Trustee shall
cancel the Permanent Offshore Physical Security so
transferred.
(e) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person:
(i) Prior to November 17, 1997, and subject to (ii)
below, the Security Registrar shall register any proposed
transfer of an Initial Security to a Non-U.S. Person upon
receipt of a certificate substantially in the form of Exhibit
C hereto from the proposed transferor, by reflecting on its
books and records an increase in the principal amount at
maturity of the Offshore Global Security in an amount equal to
the principal amount of the Securities transferred.
(ii) If the proposed transferor is an Agent Member
holding a beneficial interest in the U.S. Global Security,
upon receipt by the Security Registrar of (x) the document, if
any, required by paragraph (i), and (y) instructions in
accordance with the Depositary's and the Security Registrar's
procedures thereof, the Security Registrar shall reflect on
its books and records the date and a decrease in the principal
amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global
Security transferred, and an increase in the same amount to
the principal amount at maturity of the Offshore Global
Security.
(iii) On and after November 17, 1997, and subject to
paragraph (iv) below, the Security Registrar shall register
any proposed transfer to any Non-U.S. Person (x) if the
Initial Security to be transferred is a Permanent Offshore
Physical Security, or (y) if the Initial Security to be
transferred is a U.S. Physical Security or an interest in the
U.S. Global Security, upon receipt of a certificate
substantially in the form of Exhibit C from the proposed
transferor and (z) in the case of any of clause (x) or (y),
the Company shall execute, and the Trustee shall authenticate
and
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deliver, one or more Permanent Offshore Physical Securities of
like tenor and amount.
(iv) If the proposed transferor is an Agent Member
holding a beneficial interest in the U.S. Global Security,
upon receipt by the Security Registrar of (x) the document, if
any, required by paragraph (iii), and (y) instructions in
accordance with the Depositary's and the Security Registrar's
procedures therefor, the Security Registrar shall reflect on
its books and records the date and a decrease in the principal
amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global
Security to be transferred and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more
Permanent Offshore Physical Securities of like tenor and
amount.
(f) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Securities not bearing the Private
Placement Legend, the Security Registrar shall deliver Securities that do not
bear the Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Securities bearing the Private Placement Legend, the Security
Registrar shall deliver only Securities that bear the Private Placement Legend
unless either (i) the circumstances contemplated by paragraphs (a)(i)(x), (d)(i)
or (e)(iii) of this Section 3.7 exist or (ii) there is delivered to the Security
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Security Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 3.6 or
this Section 3.7. The Company shall have the right to inspect and make copies of
all such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Security Registrar.
Section 3.8. Mutilated, Destroyed, Lost and Stolen Securities.
-------------------------------------------------
If (a) any mutilated Security is surrendered to the Trustee,
or (b) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, any other obligor on the Securities and the Trustee, such security or
indemnity, in each case, as may be required by them to save each of them
harmless, then, in the absence of notice to the Company, any other obligor on
the Securities or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and
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upon a Company Request the Trustee shall authenticate and make available for
delivery, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a replacement Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this
Section, the Company may require the payment of a sum sufficient to pay all
documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company and any other obligor on the
Securities, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.9. Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Interest on any Security which is payable, and is punctually
paid or duly provided for, on the Stated Maturity of such interest shall be paid
to the Person in whose name the Security (or any Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
payment.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on the Stated Maturity of such interest,
and interest on such defaulted interest at the then applicable interest rate
borne by the Securities, to the extent lawful (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest"), shall
forthwith cease to be payable to the Holder on the Regular Record Date, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or an relevant
Predecessor Securities) are registered at the close of business on a Special
Record Date for the Payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
(not less than 30
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days after such notice) of the proposed payment (the "Special Payment Date"),
and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the Special Payment Date, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted Interest
as provided in this Subsection. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the Special Payment Date and
not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company in writing of
such Special Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at its address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date and Special Payment Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities are registered on such Special Record Date
and shall no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this Subsection, such payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.9, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 3.10. CUSIP Numbers.
--------------
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and the Company, or the Trustee on behalf of the
Company, shall use CUSIP numbers in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice shall state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption or
exchange and that reliance may be placed only on the other identification
numbers printed on the Securities; and provided further, however, that failure
to use CUSIP numbers in any notice of redemption or exchange shall not affect
the validity or sufficiency of such notice.
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Section 3.11. Persons Deemed Owners.
----------------------
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of, premium, if
any and (subject to Section 3.9) interest on, such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 3.12. Cancellation.
-------------
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.12, except as expressly
permitted by this Indenture. If requested by the Company, all canceled
Securities held by the Trustee shall be returned to the Company. The Trustee
shall provide the Company a list of all Securities that have been canceled from
time to time as requested by the Company.
Section 3.13. Computation of Interest.
------------------------
Interest on the Securities shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.1. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
-----------
The Company may, at its option by Board Resolution, at any
time, with respect to the Securities, elect to have either Section 4.2 or
Section 4.3 be applied to all of the Outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this
Article IV.
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Section 4.2. Defeasance and Discharge.
-------------------------
Upon the Company's exercise under Section 4.1 of the option
applicable to this Section 4.2, the Company and any other obligor on the
Securities, if any, shall be deemed to have been discharged from its obligations
with respect to the Defeased Securities on the date the conditions set forth in
Section 4.4 below are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company and any other obligor on the Securities
shall be deemed to have paid and discharged the entire Indebtedness represented
by the Defeased Securities, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 4.5 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 4.4 and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest
on, such Securities, when such payments are due, (b) the Company's obligations
with respect to such Defeased Securities under Sections 3.4, 3.5, 3.8, 10.2 and
10.3, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
6.7, and (d) this Article IV. Subject to compliance with this Article IV, the
Company may exercise its option under this Section 4.2 notwithstanding the prior
exercise of its option under Section 4.3 with respect to the Securities.
Section 4.3. Covenant Defeasance.
--------------------
Upon the Company's exercise under Section 4.1 of the option
applicable to this Section 4.3, the Company and any other obligor on the
Securities shall be released from its obligations under any covenant or
provision contained or referred to in Sections 10.4 through 10.18, inclusive,
and the provisions of Article VIII with respect to the Defeased Securities on
and after the date the conditions set forth in Section 4.4 below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Securities shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company and
any other obligor on the Securities may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or Article, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in
any such Section or Article 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 Sections 5.1(c), (d), (e) or (f), but, except as specified in
this Indenture, the remainder of this Indenture and such Defeased Securities
shall be unaffected thereby. In the event covenant defeasance occurs, the Events
of
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Default specified in Sections 5.1(e) and (f) will no longer constitute Events of
Default with respect to the Securities.
Section 4.4. Conditions to Defeasance or Covenant Defeasance.
------------------------------------------------
The following shall be the conditions to application of either
Section 4.2 or Section 4.3 to the Securities to be defeased:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, (a) United States
dollars in an amount, (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms and with no further reinvestment will provide, not later than
one day before the due date of any payment, money in an amount, or (c) a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants or a nationally
recognized investment banking firm expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee to pay and discharge, the principal of, premium, if any, and
interest on, the Securities to be defeased, on the Stated Maturity of such
principal or interest (or on any date after October 15, 2002 (such date being
referred to as the "Defeasance Redemption Date") if at or prior to electing to
exercise either its option applicable to Section 4.2 or its option applicable to
Section 4.3, the Company has delivered to the Trustee an irrevocable notice to
redeem all of the Outstanding Securities on the Defeasance Redemption Date). For
this purpose, "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt;
(2) In the case of an election under Section 4.2, the Company
shall have delivered to the Trustee an Opinion of Independent Counsel in the
United States stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
hereof, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Independent
Counsel in
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the United States shall confirm that, the Holders of the Outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as a
result of such 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 defeasance had not occurred;
(3) In the case of an election under Section 4.3, the Company
shall have delivered to the Trustee an Opinion of Independent Counsel in the
United States to the effect that the Holders of the Outstanding Securities will
not recognize income, gain or loss for federal income tax purposes as a result
of such covenant defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred;
(4) No Default or Event of Default (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) shall have occurred and be continuing on the date of such deposit or
insofar as Section 5.1(g) or (h) is concerned, at any time during the period
ending on the 91st day after the date of deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period);
(5) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest for purposes of the
Trust Indenture Act with respect to any other securities of the Company;
(6) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, (A) this Indenture or
(B) any other agreement or instrument to which the Company or any Significant
Subsidiary is a party or by which the Company or any Significant Subsidiary is
bound, if such breach, violation, or default thereof would have a material
adverse effect on the Company and its Subsidiaries taken as a whole;
(7) Such defeasance or covenant defeasance shall not result in
the trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder;
(8) The Company shall have delivered to the Trustee an Opinion
of Independent Counsel in the United States to the effect that after the 91st
day following the deposit, the trust funds will not be subject to avoidance
under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code (or any successor
provision thereto) and related judicial decisions;
(9) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the holders of the Securities over the other creditors
of the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others;
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(10) No event or condition shall exist that would prevent the
Company from making payments of the principal of, premium, if any, and interest
on the Securities on the date of such deposit or at any time ending on the 91st
day after the date of such deposit; and
(11) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Independent Counsel, each stating that
all conditions precedent provided for relating to either the defeasance under
Section 4.2 or the covenant defeasance under Section 4.3 (as the case may be)
have been complied with.
Opinions of Counsel or Opinions of Independent Counsel
required to be delivered under this Section shall be in form and substance
reasonably satisfactory to the Trustee and may have qualifications customary for
opinions of the type required and counsel delivering such opinions may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, which certificates shall be limited as to matters
of fact, including that various financial covenants have been complied with.
Section 4.5. Deposited Money and U.S. Government Obligations
-----------------------------------------------
to Be Held in Trust; Other Miscellaneous Provisions..
-----------------------------------------------------
Subject to the provisions of the last paragraph of Section
10.3, all United States dollars and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 4.4 in respect
of the Defeased Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (excluding the Company or
any of its Affiliates acting as Paying Agent), as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal, 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 U.S. Government
Obligations deposited pursuant to Section 4.4 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is imposed, assessed or for the account of the Holders of the Defeased
Securities.
Anything in this Article IV to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 4.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
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Section 4.6. Reinstatement.
--------------
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with Section 4.2 or
4.3, 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
Securities shall be revived and reinstated, with present and prospective effect,
as though no deposit had occurred pursuant to Section 4.2 or 4.3, as the case
may be, until such time as the Trustee or Paying Agent is permitted to apply all
such United States dollars or U.S. Government Obligations in accordance with
Section 4.2 or 4.3, as the case may be; provided, however, that if the Company
makes any payment to the Trustee or Paying Agent of principal of, premium, if
any, or interest on any Security following the reinstatement of its obligations,
the Trustee or Paying Agent shall promptly pay any such amount to the Holders of
the Securities and the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the United States dollars and
U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE V
REMEDIES
Section 5.1. Events of Default.
------------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on
any Security when it becomes due and payable, and such default shall continue
for a period of 30 days;
(b) there shall be a default in the payment of the principal
of (or premium, if any, on) any Security at its Maturity (upon acceleration,
optional or mandatory redemption, required repurchase or otherwise);
(c) there shall be a default in the performance, or breach, of
any covenant or agreement of the Company under this Indenture (other than a
default in the performance, or breach, of a covenant or agreement which is
specifically dealt with in clauses (a), (b) or (d) of this Section 5.1) and such
default or breach shall continue for a period of 30 days after written notice
has been given, by certified mail, (x) to the Company by the Trustee or (y) to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities, which notice shall specify that
it is a "notice of default" and shall demand that such a default be remedied;
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(d) (i) there shall be a default in the performance or breach
of the provisions of Article VIII; (ii) the Company shall have failed to make or
consummate an Offer required in accordance with the provisions of Section 10.12;
or (iii) the Company shall have failed to make or consummate a Change of Control
Offer required in accordance with the provisions of Section 10.13;
(e) one or more defaults shall have occurred under any of the
agreements, indentures or instruments under which the Company or any Subsidiary
then has outstanding Indebtedness in excess of $10,000,000, individually or in
the aggregate, and either (a) such default results from the failure to pay such
Indebtedness at its stated final maturity or (b) such default or defaults have
resulted in the acceleration of the maturity of such Indebtedness;
(f) one or more judgments, orders or decrees for the payment
of money in excess of $10,000,000 either individually or in the aggregate, shall
be rendered against the Company or any Subsidiary or any of their respective
properties and shall not be discharged and either (a) any creditor shall have
commenced an enforcement proceeding upon such judgment, order or decree or (b)
there shall have been a period of 60 consecutive days during which a stay of
enforcement of such judgment, order or decree, by reason of an appeal or
otherwise, shall not be in effect; provided that the amount of such money
judgment, order or decree shall be calculated net of any insurance coverage that
the Company has determined in good faith is available in whole or in part with
respect to such money judgment, order or decree;
(g) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company or
any Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (ii) a decree or order adjudging the Company or any
Significant Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Significant Subsidiary or of any
substantial part of their respective properties, or ordering the winding up or
liquidation of their respective affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall be
unstayed and in effect for a period of 60 consecutive days; or
(h) (1) the Company or any Significant Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or proceeding to be adjudicated bankrupt or insolvent, (2) the Company or
any Significant Subsidiary consents to the entry of a decree or order for relief
in respect of the Company or such Significant Subsidiary in an involuntary case
or proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (3) the Company or any
Significant Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (4) the
Company or any Significant Subsidiary (A) consents to the
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filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Significant Subsidiary or of any substantial
part of their respective properties, (B) makes an assignment for the benefit of
creditors or (C) admits in writing its inability to pay its debts generally as
they become due, or (5) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph (h).
