EXHIBIT 4.2
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CORRECTIONS CORPORATION OF AMERICA
AND EACH OF THE GUARANTORS NAMED HEREIN
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FIRST SUPPLEMENTAL INDENTURE
Dated as of January 23, 2006
6.75% SENIOR NOTES DUE 2014
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U.S. BANK NATIONAL ASSOCIATION
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1).................................................................. 7.10
(a)(2).................................................................. 7.10
(a)(3).................................................................. N.A.
(a)(4).................................................................. N.A.
(a)(5).................................................................. 7.10
(b)..................................................................... 7.10
(c)..................................................................... N.A.
311(a)..................................................................... 7.11
(b)..................................................................... 7.11
(c)..................................................................... N.A.
312(a)..................................................................... 2.05
(b)..................................................................... 12.03
(c)..................................................................... 12.03
313(a)..................................................................... 7.06
(b)(2).................................................................. 7.06; 7.07
(c)..................................................................... 7.06; 12.02
(d)..................................................................... 7.06
314(a)..................................................................... 4.03; 12.02; 12.05
(c)(1).................................................................. 12.04
(c)(2).................................................................. 12.04
(c)(3).................................................................. N.A.
(e)..................................................................... 12.05
(f)..................................................................... N.A.
315(a)..................................................................... 7.01
(b)..................................................................... 7.05; 12.02
(c)..................................................................... 7.01
(d)..................................................................... 7.01
(e)..................................................................... 6.11
316(a) (last sentence)..................................................... 2.09
(a)(1)(A)............................................................... 6.05
(a)(1)(B)............................................................... 6.04
(a)(2).................................................................. N.A.
(b)..................................................................... 6.07
(c)..................................................................... 2.12
317(a)(1).................................................................. 6.08
(a)(2).................................................................. 6.09
(b)..................................................................... 2.04
318(a)..................................................................... 12.01
(b)..................................................................... N.A.
(c)..................................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions............................................... 1
Section 1.02 Other Definitions......................................... 21
Section 1.03 Incorporation by Reference of Trust Indenture Act......... 22
Section 1.04 Rules of Construction..................................... 22
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating........................................... 22
Section 2.02 Execution and Authentication.............................. 23
Section 2.03 Registrar and Paying Agent................................ 23
Section 2.04 Paying Agent to Hold Money in Trust....................... 24
Section 2.05 Holder Lists.............................................. 24
Section 2.06 Transfer and Exchange..................................... 24
Section 2.07 Replacement Notes......................................... 27
Section 2.08 Outstanding Notes......................................... 28
Section 2.09 Treasury Notes............................................ 28
Section 2.10 Temporary Notes........................................... 28
Section 2.11 Cancellation.............................................. 28
Section 2.12 Defaulted Interest........................................ 29
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee........................................ 29
Section 3.02 Selection of Notes to Be Redeemed or Purchased............ 29
Section 3.03 Notice of Redemption...................................... 30
Section 3.04 Effect of Notice of Redemption............................ 30
Section 3.05 Deposit of Redemption or Purchase Price................... 31
Section 3.06 Notes Redeemed or Purchased in Part....................... 31
Section 3.07 Optional Redemption....................................... 31
Section 3.08 Mandatory Redemption...................................... 32
Section 3.09 Offer to Purchase by Application of Excess Proceeds....... 32
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.......................................... 33
Section 4.02 Maintenance of Office or Agency........................... 34
Section 4.03 Reports................................................... 34
Section 4.04 Compliance Certificate.................................... 35
Section 4.05 Taxes..................................................... 36
Section 4.06 Stay, Extension and Usury Laws............................ 36
Section 4.07 Changes in Covenants when Notes Rated Investment Grade.... 36
Section 4.08 Restricted Payments....................................... 37
Section 4.09 Dividend and Other Payment Restrictions Affecting
Subsidiaries.............................................. 40
Section 4.10 Incurrence of Indebtedness and Issuance of Preferred
Stock..................................................... 42
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Section 4.11 Asset Sales............................................... 44
Section 4.12 Transactions with Affiliates.............................. 46
Section 4.13 Liens..................................................... 47
Section 4.14 Business Activities....................................... 47
Section 4.15 Corporate Existence....................................... 47
Section 4.16 Offer to Repurchase Upon Change of Control................ 47
Section 4.17 Limitation on Sale and Leaseback Transactions............. 49
Section 4.18 Payments for Consent...................................... 49
Section 4.19 Additional Subsidiary Guarantees.......................... 50
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries... 50
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.................. 50
Section 5.02 Successor Corporation Substituted......................... 51
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default......................................... 51
Section 6.02 Acceleration.............................................. 53
Section 6.03 Other Remedies............................................ 53
Section 6.04 Waiver of Past Defaults................................... 53
Section 6.05 Control by Majority....................................... 54
Section 6.06 Limitation on Suits....................................... 54
Section 6.07 Rights of Holders of Notes to Receive Payment............. 54
Section 6.08 Collection Suit by Trustee................................ 54
Section 6.09 Trustee May File Proofs of Claim.......................... 55