Section 5.2. Acceleration of Maturity; Rescission and
----------------------------------------
Annulment.
----------
If an Event of Default (other than an Event of Default
specified in Sections 5.1(g) and (h) with respect to the Company) shall occur
and be continuing with respect to this Indenture, the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities then
Outstanding may, and the Trustee at the request of such Holders shall, declare
all unpaid principal of, premium, if any, and accrued interest on all Securities
to be due and payable, by a notice in writing to the Company (and to the Trustee
if given by the Holders of the Securities) and upon any such declaration, such
principal, premium, if any, and interest shall become due and payable
immediately. If an Event of Default specified in clause (g) or (h) of Section
5.1 occurs with respect to the Company and is continuing, then all the
Securities shall ipso facto become and be due and payable immediately in an
amount equal to the principal amount of the Securities, together with accrued
and unpaid interest, if any, to the date the Securities become due and payable,
without any declaration or other act on the part of the Trustee or any Holder.
Thereupon, the Trustee may, at its discretion, proceed to protect and enforce
the rights of the Holders of the Securities by appropriate judiciary
proceedings.
After such declaration of acceleration with respect to the
Securities, but before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in aggregate principal amount of the Securities
Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under
this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel,
(ii) all overdue interest on all Outstanding
Securities,
(iii) the principal of and premium, if any, on any
Outstanding Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the
rate borne by the Securities, and
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(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities; and
(b) all Events of Default, other than the non-payment of
principal of the Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13. No such
rescission shall affect any subsequent Default or impair any right consequent
thereon.
If payment of the Securities is accelerated because of an
Event of Default, the Company or the Trustee shall promptly notify the agent
under the Bank Credit Facility of the acceleration. If any indebtedness under
the Bank Credit Facility is outstanding, the Company may not pay the Securities
until five Business Days after the agent under the Bank Credit Facility receives
notice of such acceleration, and, thereafter, may pay the Securities only if
this Indenture otherwise permits payments at that time.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
--------
The Company covenants that if:
(a) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of,
premium, if any, on any Security at the Stated Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, with interest upon
the overdue principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate borne by the Securities; and, in addition thereto, 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.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and unpaid
and may prosecute such proceeding to judgment or final decree, and may enforce
the same against the Company or any other obligor on the Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor on the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders under this Indenture by such appropriate private or judicial
proceedings as the Trustee shall deem most effectual to
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protect and enforce such rights, subject however to Section 5.12. No recovery of
any such judgment upon any property of the Company shall affect or impair any
rights, powers or remedies of the Trustee or the Holders.
Section 5.4. Trustee May File Proofs of Claim.
---------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor on the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, and premium, if any, and interest owing and unpaid in respect of the
Securities and to file such 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 of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 5.5. Trustee May Enforce Claims without Possession of
------------------------------------------------
Securities.
-----------
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.6. Application of Money Collected.
-------------------------------
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 6.7;
SECOND: Subject to Article Thirteen, to the payment
of the amounts then due and unpaid upon the Securities for
principal, premium, if any, and interest, in respect of which
or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for
principal, premium, if any, and interest; and
THIRD: The balance, if any, to the Person or Persons
entitled thereto, including the Company, provided that all
sums due and owing to the Holders and the Trustee have been
paid in full as required by this Indenture.
Section 5.7. Limitation on Suits.
--------------------
No Holder of any Securities shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
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(d) the Trustee for 30 days after its receipt of such notice,
request and offer (and if requested, provision) of indemnity has failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner provided in
this Indenture and for the equal and ratable benefit of all the Holders.
Section 5.8. Unconditional Right of Holders to Receive
-----------------------------------------
Principal, Premium and Interest.
--------------------------------
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right based on the terms stated herein,
which is absolute and unconditional, to receive payment of the principal of,
premium, if any, and (subject to Section 3.9) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or the repurchase date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.9. Restoration of Rights and Remedies.
-----------------------------------
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, any
other obligor on the Securities, 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.
Section 5.10. Rights and Remedies Cumulative.
-------------------------------
Except as provided in Section 3.8, 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.
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Section 5.11. Delay or Omission Not Waiver..
------------------------------
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 5.12. Control by Holders.
-------------------
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities shall have the right to 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 the
Trustee, provided that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture (including, without limitation, Section 5.7) or
expose the Trustee to personal liability, or be unduly prejudicial to Holders
not joining therein; and
(b) subject to the provisions of Section 315 of the Trust
Indenture Act, the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
------------------------
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may on behalf of the Holders of all
Outstanding Securities waive any past Default hereunder and its consequences,
except a Default
(a) in the payment of the principal of, premium, if any, or
interest on any Security; or
(b) in respect of a covenant or a provision hereof which under
this Indenture cannot be modified or amended without the consent of the Holder
of each Security Outstanding affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
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Section 5.14. Undertaking for Costs.
----------------------
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on, any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
----------------------------------------
Each of the Company and any other obligor on the Securities
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Securities contemplated herein or in the Securities
or which may affect the covenants or the performance of this Indenture; and each
of the Company and any other obligor on the Securities (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.16. Remedies Subject to Applicable Law.
-----------------------------------
All rights, remedies and powers provided by this Article V may
be exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Indenture are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Indenture invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
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ARTICLE VI
THE TRUSTEE
Section 6.1. Duties of Trustee.
------------------
Subject to the provisions of Trust Indenture Act Sections
315(a) through 315(d):
(a) if a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs;
(b) except during the continuance of a Default or an Event of
Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are
adverse to the Trustee; and
(2) in the absence of bad faith or willful misconduct
on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this
Indenture. 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 liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this Subsection (c) does not limit the effect of
Subsection (b) of this Section 6.1;
(2) 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
(3) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith, in
accordance with a direction of the Holders of a majority in
principal amount of Outstanding Securities relating to the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or
power confirmed upon the Trustee under this Indenture;
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(d) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it;
(e) whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
Subsections (a), (b), (c) and (d) of this Section 6.1; and
(f) the Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 6.2. Notice of Defaults.
-------------------
Within 90 days after a Responsible Officer of the Trustee
receives notice of the occurrence of any Default, the Trustee shall transmit by
mail to all Holders and any other Persons entitled to receive reports pursuant
to Section 313(c) of the Trust Indenture Act, as their names and addresses
appear in the Security Register, notice of such Default hereunder known to the
Trustee, unless such Default shall have been cured or waived; provided, however,
that, except in the case of a Default in the payment of the principal of,
premium, if any, or interest on any Security, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 6.3. Certain Rights of Trustee.
--------------------------
Subject to the provisions of Section 6.1 hereof and Trust
Indenture Act Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of Indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) the Trustee may consult with counsel of its selection and
any advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in
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respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred
therein or thereby in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence, bad faith or willful misconduct of
the Trustee;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security or other paper or
document unless requested in writing to do so by the Holders of not less than a
majority in aggregate principal amount of the Securities then Outstanding;
provided that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or liabilities as
a condition to proceeding; the reasonable expenses of every such investigation
so requested by the Holders of not less than 25% in aggregate principal amount
of the Securities Outstanding shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Company upon demand;
provided, further, the Trustee in its discretion may make such further inquiry
or investigation into such facts or matters as it may deem fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate; and
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(i) Notwithstanding anything to the contrary herein, the
Trustee shall have no duties to review any Officers' Certificates, Board
Resolutions, Opinions of Counsel, financials or
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other documents furnished to it by the Company for purposes of determining
compliance with any provisions of this Indenture.
(j) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants in Article X. In addition, the Trustee
shall not be deemed to have knowledge of any Default or Event of Default except
(i) any Event of Default occurring pursuant to Sections 5.01(a), 5.01(b) and
10.1 or (ii) any Default or Event of Default to which the Trustee shall have
received written notification or obtained actual knowledge.
Section 6.4. Trustee Not Responsible for Recitals,
-------------------------------------
Dispositions of Securities or Application of Proceeds Thereof.
--------------------------------------------------------------
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in any Statement of Eligibility and Qualification on Form T-1 supplied to the
Company are true and accurate subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof nor shall the Trustee be responsible for
any statement in any registration statement for the Securities under the
Securities Act or responsible for the determination as to which beneficial
owners are entitled to receive notices hereunder.
Section 6.5. Trustee and Agents May Hold Securities;
---------------------------------------
Collections; etc.
-----------------
The Trustee, any Paying Agent, Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities, with the same rights it would have if it were
not the Trustee, Paying Agent, Security Registrar or such other agent and,
subject to Sections 6.8 and 6.13 hereof and Trust Indenture Act Sections 310 and
311, may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.6. Money Held in Trust.
--------------------
All moneys received by the Trustee shall, until used or
applied as herein provided, and subject to Article XIII, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Except for
funds or securities deposited with the Trustee pursuant to Article IV, the
Trustee shall, upon request by the Company, invest all moneys received by the
Trustee, until used or applied as herein provided, in Temporary Cash Investments
in accordance with the directions of
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the Company. The Trustee shall be under no liability to the Company for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.
Section 6.7. Compensation and Indemnification of Trustee and
-----------------------------------------------
Its Prior Claim.
----------------
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as the
parties shall agree in writing from time to time for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence, bad faith or willful misconduct. The Company also
covenants and agrees to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any claim, loss, liability, tax, assessment or
other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including enforcement of this Section 6.7 and also including
any liability which the Trustee may incur as a result of failure to withhold,
pay or report any tax, assessment or other governmental charge, and the costs
and expenses of defending itself against or investigating any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the Company under this Section 6.7 to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for reasonable expenses, disbursements
and advances shall constitute an additional obligation hereunder and shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee and each predecessor Trustee.
Section 6.8. Conflicting Interests.
----------------------
The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.
Section 6.9. Trustee Eligibility.
--------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a)(1) and which
shall have a combined capital and surplus of at least $100,000,000 or is a
member of a bank holding company with a combined capital and surplus of at least
$100,000,000, to the extent there is an institution eligible and willing to
serve. If the Trustee does not have a Corporate Trust Office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to the
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Company to conduct any activities which the Trustee may be required under this
Indenture to conduct in The City of New York. If such Trustee publishes reports
of condition at least annually, pursuant to law or to the requirements of
federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 6.9, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.9, the Trustee shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
Section 6.10. Resignation and Removal; Appointment of
---------------------------------------
Successor Trustee.
------------------
(a) No resignation or removal of the Trustee and no
appointment of a successor trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor trustee under
Section 6.11.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may at any time, upon 30 days prior or written notice, resign by
giving written notice thereof to the Company. Upon receiving such notice or
resignation, the Company shall promptly appoint a successor trustee by written
instrument executed by authority of the Board of Directors, a copy of which
shall be delivered to the resigning Trustee and a copy to the successor trustee.
If an instrument of acceptance by a successor trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may, or any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper, appoint and prescribe a successor trustee.
(c) The Trustee may be removed at any time for any cause or
for no cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of Trust Indenture Act Section 310(b) after written
request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months,
(2) the Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be
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appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as ii may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor trustee and shall comply with the applicable requirements of Section
6.11. If, within 60 days after such resignation, removal or incapability, or the
occurrence of such vacancy, the Company has not appointed a successor Trustee, a
successor trustee shall be appointed by the Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the Company and the
retiring Trustee. Such successor trustee so appointed shall forthwith upon its
acceptance of such appointment become the successor trustee and supersede the
successor trustee appointed by the Company. If no successor trustee shall have
been so appointed by the Company or the Holders of the Securities and accepted
appointment in the manner hereinafter provided, the Trustee or the Holder of any
Security who has been a bona fide Holder for at least six months may, subject to
Section 5.14, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor trustee and the
address of its Corporate Trust Office or agent hereunder.
Section 6.11. Acceptance of Appointment by Successor.
---------------------------------------
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor trustee, upon payment of its charges pursuant to Section 6.7 then
unpaid, such retiring Trustee shall pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall
execute any and all
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instruments for more fully and certainly vesting in and confirming to such
successor trustee all such rights and powers.
No successor trustee with respect to the Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article VI and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section 6.11, the Company shall give notice thereof to the
Holders of the Securities, by mailing such notice to such Holders at their
addresses as they shall appear on the Security Register. If the acceptance of
appointment is substantially contemporaneous with the appointment, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Company fails to give such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Company.
Section 6.12. Merger, Conversion, Consolidation or Succession
-----------------------------------------------
to Business.
------------
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture) shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under Trust Indenture Act Section 310(a) and this
Article VI and shall have a combined capital and surplus of at least
$100,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 6.9, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided that
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
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Section 6.13. Preferential Collection of Claims Against
-----------------------------------------
Company.
--------
If and when the Trustee shall be or become a creditor of the
Company (or other obligor on the Securities), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). A Trustee who has resigned or
been removed shall be subject to Trust Indenture Act Section 311(a) to the
extent indicated therein.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
--------
The Company will furnish or cause to be furnished to the
Trustee:
(a) semiannually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content to that in Subsection (a) hereof as of a date
not more than 15 days prior to the time such list is furnished;
Section 7.2. Disclosure of Names and Addresses of Holders.
---------------------------------------------
Holders may communicate pursuant to Trust Indenture Act
Section 312(b) with other Holders with respect to their rights under this
Indenture or the Securities, and the Trustee shall comply with Trust Indenture
Act Section 312(b). The Company, the Trustee, the Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c). Further, every
Holder of Securities, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company nor the Trustee nor any agent of either
of them shall be held accountable by reason of the disclosure of any information
as to the names and addresses of the Holders in accordance with Trust Indenture
Act Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Trust Indenture Action Section
312.
Section 7.3. Reports by Trustee.
-------------------
(a) Within 60 days after May 15 of each year commencing with
the first May 15 after the issuance of Securities, the Trustee, if so required
under the Trust Indenture Act shall transmit by mail to all Holders in the
manner and to the extent provided in Trust Indenture Act
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Section 313(c), a brief report dated as of such May 15 in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(a),
provided that if no event described in Trust Indenture Act Section 313(a) has
occurred within the twelve-month period preceeding the reporting date, no such
report need be transmitted. The Trustee shall also transmit by mail to the
Holders, in the manner and to the extent provided in Trust Indenture Act Section
313(c), a brief report in accordance with and with respect to the matters
required by Trust Indenture Act Sections 313(a) and 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to
this Section 7.3 shall, at the time of such transmission, be mailed to the
Company and filed with each stock exchange, if any, upon which the Securities
are listed and also with the SEC. The Company will notify the Trustee promptly
if the Securities are listed on any stock exchange.
Section 7.4. Reports by Company.
-------------------
The Company shall:
(a) file with the Trustee, in accordance with Section 10.17
hereof, and in any event within 15 days after the Company is required to file
the same with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may from time to time by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or Section 15(d)
of the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall (i)
deliver to the Trustee annual audited financial statements of the Company and
its Subsidiaries, prepared on a consolidated basis in conformity with GAAP,
within 120 days after the end of each fiscal year of the Company, and (ii) file
with the Trustee and, to the extent permitted by law, the SEC, in accordance
with rules and regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants for this Indenture as are required from time
to time by such rules and regulations (including such information, documents and
reports referred to in Trust Indenture Act Section 314(a)); and
(c) within 15 days after the filing thereof with the Trustee,
transmit by mail to all Holders in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to be filed by the Company pursuant to Section 10.17
hereunder and subsections (a) and (b) of this Section as is required and not
prohibited by rules and regulations prescribed from time to time by the SEC. At
the
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Company's request and at the Company's expense, the Trustee shall deliver such
documents to the Holders.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 8.1. Company May Merge, Consolidate, etc., Only on
---------------------------------------------
Certain Terms.
--------------
The Company will not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a Consolidated
basis to any other Person or group of affiliated Persons, unless at the time and
after giving effect thereto:
(i) either (a) the Company will be the continuing
corporation or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment,
conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of the Company
and its Subsidiaries on a Consolidated basis (the "Surviving
Entity") will be a corporation duly organized and validly
existing under the laws of the United States of America, any
state thereof or the District of Columbia and such Person
expressly assumes, by a supplemental indenture, in a form
satisfactory to the Trustee, all the obligations of the
Company under the Securities and hereunder, as the case may
be, and the Securities and this Indenture will remain in full
force and effect as so supplemented;
(ii) immediately before and immediately after giving
effect to such transaction on a pro forma basis (and treating
any Indebtedness not previously an obligation of the Company
or any of its Subsidiaries which becomes the obligation of the
Company or any of its Subsidiaries as a result of such
transaction as having been incurred at the time of such
transaction), no Default or Event of Default will have
occurred and be continuing;
(iii) immediately before and immediately after giving
effect to such transaction on a pro forma basis (on the
assumption that the transaction occurred on the first day of
the four-quarter period for which financial results are
available ending immediately prior to the consummation of such
transaction with the
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appropriate adjustments with respect to the transaction being
included in such pro forma calculation), the Company (or the
Surviving Entity if the Company is not the continuing obligor
hereunder) could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness or Permitted Subsidiary
Indebtedness) under Section 10.8; and
(iv) at the time of the transaction the Company or
the Surviving Entity will have delivered, or caused to be
delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officer's Certificate and an
Opinion of Counsel, each to the effect that such
consolidation, merger, transfer, sale, assignment, conveyance,
transfer, lease or other transaction and the supplemental
indenture in respect thereof comply with this Indenture and
that all conditions precedent herein provided for relating to
such transaction have been complied with;
provided, however, that the foregoing prohibition shall not prohibit any merger
between or among Subsidiaries or between a Subsidiary and the Company, provided
the Company is the continuing corporation.
Section 8.2. Successor Substituted.
----------------------
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company in accordance with Section 8.1, the
successor Person formed by such consolidation or into which the Company is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture,
with the same effect as if such successor had been named as the Company herein.
When a successor assumes all the obligations of its predecessor under this
Indenture or the Securities, the predecessor shall be released from such assumed
obligations and covenants under the indenture and the Securities, as the case
may be; provided that in the case of a transfer by lease, the predecessor shall
not be released from the payment of principal and interest on the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures and Agreements without
----------------------------------------------
Consent of Holders.
-------------------
Without the consent of any Holders, the Company and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto in form and substance satisfactory to the
Trustee, for any of the following purposes:
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(a) to evidence the succession of another Person to the
Company or any other obligor on the Securities, and the assumption by any such
successor of the covenants of the Company or obligor herein and in the
Securities in accordance with Article VIII;
(b) to add to the covenants of the Company or any other
obligor on the Securities for the benefit of the Holders, or to surrender any
right or power conferred on the Company or any other obligor on the Securities,
as applicable, herein or in the Securities;
(c) to cure any ambiguity, or to correct or supplement any
provision herein or in any supplemental indenture or the Securities which may be
defective or inconsistent with any other provision herein or in the Securities
or to make any other provisions with respect to matters or questions arising
under this Indenture or the Securities; provided that, in each case, such
provisions shall not adversely affect the interest of the Holders;
(d) to comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 9.5 or otherwise;
(e) to evidence and provide the acceptance of the appointment
of a successor trustee hereunder; or
(f) to mortgage, pledge, hypothecate or grant a security
interest in favor of the Trustee for the benefit of the Holders as additional
security for the payment and performance of the Company's Indenture Obligations,
in any property, or assets, including any of which are required to be mortgaged,
pledged or hypothecated, or in which a security interest is required to be
granted to the Trustee pursuant to this Indenture or otherwise.
Section 9.2. Supplemental Indentures and Agreements with
-------------------------------------------
Consent of Holders.
-------------------
Except as permitted by Section 9.1, with the consent of the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Company and the Trustee, the
Company when authorized by Board Resolutions, and the Trustee may (i) enter into
an indenture or indentures supplemental hereto in form and substance
satisfactory to the Trustee, for the purpose of adding any provisions to or
amending, modifying or changing in any manner or eliminating any of the
provisions of this Indenture or the Securities (including, but not limited to,
for the purpose of modifying in any manner the rights of the Holders under this
Indenture or the Securities) or (ii) waive compliance with any provision in this
Indenture or the Securities (other than waivers of past Defaults covered by
Section 5.13 and waivers of covenants which are covered by Section 10.19);
provided, however, that no such supplemental indenture, agreement or instrument
shall, without the consent of the Holder of each Outstanding Security affected
thereby:
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(a) change the Stated Maturity of the principal of, or any
installment of interest on, or change to an earlier date any redemption date of,
or waive a default in the payment of the principal or interest on, any such
Security or reduce the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or change the coin or
currency in which the principal of any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to
make and consummate an Offer with respect to any Asset Sale or Asset Sales in
accordance with Section 10.12 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 10.13, including, in each case, amending, changing or
modifying any definitions relating thereto;
(c) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver or compliance with certain provisions of this Indenture;
(d) modify any of the provisions of this Section 9.2 or
Section 5.13 or 10.19, except to increase the percentage of such Outstanding
Securities required for any such actions or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each such Security affected thereby;
(e) except as otherwise permitted under Article VIII, consent
to the assignment or transfer by the Company of any of its rights and
obligations hereunder; or
(f) amend or modify any of the provisions of Article XIII of
this Indenture in any manner adverse to the Holders.
Upon the written request of the Company accompanied by a copy
of Board Resolutions authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental indenture.
It shall not be necessary for any Act of Holders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.3. Execution of Supplemental Indentures and
----------------------------------------
Agreements.
-----------
In executing, or accepting the additional trusts created by,
any supplemental indenture, agreement, instrument or waiver permitted by this
Article IX or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject
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to Trust Indenture Act Sections 315(a) through 315(d) and Section 6.2 hereof)
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental indenture, agreement
or instrument is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture, agreement
or instrument which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 9.4. Effect of Supplemental Indentures.
----------------------------------
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby
Section 9.5. Conformity with Trust Indenture Act.
------------------------------------
Every supplemental indenture executed pursuant to this Article
IX shall conform to the requirements of the Trust Indenture Act as then in
effect.
Section 9.6. Reference in Securities to Supplemental
---------------------------------------
Indentures.
-----------
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
Section 9.7. Notice of Supplemental Indentures.
----------------------------------
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of Section 9.2, the
Company shall give notice thereof to the Holders of each Outstanding Security
affected, in the manner provided for in Section 1.7, setting forth in general
terms the substance of such supplemental indenture. 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 supplemental indenture.
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ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.
-------------------------------------------
The Company shall duly and punctually pay the principal of,
premium, if any, and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
Section 10.2. Maintenance of Office or Agency.
--------------------------------
The Company shall maintain an office or agency where
Securities may be presented or surrendered for payment. The Company also will
maintain in The City of New York an office or agency where Securities may be
surrendered for registration of transfer, redemption or exchange and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office of the Trustee, at its Corporate Trust
Office, will be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of the
location and any change in the location of any such offices or agencies. If at
any time the Company shall fail to maintain any such required offices or
agencies or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
office of the Trustee and the Company hereby appoints the Trustee such agent as
its agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes, and may from time
to time rescind such designation. The Company will give prompt written notice to
the Trustee of any such designation or rescission and any change in the location
of any such office or agency.
The Trustee shall initially act as Paying Agent for the
Securities.
Section 10.3. Money for Security Payments to Be Held in Trust.
------------------------------------------------
If the Company or any of its Affiliates shall at any time act
as Paying Agent, it will, on or before each due date of the principal of,
premium, if any, or interest on any of the Securities, segregate and hold in
trust for the benefit of the Holders entitled thereto a sum sufficient to pay
the principal, premium, if any, or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
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If the Company or any of its Affiliates is not acting as
Paying Agent, the Company will, on or before each due date of the principal of,
premium, if any, or interest on any of the Securities, deposit with a Paying
Agent a sum in same day funds sufficient to pay the principal, premium, if any,
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will
cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on the Securities in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights and
disabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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 Security and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the
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Company cause to be published once, in the NEW YORK TIMES and THE WALL STREET
JOURNAL (national edition), and mail to each such Holder, 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, publication and mailing,
any unclaimed balance of such money then remaining will promptly be repaid to
the Company.
Section 10.4. Corporate Existence.
--------------------
Subject to Article VIII, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect the
corporate existence and related rights and franchises (charter and statutory) of
the Company and each Subsidiary; provided, however, that the Company shall not
be required to preserve any such right or franchise or the corporate existence
of any such Subsidiary if the Board of Directors shall determine that the
preservation thereof is no longer necessary or desirable in the conduct of the
business of the Company and its Subsidiaries as a whole; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its assets in compliance with the terms of this
Indenture.
Section 10.5. Payment of Taxes and Other Claims.
----------------------------------
The Company shall pay or discharge or cause to be paid or
discharged, on or before the date the same shall become due and payable, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any of its Subsidiaries shown to be due on any return of the Company or any
of its Subsidiaries or otherwise assessed or upon the income, profits or
property of the Company or any of its Subsidiaries if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Company to perform its obligations hereunder and
(b) all lawful claims for labor, materials and supplies, which, if unpaid, would
by law become a Lien upon the property of the Company or any of its
Subsidiaries, except for any Lien permitted to be incurred under Section 10.11,
if failure to pay or discharge the same could reasonably be expected to have a
material adverse effect on the ability of the Company to perform its obligations
hereunder; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings properly instituted and diligently conducted and in
respect of which appropriate reserves (in the good faith judgment of management
of the Company) are being maintained in accordance with GAAP.
Section 10.6. Maintenance of Properties.
--------------------------
The Company shall cause all material properties owned by the
Company or any of its Subsidiaries or used or held for use in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will cause to be made all
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necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the reasonable judgment of the Company may be consistent with sound
business practice and necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the
reasonable judgment of the Company, desirable in the conduct of its business or
the business of any of its Subsidiaries; and provided, further, however, that
the foregoing shall not prohibit a sale, transfer or conveyance of a Subsidiary
or any of its properties or assets in compliance with the terms of this
Indenture.
Section 10.7. Insurance.
----------
The Company shall at all times keep all of its and its
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually so insured by corporations similarly situated and owning like properties
in the same general geographic areas in which the Company and its Subsidiaries
operate, except where the failure to do so could not reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or prospects of the Company and its Subsidiaries,
taken as a whole.
Section 10.8. Limitation on Indebtedness.
---------------------------
The Company will not create, issue, incur, assume, guarantee
or otherwise in any manner become directly or indirectly liable for the payment
of or otherwise suffer to exist (collectively, "incur"), any Indebtedness
(including any Acquired Indebtedness), other than Permitted Indebtedness, unless
such Indebtedness is incurred by the Company and the Company's Consolidated
Fixed Charge Coverage Ratio for the four full fiscal quarters for which
financial results are available immediately preceding the date of incurrence of
such Indebtedness (the "Incurrence Date"), taken as one period (and after giving
pro forma effect to: (i) the incurrence of such Indebtedness and (if applicable)
the application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, at the beginning of such four-quarter period; (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company
since the first day of such four-quarter period as if such Indebtedness was
incurred, repaid or retired at the beginning of such four-quarter period (except
that, in making such computation, the amount of Indebtedness under any revolving
credit facility shall be computed based upon the average daily balance of such
Indebtedness during such four-quarter period); (iii) in the case of Acquired
Indebtedness, the related acquisition; and (iv) any acquisition or disposition
by the Company and its Subsidiaries of any company or any business or any assets
out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period,
assuming such acquisition or disposition and any such related payments had been
consummated on the first day of such four-quarter period), would be at least
1.8:1 from the date hereof to and including
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December 31, 1998, and 2.0:1 thereafter. The Company will not permit any of its
Subsidiaries to incur any Indebtedness (other than Permitted Subsidiary
Indebtedness).
Section 10.9. Limitation on Restricted Payments.
----------------------------------
(a) The Company will not, and will not permit any Subsidiary
to, directly or indirectly:
(i) declare or pay any dividend on, or make any
distribution to holders of, any shares of the Company's
Capital Stock (other than dividends or distributions payable
solely in shares of its Qualified Capital Stock or in options,
warrants or other rights to acquire shares of such Qualified
Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire
for value, directly or indirectly, the Company's Capital Stock
or any Capital Stock of any Affiliate of the Company (other
than Capital Stock of any Wholly Owned Subsidiary of the
Company);
(iii) prior to any scheduled principal payment,
sinking fund payment or maturity of any Subordinated
Indebtedness, make any principal payment on, or repurchase,
redeem, defease, retire or otherwise acquire for value, such
Subordinated Indebtedness (other than any such Indebtedness
owed to the Company or a Wholly Owned Subsidiary);
(iv) declare or pay any dividend or distribution on
any Capital Stock of any Subsidiary to any Person (other than
to the Company or any of its Wholly Owned Subsidiaries) or
purchase, redeem or otherwise acquire or retire for value any
Capital Stock of any Subsidiary held by any person (other than
the Company or any of its Wholly Owned Subsidiaries);
(v) incur, create, or assume, any guarantee of
Indebtedness of any Affiliate of the Company (other than a
Wholly Owned Subsidiary of the Company); or
(vi) make any Investment in any Person
(other than, in the case of clauses (ii) through (vi) above, Permitted
Investments) (any of the foregoing actions described in clauses (i) through
(vi), other than any such action that is a Permitted Payment (as defined below),
collectively, a "Restricted Payment") (the amount of any such Restricted
Payment, if other than cash, being determined by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution); unless
(1) immediately before and immediately after giving effect to such proposed
Restricted Payment on a pro forma basis, no Default or Event of Default shall
have occurred and be continuing and such Restricted
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Payment shall not be an event which is, or after notice or lapse of time or
both, would be, an "event of default" under the terms of any Indebtedness of the
Company or its Subsidiaries; (2) immediately before and immediately after giving
effect to such Restricted Payment on a pro forma basis, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness or Permitted
Subsidiary Indebtedness) under the provisions of Section 10.8; and (3) after
giving effect to the proposed Restricted Payment, the aggregate amount of all
such Restricted Payments declared or made after the date hereof plus the
Permitted Payments made under clause (b)(vi), do not exceed $5,000,000 plus the
sum of:
(A) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis during the period beginning on
January 1, 1998 and ending on the last day of the Company's last fiscal
quarter ending prior to the date of the Restricted Payment (or, if such
aggregate cumulative Consolidated Net Income shall be a loss, minus
100% of such loss); plus
(B) the aggregate Net Cash Proceeds received after the date
hereof by the Company either (x) as capital contributions in the form
of common equity to the Company or (y) from the issuance or sale (other
than to any of its Subsidiaries) of Qualified Capital Stock of the
Company or any options, warrants or rights to purchase such Qualified
Capital Stock of the Company (except, in each case, to the extent such
proceeds are used to purchase, redeem or otherwise retire Capital Stock
or Subordinated Indebtedness as set forth in clause (ii) or (iii) of
paragraph (b) below), in each case, other than Net Cash Proceeds
received from the issuance or sale of Qualified Capital Stock or
options, warrants or rights to purchase Qualified Capital Stock in, or
otherwise received in connection with, the Refinancing; plus
(C) the aggregate Net Cash Proceeds received after the date
hereof by the Company (other than from any of its Subsidiaries) upon
the exercise of any options, warrants or rights to purchase Qualified
Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after the date
hereof by the Company from the conversion or exchange, if any, of debt
securities or Redeemable Capital Stock of the Company or its
Subsidiaries into or for Qualified Capital Stock of the Company plus,
to the extent such debt securities or Redeemable Capital Stock were
issued after the date hereof, the aggregate of Net Cash Proceeds from
their original issuance; plus
(E) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after the date
hereof, an amount equal to the lesser of the return of capital with
respect to such Investment and the initial amount of such Investment,
in either case, less the cost of the disposition of such Investment.
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(b) Notwithstanding the foregoing, and in the case of clauses
(ii) through (vii) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(each of clauses (i) through (vii) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after
the date of declaration thereof if at the date of declaration
thereof such other dividend (A) would be permitted by the
provisions of paragraph (a) of this Section and (B) shall be
deemed to have been paid on such date of declaration for
purposes of the calculation required by paragraph (a) of this
Section;
(ii) the repurchase, redemption, or other acquisition
or retirement for value of any shares of any class of Capital
Stock of the Company in exchange for (including any such
exchange pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu of the
issuance of fractional shares or scrip), or out of the Net
Cash Proceeds of a substantially concurrent issue and sale for
cash (other than to a Subsidiary) of, other shares of
Qualified Capital Stock of the Company; provided that the Net
Cash Proceeds from the issuance of such shares of Qualified
Capital Stock are, to the extent so used, excluded from clause
(3) (B) of paragraph (a) of this Section;
(iii) the repurchase, redemption, defeasance,
retirement or acquisition for value or payment of principal of
any Subordinated Indebtedness or Redeemable Capital Stock in
exchange for, or in an amount not in excess of the Net Cash
Proceeds of, a substantially concurrent issuance and sale for
cash (other than to any Subsidiary) of any Qualified Capital
Stock of the Company, provided that the Net Cash Proceeds from
the issuance of such shares of Qualified Capital Stock are, to
the extent so used, excluded from clause (3)(B) of paragraph
(a) of this Section;
(iv) the repurchase, redemption, defeasance,
retirement, refinancing, acquisition for value or payment of
principal of any Subordinated Indebtedness (other than
Redeemable Capital Stock) (a "refinancing") through the
substantially concurrent issuance of new Subordinated
Indebtedness of the Company, provided that any such new
Subordinated Indebtedness (1) shall be in a principal amount
that does not exceed the principal amount so refinanced (or,
if such Subordinated Indebtedness provides for an amount less
than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, then such lesser amount
as of the date of determination), plus the lesser of (I) the
stated amount of any premium or other payment required to be
paid in connection with such a refinancing pursuant to the
terms of the Indebtedness being refinanced, or (II) the amount
of premium or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount
of expenses of the Company incurred in connection with such
refinancing; (2) has an Average Life to Stated
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Maturity greater than the remaining Average Life to Stated
Maturity of the Securities; (3) has a Stated Maturity for its
final scheduled principal payment later than the Stated
Maturity for the final scheduled principal payment of the
Securities; and (4) is expressly subordinated in right of
payment to the Securities at least to the same extent as the
Subordinated Indebtedness to be refinanced;
(v) the repurchase, redemption, defeasance,
retirement, refinancing, acquisition for value or payment of
any Redeemable Capital Stock through the substantially
concurrent issuance of new Redeemable Capital Stock of the
Company, provided that any such new Redeemable Capital Stock
(1) shall have an aggregate liquidation preference that does
not exceed the aggregate liquidation preference of the amount
so refinanced; (2) has an Average Life to Stated Maturity
greater than the remaining Average Life to Stated Maturity of
the Securities; and (3) has a Stated Maturity later than the
Stated Maturity for the final scheduled principal payment of
the Securities;
(vi) the repurchase of shares of, or options or
warrants to purchase shares of, common stock of the Company or
any of its Subsidiaries from employees, former employees,
directors or former directors of the Company or any of its
Subsidiaries (or permitted transferees of such employees,
former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements)
or plans (or amendments thereto) approved by the Board of
Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such common
stock; and
(vii) the repurchase, redemption, defeasance,
retirement or acquisition for value of the 13% Notes on or
prior to their scheduled maturity.
Section 10.10. Limitation on Transactions with Affiliates.
-------------------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with or for the benefit of
any Affiliate of the Company (other than the Company or a Subsidiary) unless
such transaction or series of related transactions is entered into in good faith
and (a) such transaction or series of related transactions is on terms that are
no less favorable to the Company or such Subsidiary, as the case may be, than
those that would be available in a comparable transaction in arm's-length
dealings with an unrelated third party, (b) with respect to any transaction or
series of related transactions involving aggregate value in excess of
$1,000,000, the Company delivers an Officers' Certificate to the Trustee
certifying that such transaction or series of related transactions complies with
clause (a) above, and (c) with respect to any transaction or series of related
transactions involving aggregate value in excess of $10,000,000, either (A) such
transaction or series of related transactions has been approved by a majority of
the Disinterested Directors of the
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Company, or in the event there is only one Disinterested Director, by such
Disinterested Director, or (B) the Company delivers to the Trustee a written
opinion of an investment banking firm of national standing or other recognized
independent expert with experience appraising the terms and conditions of the
type of transaction or series of related transactions for which an opinion is
required stating that the transactions or series of related transactions are
fair to the Company or such Subsidiary from a financial point of view; provided,
however, that clauses (a) through (c) above shall not apply to (i) any
transaction with an employee or director of the Company or any of its
Subsidiaries entered into in the ordinary course of business (including
compensation and employee benefit arrangements with any officer, director or
employee of the Company or any Subsidiary, including under any stock option or
stock incentive plans), (ii) Restricted Payments made in accordance with Section
10.9 or Permitted Payments, (iii) any transactions related to the Securitization
Facility, (iv) management agreements or similar agreements between (A) the
Company or any Subsidiary and (B) Affiliates in which the Company or any
Subsidiary has made an Investment, and (v) contributions by the Company or any
Subsidiary to a real estate investment trust pursuant to clause (ix) of the
definition of Permitted Investments.
Section 10.11. Limitation on Liens.
--------------------
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, create or incur any Lien of any kind securing any Pari
Passu Indebtedness or Subordinated Indebtedness (including any assumption,
guarantee or other liability with respect thereto by any Subsidiary) upon any
property or assets (including any intercompany notes) of the Company or any
Subsidiary owned on the date hereof or acquired after the date hereof, or any
income or profits therefrom, unless the Securities are directly secured equally
and ratably with (or, in the case of Subordinated Indebtedness, prior or senior
thereto, with the same relative priority as the Securities shall have with
respect to such Subordinated Indebtedness) the obligations or liability secured
by such Lien except for Liens (A) securing any Indebtedness which became
Indebtedness pursuant to a transaction permitted under Section 8.1 or securing
Acquired Indebtedness which, in each case, were created prior to (and not
created in connection with, or in contemplation of) the incurrence of such Pari
Passu Indebtedness or Subordinated Indebtedness (including any assumption,
guarantee or other liability with respect thereto by any Subsidiary) and which
Indebtedness is permitted under the provisions of Section 10.8, (B) securing any
Indebtedness incurred in connection with any refinancing, renewal, substitutions
or replacements of any such Indebtedness described in clause (A), so long as the
aggregate principal amount of Indebtedness represented thereby is not increased
by such refinancing by an amount greater than the lesser of (i) the stated
amount of any premium or other payment required to be paid in connection with
such a refinancing pursuant to the terms of the Indebtedness being refinanced,
or (ii) the amount of premium or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of expenses of the
Company incurred in connection with such refinancing, provided, however, that in
the case of clauses (A) and (B), any such Lien only extends to the assets that
were subject to such Lien securing such Indebtedness prior to the related
acquisition by the Company or its Subsidiaries, or (C) securing Indebtedness
incurred to effect a defeasance of the Securities pursuant to Article IV.
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Section 10.12. Limitation on Sale of Assets..
------------------------------
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, consummate an Asset Sale unless (i) at
least 75% of the consideration from such Asset Sale is received in cash or Cash
Equivalents, and (ii) the Company or such Subsidiary receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value of the
shares or assets subject to such Asset Sale (as determined by the Board of
Directors and evidenced in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset
Sale are not required to be applied to repay permanently any Senior Indebtedness
then outstanding as required by the terms thereof, or the Company determines not
to apply such Net Cash Proceeds to the permanent prepayment of such Senior
Indebtedness, or if no such Senior Indebtedness is then outstanding, then the
Company or a Subsidiary may, within 360 days of the Asset Sale, invest the Net
Cash Proceeds in properties and other assets that (as determined by the Board of
Directors) replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that will be used in the businesses of the
Company or its Subsidiaries existing on the date hereof or in businesses
reasonably related or complementary thereto. The amount of such Net Cash
Proceeds not applied to repay Senior Indebtedness or used or invested within 360
days of the Asset Sale as set forth in this paragraph constitutes "Excess
Proceeds".
(c) When the aggregate amount of Excess Proceeds exceeds
$15,000,000, the Company will apply the Excess Proceeds to the repayment of the
Securities and any other Pari Passu Indebtedness outstanding with provisions
requiring the Company to make an offer to purchase or to purchase or redeem such
Indebtedness with the proceeds from any Asset Sale as follows: (A) the Company
will make an offer to purchase (an "Offer") from all holders of the Securities
in accordance with the procedures set forth in this Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Securities Amount") equal to the product of
such Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Securities, and the denominator of which is
the sum of the outstanding principal amount of the Securities and such Pari
Passu Indebtedness (subject to proration in the event such amount is less than
the aggregate Offered Price (as defined herein) of all Securities tendered), and
(B) to the extent required by such Pari Passu Indebtedness to permanently reduce
the principal amount of such Pari Passu Indebtedness, the Company will make an
offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a
"Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Securities Amount; provided that in no
event will the Company be required to make a Pari Passu Offer in a Pari Passu
Debt Amount exceeding the principal amount of such Pari Passu Indebtedness plus
the amount of any premium required to be paid to repurchase such Pari Passu
Indebtedness. The offer price for the Securities will be payable in cash in an
amount equal to 100% of the principal amount of the Securities plus accrued and
unpaid interest, if any, to the date (the "Offer Date") such Offer is
consummated (the "Offered Price"), in accordance with the procedures set forth
in this Indenture. To the extent that
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the aggregate Offered Price of the Securities tendered pursuant to the Offer is
less than the Securities Amount relating thereto or the aggregate amount of Pari
Passu Indebtedness that is purchased in a Pari Passu Offer is less than the Pari
Passu Debt Amount, the Company will use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Securities and
Pari Passu Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Securities to be purchased on a
pro rata basis. Upon the completion of the purchase of all the Securities
tendered pursuant to an Offer and the completion of a Pari Passu Offer, the
amount of Excess Proceeds, if any, shall be reset at zero.
(d) If the Company becomes obligated to make an Offer pursuant
to clause (c) above, the Securities and the Pari Passu Indebtedness shall be
purchased by the Company, at the option of the holders thereof, in whole or in
part in integral multiples of $1,000, on a date that is not earlier than 30 days
and not later than 60 days from the date the notice of such Offer is given to
holders, or such later date as may be necessary for the Company to comply with
the requirements under the Exchange Act.
(e) The Company will comply with the applicable tender offer
rules, including Rule 14e-l under the Exchange Act, and any other applicable
securities laws or regulations in connection with an Offer.
Section 10.13. Purchase of Securities upon a Change of
---------------------------------------
Control.
--------
(a) If a Change of Control shall occur at any time, then each
Holder shall have the right to require that the Company purchase such Holder's
Securities in whole or in part in integral multiples of $1,000 at a purchase
price (the "Change of Control Purchase Price") in cash in an amount equal to
101% of the principal amount of such Securities, plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Purchase
Date"), pursuant to the offer described below in this Section 10.13 (the "Change
of Control Offer") and in accordance with the other procedures set forth in
subsections (b), (c), (d) and (e) of this Section 10.13.
(b) Within 30 days following any Change of Control, the
Company shall notify the Trustee thereof and give written notice (a "Change of
Control Purchase Notice") of such Change of Control to each Holder by
first-class mail, postage prepaid, at his address appearing in the Security
Register, stating among other things:
(1) that a Change of Control has occurred, the date
of such event, and that such Holder has the right to require
the Company to repurchase such Holder's Securities at the
Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding
such Change of Control (including but not limited to, if
applicable, information with respect to pro forma historical
income, cash flow and capitalization after giving effect to
such Change of Control);
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(3) (i) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of
the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q, as applicable, and any Current Report on
Form 8-K of the Company filed subsequent to such Quarterly
Report (or in the event the Company is not required to prepare
any of the foregoing Forms, the comparable information
required to be prepared by the Company pursuant to Section
10.17), (ii) a description of material developments, if any,
in the Company's business subsequent to the date of the latest
of such reports and (iii) such other information, if any,
concerning the business of the Company which the Company in
good faith believes will enable such Holders to make an
informed investment decision regarding the Change of Control
Offer;
(4) that the Change of Control Offer is being made
pursuant to this Section 10.13 and that all Securities
properly tendered pursuant to the Change of Control Offer will
be accepted for payment at the Change of Control Purchase
Price;
(5) the Change of Control Purchase Date, which shall
be a Business Day no earlier than 30 days nor later than 60
days from the date such notice is mailed, or such later date
as is necessary to comply with requirements under the Exchange
Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and
the offices or agencies referred to in Section 10.2;
(8) that Securities must be surrendered not later
than one Business Day prior to the Change of Control Purchase
Date to the Paying Agent at the office of the Paying Agent or
to an office or agency referred to in Section 10.2 to collect
payment;
(9) that the Change of Control Purchase Price for any
Security which has been properly tendered and not withdrawn
will be paid promptly following the Change of Control Offer
Purchase Date;
(10) the procedures that a Holder must follow to
accept a Change of Control Offer or to withdraw such
acceptance;
(11) that any Security not tendered will continue to
accrue interest; and
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(12) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, any Securities
accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control
Purchase Date.
(c) Upon receipt by the Company of the proper tender of
Securities, the Holder of the Security in respect of which such proper tender
was made shall (unless the tender of such Security is properly withdrawn)
thereafter be entitled to receive solely the Change of Control Purchase Price
with respect to such Security. Upon surrender of any such Security for purchase
in accordance with the foregoing provisions, such Security shall be paid by the
Company at the Change of Control Purchase Price; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Change of
Control Purchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Regular
Record Dates according to the terms and the provisions of Section 3.9. Holders
electing to have Securities purchased will be required to surrender such
Securities to the Paying Agent at the address specified in the Change of Control
Purchase Notice at least one Business Day prior to the Change of Control
Purchase Date. Any Security that is to be purchased only in part shall be
surrendered to a Paying Agent at the office of such Paying Agent (with, if the
Company, the Security Registrar or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Security Registrar or the Trustee, as the case may be, duly executed by, the
Holder thereof or such Holder's attorneys duly authorized in writing), and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, one or more new Securities of
any authorized denomination as requested by such Holder in an aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) not later than 10:00 a.m. (New
York time) on the Change of Control Purchase Date, deposit with the Trustee or
with a Paying Agent an amount of money in same day funds (or New York Clearing
House funds if such deposit is made prior to the Change of Control Purchase
Date) sufficient to pay the aggregate Change of Control Purchase Price of all
the Securities or portions thereof which are to be purchased as of the Change of
Control Purchase Date and (iii) not later than 10:00 a.m. (New York time) on the
Change of Control Purchase Date, deliver to the Paying Agent an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the Company. The Paying Agent shall promptly mail or deliver to Holders of
Securities so accepted payment in an amount equal to the Change of Control
Purchase Price of the Securities purchased from each such Holder, and the
Company shall execute and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly announce the results of
the Change of Control Offer on the
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Change of Control Purchase Date. For purposes of this Section 10.13, the Company
shall choose a Paying Agent which shall not be the Company.
(e) A tender made in response to a Change of Control Purchase
Notice may be withdrawn if the Company receives, not later than one Business Day
prior to the Change of Control Purchase Date, a telegram, telex, facsimile
transmission or letter, specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect
of which such notice of withdrawal is being submitted;
(3) the principal amount of the Security (which shall
be $1,000 or an integral multiple thereof) delivered for
purchase by the Holder as to which such notice of withdrawal
is being submitted;
(4) a statement that such Holder is withdrawing his
election to have such principal amount of such Security
purchased; and
(5) the principal amount, if any, of such Security
(which shall be $1,000 or an integral multiple thereof) that
remains subject to the original Change of Control Purchase
Notice and that has been or will be delivered for purchase by
the Company.
(f) Subject to applicable escheat laws, the Trustee and the
Paying Agent shall return to the Company any cash that remains unclaimed,
together with interest or dividends, if any, thereon, held by them for the
payment of the Change of Control Purchase Price; provided, however, that, (x) to
the extent that the aggregate amount of cash deposited by the Company pursuant
to clause (ii) of paragraph (d) above exceeds the aggregate Change of Control
Purchase Price of the Securities or portions thereof to be purchased, then the
Trustee shall hold such excess for the Company and (y) unless otherwise directed
by the Company in writing, promptly after the Business Day following the Change
of Control Purchase Date the Trustee shall return any such excess to the Company
together with interest, if any, thereon.
(g) The Company shall comply, to the extent applicable, with
the applicable tender offer rules, including Rule 14e-1 under the Exchange Act,
and any other applicable securities laws or regulations in connection with a
Change of Control Offer.
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Section 10.14. Limitation on Preferred Stock of Subsidiaries.
----------------------------------------------
The Company will not permit (a) any Subsidiary of the Company
to issue any Preferred Stock, except for (i) Preferred Stock issued to the
Company or a Wholly-Owned Subsidiary and (ii) Preferred Stock issued by a Person
prior to the time (A) such Person becomes a Subsidiary, (B) such Person merges
with or into a Subsidiary or (C) a Subsidiary merges with or into such Person;
provided that such Preferred Stock referred to in clause (ii) above was not
issued or incurred by such Person in anticipation of the type of transaction
contemplated by subclause (A), (B) or (C), or (b) any Person (other than the
Company, or a Wholly-Owned Subsidiary) to acquire Preferred Stock of any
Subsidiary from the Company or any Subsidiary, except, in the case of clause (a)
or (b), upon the acquisition of all the outstanding Preferred Stock of such
Subsidiary in accordance with the terms hereof.
Section 10.14A. Limitation on Senior Subordinated
---------------------------------
Indebtedness.
-------------
The Company will not, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise in any manner become directly or
indirectly liable for or with respect to or otherwise permit to exist any
Indebtedness that is subordinate in right of payment to any Indebtedness of the
Company unless such Indebtedness is also pari passu with the Securities or
subordinate in right of payment to the Securities at least to the same extent as
the Securities are subordinate in right of payment to Senior Indebtedness.
Section 10.15. Limitation on Dividends and Other Payment
-----------------------------------------
Restrictions Affecting Subsidiaries.
------------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or suffer to exist any
consensual encumbrance or restriction on the ability of any Subsidiary to (i)
pay dividends or make any other distribution on its Capital Stock, (ii) pay any
Indebtedness owed to the Company or any other Subsidiary, (iii) make any
Investment in the Company or any other Subsidiary or (iv) transfer any of its
properties or assets to the Company or any other Subsidiary, except for: (a) any
encumbrance or restriction pursuant to any agreement in effect on the date
hereof; (b) any encumbrance or restriction, with respect to a Subsidiary that is
not a Subsidiary of the Company on the date hereof, in existence at the time
such Person becomes a Subsidiary of the Company and not incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary; (c) customary
non-assignment or subletting provisions of any lease, license or other contract;
(d) any restriction entered into in the ordinary course of business contained in
any lease of any Subsidiary or any security agreement or mortgage securing
Indebtedness of any Subsidiary to the extent such restriction restricts the
transfer of property subject to such security agreement, mortgage or lease; (e)
any restriction contained in an agreement pursuant to which Permitted Subsidiary
Indebtedness is incurred; and (f) any encumbrance or restriction existing under
any agreement that amends, substitutes, restructures, supplements, extends,
renews, refinances or replaces or otherwise modifies the agreements containing
the encumbrances or restrictions in the foregoing clauses (a), (b), (c), (d) or
(e), or in
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this clause (f); provided that the terms and conditions of any such encumbrances
or restrictions are no more restrictive in any material respect than those under
or pursuant to the agreement evidencing the Indebtedness so amended,
substituted, restructured, supplemented, extended, renewed, refinanced, replaced
or modified.
Section 10.16. Limitations on Unrestricted Subsidiaries.
-----------------------------------------
The Company will not make, and will not permit its
Subsidiaries to make, an Investment in Unrestricted Subsidiaries unless, at the
time thereof, (a) the aggregate amount of such Investments would not exceed the
amount of Restricted Payments then permitted to be made pursuant to the
provisions of Section 10.9 or (b) such Investment is a Permitted Investment.
Except for Permitted Investments, any Investment in Unrestricted Subsidiaries
permitted to be made pursuant to this covenant (i) must be permitted to be made
pursuant to the provisions of Section 10.9 and will be treated as a Restricted
Payment in calculating the amount of Restricted Payments made by the Company,
and (ii) may be made in cash or property.
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Section 10.17. Provision of Financial Statements.
----------------------------------
After the earlier to occur of the consummation of the Exchange
Offer and the 120th calendar day following the date of original issue of the
Securities, whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, the Company will, to the extent permitted under the Exchange
Act, file with the SEC the annual reports, quarterly reports and other documents
which the Company would have been required to file with the SEC pursuant to
Sections 13(a) or 15(d) of the Exchange Act if the Company were so subject, such
documents to be filed with the SEC on or prior to the date (a "Required Filing
Date") by which the Company would have been required so to file such documents
if the Company were so subject. The Company will also in any event (x) within 15
days of each Required Filing Date occurring after the issuance of the Securities
(i) transmit by mail to all Holders, as their names and addresses appear in the
Security Register, without cost to such holders and (ii) file with the Trustee
copies of the annual reports, quarterly reports and other documents which the
Company would have been required to file with the SEC pursuant to Sections 13(a)
or 15(d) of the Exchange Act if the Company were subject to either of such
Sections and (y) if filing such documents by the Company with the SEC is not
permitted under the Exchange Act, promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective Holder at the Company's cost. So long as any of the
Securities remain Outstanding, the Company will make available to any
prospective purchaser of Securities or beneficial owner of Securities in
connection with any sale thereof the information required by Rule 144A(d)(4)
under the Securities Act, until such time as the Company has either exchanged
the Securities for securities identical in all material respects which have been
registered under the Securities Act or until such time as the Holders thereof
have disposed of such Securities pursuant to an effective registration statement
under the Securities Act.
Section 10.18. Statement by Officers as to Default.
------------------------------------
(a) The Company will deliver to the Trustee, on or before a
date not more than 120 days after the end of each fiscal year of the Company
ending after the date hereof, a written statement signed by two executive
officers of the Company, one of whom shall be the principal executive officer,
principal financial officer or principal accounting officer of the Company, as
to compliance herewith, including whether or not, after a review of the
activities of the Company during such year and of the Company's performance
under this Indenture, to the best knowledge, based on such review, of the
signers thereof, the Company has fulfilled all of its respective obligations and
is in compliance with all conditions and covenants under this Indenture
throughout such year and, if there has been a Default specifying each Default
and the nature and status thereof and any actions being taken by the Company
with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default the Company
shall deliver to the Trustee by registered or certified mail or
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facsimile transmission followed by hard copy of an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what actions the Company is taking or proposes to take with respect
thereto, within ten Business Days of becoming aware of its occurrence.
Section 10.19. Waiver of Certain Covenants.
----------------------------
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 10.6 through 10.11 and 10.14
through 10.18, if, before or after the time for such compliance, the Holders of
not less than a majority in aggregate principal amount of the Securities at the
time Outstanding shall, by Act of such Holders, waive such compliance in such
instance with such covenant or provision, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Rights of Redemption.
---------------------
(a) The Securities are subject to redemption at any time on or
after October 15, 2002, at the option of the Company, in whole or in part,
subject to the conditions, and at the Redemption Prices, specified in the form
of Security, together with accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on relevant Regular
Record Dates and Special Record Dates to receive interest due on relevant
Interest Payment Dates and Special Payment Dates).
(b) In addition, at any time on or prior to October 15, 2000,
the Company may, at its option, use the net proceeds of one or more Public
Equity Offerings to redeem up to an aggregate of 35% of the aggregate principal
amount of Securities originally issued under this Indenture at a redemption
price equal to 109.875% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the Redemption Date; provided that at
least $146,250,000 aggregate principal amount of Securities remains outstanding
immediately after the occurrence of such redemption. In order to effect the
foregoing redemption, the Company must mail a notice of redemption no later than
60 days after the related Public Equity Offering and must consummate such
redemption within 90 days of the closing of the Public Equity Offering.
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Section 11.2. Applicability of Article.
-------------------------
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article XI.
Section 11.3. Election to Redeem; Notice to Trustee.
--------------------------------------
The election of the Company to redeem any Securities pursuant
to Section 11.1 shall be evidenced by a Company Order and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, not less than 45 nor more than 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice period shall be satisfactory
to the Trustee), notify the Trustee in writing of such Redemption Date and of
the principal amount of Securities to be redeemed.
Section 11.4. Selection by Trustee of Securities to Be
----------------------------------------
Redeemed.
---------
If less than all the Securities are to be redeemed, the
particular Securities or portions thereof to be redeemed shall be selected not
more than 45 days prior to the Redemption Date. The Trustee shall select the
Securities or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable. The amounts to be redeemed
shall be equal to $1,000 or any integral multiple thereof.
If requested by the Company, the Trustee shall promptly notify
the Company and the Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.
Section 11.5. Notice of Redemption.
---------------------
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at its address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
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(c) if less than all Outstanding Securities are to be
redeemed, the identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the
principal amount of such Security to be redeemed and that after the Redemption
Date upon surrender of such Security, new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof will be
issued;
(e) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security or portion thereof to be
redeemed, and that (unless the Company shall default in payment of the
Redemption Price) interest thereon shall cease to accrue on and after said date;
(g) the names and addresses of the Paying Agent and the
offices or agencies referred to in Section 10.2 where such Securities are to be
surrendered for payment of the Redemption Price;
(h) the CUSIP number, if any, relating to such Securities; and
(i) the procedures that a Holder must follow to surrender the
Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
If the Company elects to give notice of redemption, it shall provide the Trustee
with a certificate stating that such notice has been given in compliance with
the requirements of this Section 11.5.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 11.6. Deposit of Redemption Price.
----------------------------
On or prior to 10:00 a.m., New York time, on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company or any of its Affiliates is acting as Paying Agent, segregate and
hold in trust as provided in Section 10.3) an
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amount of money in same day funds sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date or Special
Payment Date) accrued interest on, all the Securities or portions thereof which
are to be redeemed on that date. The Paying Agent shall promptly mail or deliver
to Holders of Securities so redeemed payment in an amount equal to the
Redemption Price of the Securities purchased from each such Holder. All money,
if any, earned on funds held in trust by the Trustee or any Paying Agent shall
be remitted to the Company. For purposes of this Section 11.6, the Company shall
choose a Paying Agent which shall not be the Company.
Section 11.7. Securities Payable on Redemption Date.
--------------------------------------
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Holders will be
required to surrender the Securities to be redeemed to the Paying Agent at the
address specified in the notice of redemption at least one Business Day prior to
the Redemption Date. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such on the relevant
Regular Record Dates and Special Record Dates according to the terms and the
provisions of Section 3.9.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
Section 11.8. Securities Redeemed or Purchased in Part.
-----------------------------------------
Any Security which is to be redeemed or purchased only in part
shall be surrendered to the Paying Agent at the office or agency maintained for
such purpose pursuant to Section 10.2 (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Trustee, as the case may be, duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the unredeemed portion of the principal of
the Security so surrendered that is not redeemed or purchased.
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ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.1. Satisfaction and Discharge of Indenture.
----------------------------------------
This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Securities as expressly provided for herein) as to all Outstanding
Securities hereunder, and the Trustee, upon Company Request and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and
delivered (other than (i) lost, stolen or destroyed Securities
which have been replaced or paid as provided in Section 3.8 or
(ii) all Securities for whose payment United States dollars
have theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the
Company or discharged from such trust as provided in Section
10.3) have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to
the Trustee for cancellation (i) have become due and payable,
(ii) will become due and payable at their Stated Maturity
within one year or (iii) are to be called for redemption
within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company; and the Company has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust an amount in United States
dollars sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to
the Trustee for cancellation, including the principal of,
premium, if any, and accrued interest on, such Securities at
such Maturity, Stated Maturity or Redemption Date;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, in form and substance
reasonably satisfactory to the Trustee, each stating that (i) all conditions
precedent herein relating to the satisfaction and discharge hereof have been
complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary is bound.
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Notwithstanding the satisfaction and discharge hereof, the
obligations of the Company to the Trustee under Section 6.6 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of subsection (a) of this Section 12.1, the obligations of the Trustee under
Section 12.2 and the last paragraph of Section 10.3 shall survive.
Section 12.2. Application of Trust Money.
---------------------------
Subject to the provisions of the last paragraph of Section
10.3, all United States dollars deposited with the Trustee pursuant to Section
12.1 shall be held in trust and applied by it, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on, the Securities for whose payment such United
States dollars have been deposited with the Trustee.
ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Indebtedness.
----------------------------------------------
Anything in this Indenture or the Securities to the contrary
notwithstanding, the Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Securities and the payment of the principal of, premium, if
any, and interest on (including any payment required under any provision of this
Indenture and the Securities, including Sections 10.12 and 10.13), each and all
of the Securities and the other Indenture Obligations are hereby expressly made
subordinate and subject in right of payment as provided in this Article to the
prior payment in full, in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of the Senior Indebtedness
(including any interest accruing after the occurrence of an Event of Default
under Section 5.1(g) or (h), whether or not such interest is an allowed claim
enforceable against the debtor in a case brought under the Bankruptcy Law).
As used in this Indenture and the Securities, "paying the
Securities", "payment of the Securities" and similar phrases mean any direct or
indirect payment or distribution by or on behalf of the Company on account of
principal of (or premium, if any) or interest on the Securities, the Indenture
Obligations or other amounts owed by the Company under this Indenture and the
Securities (other than amounts owing to the Trustee pursuant to Section 6.7
hereof) or to acquire or repurchase pursuant to the provisions of this Indenture
or redeem, retire or defease all or any portion of the Securities or to make any
deposit, payment or transfer in furtherance of the foregoing.
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This Article Thirteen shall constitute a continuing offer to
all Persons who, in reliance upon such provisions, become holders or continue to
hold Senior Indebtedness; and such provisions are made for the benefits of the
holders of Senior Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions.
Section 13.2. Payment Over of Proceeds Upon Dissolution, etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary, or whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshaling of assets or liabilities of the Company,
whether voluntary or involuntary, or whether or not involving insolvency or
bankruptcy, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of all amounts due on or in
respect of Senior Indebtedness before the Holders of the Securities are entitled
to receive any payment or distribution of any kind or character (excluding
securities of the Company or any other corporation that are equity securities or
are subordinate in right of payment to all Senior Indebtedness, that may be
outstanding, to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article ("Permitted
Junior Securities")) on account of the principal of, premium, if any, or
interest on the Securities or other Indenture Obligations or on account of the
purchase, redemption, defeasance or other acquisition of , or in respect of, the
Securities or other Indenture Obligations (other than amounts previously set
aside with the Trustee, or payments previously made, in either case, in
accordance with the provisions of Sections 4.2 and 4.3 of this Indenture); and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (excluding
Permitted Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or the Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or Cash Equivalents or, as
acceptable to the holders or Senior Indebtedness, in any other manner, of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
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(3) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any Security shall have
received any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (excluding Permitted Junior
Securities), in respect of principal, premium, if any, and interest on the
Securities or other Indenture Obligations before all Senior Indebtedness is paid
in full, in cash or Cash Equivalents or, as acceptable to the holder of Senior
Indebtedness, in any other manner, then and in such event such payment or
distribution (excluding Permitted Junior Securities) shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payments or distributions of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the sale, assignment, conveyance, transfer, lease or other
disposal of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
the surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, sale, assignment, conveyance, transfer, lease or
other disposal, comply with the conditions set forth in Article Eight.
Section 13.3. Suspension of Payment When Designated Senior
--------------------------------------------
Indebtedness in Default.
------------------------
(a) Upon the occurrence and during the continuance of any
default in the payment of any Designated Senior Indebtedness beyond any
applicable grace period ( a "Payment Default"), no payment (other than amounts
previously set aside with the Trustee or payments previously made, in either
case, in accordance with Section 4.2 and 4.3 in this Indenture) or distribution
of any assets of the Company or any Subsidiary of any kind or character
(excluding Permitted Junior Securities) may be made by the Company or any
Subsidiary on account of the principal of, premium, if any, or interest on, the
Securities or other Indenture Obligations, or on account of the purchase,
redemption, defeasance or other acquisition of or in respect of, the Securities
or other Indenture Obligations unless and until such Payment Default shall have
been cured or waived or shall have ceased to exist or the Designated Senior
Indebtedness shall have been discharged or paid in full, in cash or Cash
Equivalents or, as acceptable to the holders of Senior Indebtedness, in any
other manner, after which the Company shall (subject to the other provisions of
this Article Thirteen) resume making any and all required payments in respect of
the Securities, including any missed payments.
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(b) (1) Upon the occurrence and during the continuance of any
non-payment default with respect to any Designated Senior Indebtedness pursuant
to which the maturity thereof may then be accelerated immediately (a
"Non-payment Default") and (2) after the receipt by the Trustee and the Company
from a Senior Representative of any Designated Senior Indebtedness of written
notice of such Non-payment Default, no payment (other than any amounts
previously set aside with the Trustee, or payments previously made, in either
case, in accordance with the provisions of Sections 4.2 or 4.3 in this
Indenture) or distribution of any assets of the Company of any kind or character
(excluding Permitted Junior Securities) may be made by the Company or any
Subsidiary on account of the principal of, premium, if any, or interest on, the
Securities or other Indenture Obligations, or on account of the purchase,
redemption, defeasance or other acquisition of, or in respect of, the Securities
or other Indenture Obligations for the period specified below ("Payment Blockage
Period").
(c) A Payment Blockage Period shall commence upon the receipt
of notice of the Non-payment Default by the Trustee and the Company from a
Senior Representative and shall end on the earliest of (i) the 179th day after
such commencement, (ii) the date on which such Non-payment Default (and all
Non-payment Defaults as to which notice is given after such Payment Blockage
Period is initiated) is cured, waived or ceases to exist or on which such
Designated Senior Indebtedness is discharged or paid in full, in cash or Cash
Equivalents or, as acceptable to the holders of Senior Indebtedness, in any
other manner, or (iii) the date on which such Payment Blockage Period (and all
Non-payment Defaults as to which notice is given after such Payment Blockage
Period is initiated) shall have been terminated by written notice to the Company
or the Trustee from the Senior Representative initiating such Payment Blockage
Period, after which, in the case of clauses (i), (ii) and (iii), the Company
shall promptly resume making any and all required payments in respect of the
Securities, including any missed payments. In no event will a Payment Blockage
Period extend beyond 179 days from the date of the receipt by the Company and
the Trustee of the notice initiating such Payment Blockage Period (such 179-day
period referred to as the "Initial Period"). Any number of notices of
Non-payment Defaults may be given during the Initial Period; provided that
during any period of 365 consecutive days only one Payment Blockage Period,
during which payment of principal of, premium, if any, or interest on, the
Securities may not be made, may commence and the duration of such period may not
exceed 179 days. No Non-payment Default with respect to any Designated Senior
Indebtedness that existed or was continuing on the date of the commencement of
any Payment Blockage Period will be, or can be, made the basis for the
commencement of a second Payment Blockage Period, whether or not within a period
of 365 consecutive days, unless such default has been cured or waived for a
period of not less than 90 consecutive days. The Company shall deliver a notice
to the Trustee promptly after the date on which any Non-payment Default is cured
or waived or ceases to exist or on which the Designated Senior Indebtedness
related thereto is discharged or paid in full, in cash or Cash Equivalents or,
as acceptable to the holders of Senior Indebtedness, in any other manner, and
the Trustee is authorized to act in reliance on such notice.
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(d) In the event that, notwithstanding the foregoing, the
Company or any Subsidiary shall make any payment or distribution to or for the
benefit of the Trustee or the Holder of any Security prohibited by the foregoing
provisions of this Section, then and in such event such payment or distribution
shall be paid over and delivered forthwith to a Senior Representative of the
holders of the Designated Senior Indebtedness or as a court of competent
jurisdiction shall direct.
Section 13.4. Payment Permitted if No Default.
--------------------------------
Nothing contained in this Article, elsewhere in this Indenture
or in any of the Securities shall prevent the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other
winding-up, assignment for the benefit or creditors or other marshaling of
assets and liabilities of the Company referred to in Section 13.2 or under the
conditions described in Section 13.3, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 13.5. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness.
-------------
After the payment in full, in cash or Cash Equivalents or, as
acceptable to the holders of Senior Indebtedness, in any other manner, of all
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of, premium, if any, and interest on, the
Securities shall be paid in full, in cash or Cash Equivalents or, as acceptable
to the holders of Securities, in any other manner. For purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of any cash, property or securities to which the Holders of the Securities or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or account of the Senior Indebtedness.
Section 13.6. Provisions Solely to Define Relative Rights.
--------------------------------------------
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Securities on
the one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of, and premium, if any, and interest on, the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company or the
Holders of the Securities and creditors of the Company other than the
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holders of the Senior Indebtedness; or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Company referred
to in Section 13.2, to receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder, (2) under the conditions specified in Section 13.3, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
13.3(d), or (3) as specified in Section 5.2.
Section 13.7. Trustee to Effectuate Subordination.
------------------------------------
Each Holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file such a claim prior to 30 days before the expiration of the time to
file a claim, the holders of Senior Indebtedness, or any Senior Representative,
may file such a claim on behalf of the Holders of the Securities.
Section 13.8. No Waiver of Subordination Provisions.
--------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section, the holders of Senior Indebtedness may at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter or
increase, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (3) release any Person liable in any manner for
the collection or payment of Senior Indebtedness; and (4) exercise or refrain
from exercising any rights against the Company
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and any other Person; provided, however, that in no event shall any such actions
limit the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities pursuant to Article Five of this
Indenture or to pursue any rights or remedies hereunder or under applicable laws
if the taking of such actions does not otherwise violate the terms of this
Indenture.
(c) The provisions of this Article Thirteen shall be
reinstated if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior Indebtedness
upon the insolvency, bankruptcy or reorganization of the Company or otherwise.
Section 13.9. Notice to Trustee.
------------------
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Indebtedness or from a Senior
Representative or any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section by Noon,
Eastern Time, on the Business Day prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest on any
Security), then, anything herein contained to the contrary notwithstanding but
without limiting the rights and remedies of the holders of Senior Indebtedness,
a Senior Representative or any trustee, fiduciary or agent thereof, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it after such date; nor
shall the Trustee be charged with knowledge of the curing of any such default or
the elimination of the act or condition preventing any such payment unless and
until the Trustee shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to
it of a written notice to the Trustee and the Company by a Person representing
himself to be a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been
given by a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor); provided, however, that failure to give
such notice to the Company shall not affect in any way the ability of the
Trustee to rely on such notice. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable
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satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 13.10. Reliance on Judicial Orders or Certificates.
--------------------------------------------
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other person
making such payment or distribution, or a certificate of a Senior
Representative, delivered to the Trustee or to the Holders of the Securities for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of 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,
provided that the foregoing shall apply only if such court has been fully
appraised of the provisions of this Article.
Section 13.11. Rights of Trustee as a Holder of Senior
---------------------------------------
Indebtedness; Preservation of Trustee's Rights.
-----------------------------------------------
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.7.
Section 13.12. Article Applicable to Paying Agents.
------------------------------------
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting under this
Indenture, the term "Trustee" as used in this Article shall in such case (unless
the context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 13.11 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
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Section 13.13. No Suspensions of Remedies.
---------------------------
Nothing contained in this Article shall limit the right of the
Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Article Five of this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to time, of Senior
Indebtedness to receive the cash, property or securities receivable upon the
exercise of such rights or remedies.
Section 13.14. Trustee's Relation to Senior Indebtedness.
------------------------------------------
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligation as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Article against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the
Trustee shall not be liable to any holder of Senior Indebtedness if it shall in
good faith mistakenly (absent negligence or willful misconduct or violation of
Section 13.9(a)) pay over or deliver to Holders, the Company or any other Person
moneys or assets to which any holder of Senior Indebtedness shall be entitled by
virtue of this Article or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
BALLY TOTAL FITNESS HOLDING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trust Officer
-126-
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)ss:
COUNTY OF NEW YORK )
On the 7th day of October, 1997, before me personally came
▇▇▇▇ ▇. ▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say
that he resides at Illinois; that he is an authorized officer of Bally
Total Fitness Holding Corporation, one of the corporations described in and
which executed the foregoing instrument; that he knows the corporate seal of
such corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed pursuant to authority of the Board of Directors of
such corporation; and that he signed his name thereto pursuant to like
authority.
(NOTARIAL SEAL)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
-----------------------
Notary Public, State of New York
No. __________
Qualified in ___________ County
Commission Expires __________
▇▇▇▇▇ ▇▇▇▇▇▇
Notary Public, State of New York
No. 02BU5070321
Qualified in Kings County
Certificate filed in New York County
Commission Expires December 9, 1998
134
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
On the 7th day of October, 1997, before me personally came
▇▇▇▇▇ ▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say
that she resides at Minnesota; that she is an authorized officer of First Trust
National Association, one of the corporations described in and which executed
the foregoing instrument; that she knows the corporate seal of such corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors of such corporation; and
that she signed her name thereto pursuant to like authority.
(NOTARIAL SEAL)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
-----------------------
Notary Public, State of New York
No. __________
Qualified in ___________ County
Commission Expires ___________
▇▇▇▇▇ ▇▇▇▇▇▇
Notary Public, State of New York
No. 02BU5070321
Qualified in Kings County
Certificate filed in New York County
Commission Expires December 9, 1998
135
SCHEDULE I
Existing Indebtedness
136
BALLY TOTAL FITNESS HOLDING CORPORATION
DEBT SCHEDULE
OCTOBER 7, 1997
Original Maturity
Date of Loan Date of
Lender Borrower Agreement Loan
--------------------------------------------- --------------------------------------- ------------ --------
NON-SUBORDINATED DEBT:
Chase Manhattan Revolving Credit Bally Total Fitness Holding Corporation 6/26/95 6/26/98
Mortgage Notes (secured by real property):
Ohio Savings Bank I (Beachwood) Spa Associates Limited Partnership 7/1/87 10/14/97
Ohio Savings Bank II (Cleveland) Spa Associates Limited Partnership 11/1/87 11/30/97
Union Bank and Trust Bally Total Fitness Corporation 4/15/93 3/31/00
NCB Term Scandinavian Health Spa, Inc. 7/1/86 12/31/02
NCB Scandinavian Health Spa, Inc. 11/1/92 12/31/02
NCB IRB Scandinavian Health Spa, Inc. 12/1/94 12/1/97
Boatmen's Bank (Hilltop) Bally Total Fitness Corporation 8/1/88 7/31/08
Other Secured Debt (secured
by assets other than real property):
Spa Liquidating Trust Holiday Health Clubs of the Southeast, Inc. 10/1/81 3/30/98
Lyon Credit Corporation Bally Total Fitness Holding Corporation 7/29/96 7/29/99
Lyon Credit Corporation Bally Total Fitness Holding Corporation 2/1/97 1/1/00
State of Maryland (Econ Dev Opp) Bally Total Fitness Corporation 1/16/96 1/16/03
A/R Securitization Facility H&T Receivable Funding Corporation 12/16/96 11/15/00
Unsecured Debt:
▇▇▇ ▇▇▇▇▇ One ▇▇▇ ▇▇▇▇▇ International of Cleveland, Inc. 11/1/81 4/30/98
Federal Realty Holiday Universal, Inc. 10/1/83 9/30/98
▇▇▇▇▇▇ ▇▇▇▇▇ Houston Health Clubs, Inc. 9/1/80 6/30/99
Equitable Life Assurance Holiday Health Clubs, Inc. 7/1/97 6/1/12
137
BALLY TOTAL FITNESS HOLDING CORPORATION
ANALYSIS OF LONG-TERM DEBT
OCTOBER 7, 1997
Original Maturity
Date of Loan Date of
Lender Borrower Agreement Loan
--------------------------- ----------------------------------------- -------------- --------------
Capital Leases: Bally Total Fitness Holding Corporation
Life Fitness 1/1/96 12/31/98
Information Leasing Corp 2/1/96 1/31/99
Life Fitness 3/14/96 2/14/99
Life Fitness 4/3/96 3/3/99
Life Fitness 5/4/96 4/4/99
Life Fitness 6/5/96 5/5/99
Life Fitness 6/10/96 5/10/99
Life Fitness 6/18/96 5/18/99
Life Fitness 6/19/96 5/19/99
Life Fitness 6/25/96 5/25/99
Unisys 11/1/95 6/30/99
IBM 8/30/96 9/1/99
Life Fitness 11/1/96 10/1/99
Life Fitness 11/25/96 10/25/99
Life Fitness 12/14/96 11/14/99
Life Fitness 1/1/97 12/1/99
Life Fitness 1/4/97 12/4/99
Life Fitness 1/8/97 12/8/99
Life Fitness 1/16/97 12/16/99
AT&T Capital Corp 2/1/97 1/1/00
Life Fitness 2/4/97 1/4/00
Life Fitness 2/9/97 1/9/00
Life Fitness 2/26/97 1/26/00
Life Fitness 2/27/97 1/27/00
AT&T Riverside 3/1/97 2/1/00
AT&T Galleria 3/15/97 2/15/00
Life Fitness 3/16/97 2/16/00
Life Fitness 3/31/97 2/28/00
Information Leasing Corp 4/1/96 3/31/00
BankVest Capital 4/1/97 4/1/00
Life Fitness 4/10/97 4/10/00
Information Leasing Corp 6/1/97 5/1/00
BankVest Capital 5/1/97 5/1/00
BankVest Capital 5/20/97 5/20/00
BankVest Capital 6/1/97 6/1/00
BankVest Capital 6/10/97 6/10/00
Life Fitness 7/15/97 6/15/00
BankVest Capital 6/20/97 6/20/00
Life Fitness 7/24/97 6/24/00
138
BALLY TOTAL FITNESS HOLDING CORPORATION
ANALYSIS OF LONG-TERM DEBT
OCTOBER 7, 1997
Maturity
Date of Loan Date of
Lender Borrower Agreement Loan
---------------------------------------------- ------------------------------- ----------- -----------
Capital Leases (continued)
Life Fitness 7/25/97 6/25/00
Information Leasing Corp. 8/1/97 7/1/00
BankVest Capital 7/10/97 7/10/00
BankVest Capital 8/1/97 8/1/00
BankVest Capital 8/10/97 8/10/00
Life Fitness 9/24/97 8/24/00
Life Fitness 10/25/97 9/25/00
Life Fitness 10/26/97 9/26/00
Life Fitness 10/27/97 9/27/00
Life Fitness 10/28/97 9/28/00
Cybex 4/1/96 11/15/00
Federal Signs I 12/1/95 11/30/00
Federal Signs II 3/1/96 2/28/01
Federal Signs III 9/1/96 8/1/01
Cybex 12/15/96 10/15/01
Cybex 11/15/96 11/15/01
Cybex 1/15/97 11/15/01
Cybex 2/15/97 12/15/01
G&L Management Company 3/1/97 2/1/02
Cybex 4/15/97 2/15/02
Federal Signs IV 5/1/97 4/1/02
SUBORDINATED DEBT:
Sr. Subordinated Debentures Bally Total Fitness Holding Corp. 1/20/93 1/25/03
INTERCOMPANY LOANS:
Bally Total Fitness Holding Corporation Subsidiaries Various Various
Subsidiaries Bally Total Fitness Holding Corp. Various Various
Subsidiaries Subsidiaries Various Various
* Indicates rate is based on a floating rate.
139
SCHEDULE II
Existing Unrestricted Subsidiaries
140
Exhibit A
---------
Form of Certificate
to be Delivered upon
Termination of Restricted Period
--------------------------------
On or after __________, 1997
[Trustee Name and Address]
Attention:
Re: Bally Total Fitness Holding Corporation (the "Company")
9-7/8% Senior Subordinated Notes due 2007 (the "Securities")
------------------------------------------------------------
Ladies and Gentlemen:
This letter relates to U.S. $_________ principal amount of
Securities represented by the global note certificate (the "Offshore Global
Security"). Pursuant to Section 3.6 of the Indenture dated as of October 7, 1997
relating to the Securities (the "Indenture"), we hereby certify that (1) we are
the beneficial owner of such principal amount of Securities represented by the
Offshore Global Security and (2) we are a person outside the United States to
whom the Securities could be transferred in accordance with Rule 904 of
Regulation S promulgated under the United States Securities Act of 1933, as
amended. Accordingly, you are hereby requested to issue a certificated Security
representing the undersigned's interest in the principal amount of Securities
represented by the Global Security, all in the manner provided by the Indenture.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_________________________
Authorized Signature
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141
Exhibit B
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
---------------------------------------------
------------, ------
Bally Total Fitness Holding Corporation
c/o [Trustee Name and Address]
Attention: Corporate Trust Division
Re: Bally Total Fitness Holding Corporation (the "Company")
9-7/8% Senior Subordinated Notes due 2007 (the "Securities")
------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $__________
aggregate principal amount of the Securities:
1. We understand that the Securities have not been registered
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and may not be sold within the United States or to, or for the benefit
of, U.S. Persons except as permitted in the following sentence. We agree on our
own behalf and on behalf of any investor account for which we are purchasing the
Securities to offer, resell, pledge or otherwise transfer such Securities prior
to the date which is two years after the later of the date of original issue and
the last date on which the Company or any affiliate of the Company was the owner
of such Securities, or any predecessor thereto (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) for so
long as the Securities are eligible for resale pursuant to Rule 144A under the
Securities Act ("Rule 144A"), inside the United States to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) outside the
United States pursuant to offers and sales to non-U.S. Persons in an Offshore
Transaction within the meaning of Regulation S under the Securities Act, (e)
inside the United States to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities
Act that is acquiring the Securities for its own account or for the account of
such an institutional "accredited investor" for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution thereof in
violation
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of the Securities Act or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Trustee, which shall
provide, among other things, that the transferee is an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the Securities pursuant to clauses (d), (e) and (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee. As used herein, the terms "United
States", "Offshore Transaction", and "U.S. Person" have the respective meanings
given to them by Regulation S under the Securities Act.
2. We are an institutional "accredited investor" (as defined
in Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act or the securities laws of any
state of the United States or any other applicable jurisdiction, provided that
the disposition of our property and the property of any accounts for which we
are acting as fiduciary shall remain at all times within our and their control;
and we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. We understand that the Trustee will not be required to
accept for registration of transfer any Securities acquired by us, except upon
presentation of evidence satisfactory to the Company and the Trustee that the
foregoing restrictions on transfer have been complied with. We further
understand that the Securities purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph. We further agree to provide to any person
acquiring any of the Securities from us a notice advising such person that
resales of the Securities are restricted as stated herein and that certificates
representing the Notes will bear a legend to that effect.
B-2
143
5. We acknowledge that you, the Company, the Trustee and
others will rely upon our acknowledgments, representations and agreements set
forth herein, and we agree to notify you promptly in writing if any of our
acknowledgments, representations or agreements herein cease to be accurate and
complete.
6. We represent to you that we have full power to make the
foregoing acknowledgments, representations and agreements on our own behalf and
on behalf of any investor account for which we are acting as a fiduciary or
agent.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
By:
-------------------------------
(Name of Purchaser)
Date:
------------------------------
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144
Upon transfer, the Securities should be registered in the name
of the new beneficial owner as follows:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Taxpayer ID Number:
-------------------------------------------------------------
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145
Exhibit C
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------------------------
---------------, -------
[Trustee Name and Address]
Attention:
Re: Bally Total Fitness Holding Corporation (the "Company")
9-7/8% Senior Subordinated Notes due 2007 (the "Securities")
------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____________
aggregate principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S ("Regulation S") under
the United States Securities Act of 1933, as amended, and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a
person in the United States;
(2) either (a) at the time the buy order was
originated, the transferee was outside the United States or we
and any person acting on our behalf reasonably believed that
the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any
person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme
to evade the registration requirements of the United States
Securities Act of 1933, as amended.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has
C-1
146
been made in accordance with the applicable provisions of Rule 903(c)(2) or Rule
904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------------
Authorized Signature
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147
APPENDIX I
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
-----------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
---------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
---------------------------------------------------------------------
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR SERIES A SECURITIES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Security occurring
prior to the date which is the earlier of the date of an effective Registration
Statement or October 7, 1999, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the United States Securities Act
of 1993, as amended, provided by Rule 144A thereunder.
or
--
I-1
148
[ ] (b) Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the
Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 3.7 of the Indenture
shall have been satisfied.
Date:
-------------------
----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee:
-----------------------
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A ("Rule 144A")
under the United States Securities Act of 1933, as amended, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
------------------ ----------------------------------------------------
NOTICE: To be executed by an authorized signatory
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149
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Security to:
---------------------------------------------
Please insert social security or other identifying number of assignee
---------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Print or type name, address and zip code of assignee and irrevocably appoint
-----------------------------------------------------------------------------
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated Signed
---------------- -----------------------------------
(Sign exactly as name appears on the other side of this Security)
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
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150
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of October 7, 1997
Trust Indenture Indenture
Act Section Section
--------------- ---------
Section 310 (a)(1)......................................................6.9
(a)(2)......................................................6.9
(a)(5)......................................................6.9
(b)...................................................6.7, 6.10
Section 311 (a)........................................................6.13
(b)........................................................6.13
Section 312 (a).........................................................7.1
(b).........................................................7.2
(c).........................................................7.2
Section 313 (a).........................................................7.3
(b).........................................................7.3
(c).........................................................7.3
(d).........................................................7.3
Section 314 (a)(1)......................................................7.4
(a)(2)......................................................7.4
(a)(3)......................................................7.4
(a)(4) ...................................................10.18
(c)(1)......................................................1.3
(c)(2)......................................................1.3
(e).........................................................1.3
Section 315 (a).........................................................6.1
(b).........................................................6.2
(c).........................................................6.1
(d)....................................................6.1, 6.3
(e)........................................................5.14
Section 316 (a) (last sentence).........................1.1 ("Outstanding")
(a)(1)(A)..................................................5.12
(a)(2)(B)..................................................5.13
(b).........................................................5.8
(c).........................................................1.5
Section 317 (a)(1)......................................................5.3
(a)(2)......................................................5.4
(b)........................................................10.3
Section 318 (a).........................................................1.8
-------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Indenture.
II-2