Section 6.10 Priorities................................................ 55
Section 6.11 Undertaking for Costs..................................... 55
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee......................................... 56
Section 7.02 Rights of Trustee......................................... 57
Section 7.03 Individual Rights of Trustee.............................. 57
Section 7.04 Trustee's Disclaimer...................................... 58
Section 7.05 Notice of Defaults........................................ 58
Section 7.06 Reports by Trustee to Holders of the Notes................ 58
Section 7.07 Compensation and Indemnity................................ 58
Section 7.08 Replacement of Trustee.................................... 59
Section 7.09 Successor Trustee by Merger, etc.......................... 60
Section 7.10 Eligibility; Disqualification............................. 60
Section 7.11 Preferential Collection of Claims Against Company......... 60
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.. 60
Section 8.02 Legal Defeasance and Discharge............................ 61
Section 8.03 Covenant Defeasance....................................... 61
Section 8.04 Conditions to Legal or Covenant Defeasance................ 62
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Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions..................... 63
Section 8.06 Repayment to Company...................................... 63
Section 8.07 Reinstatement............................................. 63
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes....................... 64
Section 9.02 With Consent of Holders of Notes.......................... 65
Section 9.03 Compliance with Trust Indenture Act....................... 66
Section 9.04 Revocation and Effect of Consents......................... 66
Section 9.05 Notation on or Exchange of Notes.......................... 66
Section 9.06 Trustee to Sign Amendments, etc........................... 66
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01. Guarantee................................................. 67
Section 10.02 Limitation on Guarantor Liability......................... 68
Section 10.03 Execution and Delivery of Subsidiary Guarantee............ 68
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms........ 68
Section 10.05 Releases Following Sale of Assets......................... 69
ARTICLE 11
satisfaction and discharge
Section 11.01 Satisfaction and Discharge................................ 70
Section 11.02 Application of Trust Money................................ 71
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.............................. 71
Section 12.02 Notices................................................... 71
Section 12.03 Communication by Holders of Notes with Other Holders of
Notes..................................................... 72
Section 12.04 Certificate and Opinion as to Conditions Precedent........ 72
Section 12.05 Statements Required in Certificate or Opinion............. 73
Section 12.06 Rules by Trustee and Agents............................... 73
Section 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders.......................................... 73
Section 12.08 Governing Law............................................. 73
Section 12.09 No Adverse Interpretation of Other Agreements............. 74
Section 12.10 Successors................................................ 74
Section 12.11 Severability.............................................. 74
Section 12.12 Counterpart Originals..................................... 74
Section 12.13 Table of Contents, Headings, etc.......................... 74
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF NOTATION OF GUARANTEE
Exhibit C FORM OF SUPPLEMENTAL INDENTURE
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FIRST SUPPLEMENTAL INDENTURE dated as of January 23, 2006 among Corrections
Corporation of America, a Maryland corporation (the "Company"), the Guarantors
(as defined herein) and U.S. Bank National Association, as trustee (the
"Trustee").
WHEREAS, the Company, the Guarantors and the Trustee have entered into a
Base Indenture, dated as of January 23, 2006 (the "Base Indenture" and, as
amended and supplemented by this First Supplemental Indenture, the "Indenture");
WHEREAS, Sections 2.02 and 9.01 of the Base Indenture provide, among other
things, that the Company, the Guarantors and the Trustee may enter into a
supplemental indenture to the Base Indenture for, among other things, the
purpose of establishing the designation, form, terms and provisions of
Securities (as defined in the Base Indenture) of any Series (as defined in the
Base Indenture) as permitted by Sections 2.02 and 9.01 of the Base Indenture;
WHEREAS, clause (5) of Section 9.01 of the Base Indenture provides that the
Company, the Guarantors and the Trustee may enter into a supplemental indenture
changing or eliminating any provision of the Base Indenture; provided, that any
such change shall become effective only when there is no Security Outstanding
(as defined in the Base Indenture);
WHEREAS, at the time this First Supplemental Indenture is being executed
and delivered there are no Securities Outstanding;
WHEREAS, the Company desires to establish and issue a new Series of the
Company's 6.75% Senior Notes due 2014 (the "Notes") pursuant to the Base
Indenture, as modified by this First Supplemental Indenture; and
WHEREAS, the Company and the Guarantors desire to enter into a supplemental
indenture pursuant to Sections 2.01 and 9.01 of the Base Indenture to establish
the designation, form, terms and provisions of the Notes and to make deletions,
modifications and additions to the Base Indenture pertaining to the Notes, as
contemplated by Sections 2.02 and 9.01 of the Base Indenture;
NOW, THEREFORE, in consideration of the foregoing, the parties hereto, for
the benefit of each other and for the equal and proportionate benefit of all
Persons who hereafter become Holders (as defined herein) of Notes, hereby enter
into this First Supplemental Indenture, which amends, modifies, supplements and
restates (as applicable) the Base Indenture with respect to (and only with
respect to) the Notes, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
in contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
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(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Additional Notes" means any Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.10 hereof, as part
of the same Series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights of the Company and/or any Restricted Subsidiary, other than sales of
inventory in the ordinary course of business consistent with past
practices; provided that the sale, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by Sections 4.16 and 5.01
hereof and not by the provisions of Section 4.11 hereof; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, the following items will not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves the sale of assets or the issuance or sale of Equity Interests of
a Restricted Subsidiary having a fair market value of less than $10.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents; and
(6) a Permitted Investment or a Restricted Payment that is permitted
by Section 4.08 hereof.
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"Asset Swap" means an exchange of assets other than cash, Cash Equivalents
or Equity Interests of the Company or any Subsidiary by the Company or a
Restricted Subsidiary of the Company for:
(1) one or more Permitted Businesses;
(2) a controlling equity interest in any Person whose assets consist
primarily of one or more Permitted Businesses; and/or
(3) one or more real estate properties
Attributable Debt" in respect of a Sale and Leaseback Transaction means, at
the time of determination, the present value of the obligation of the lessee for
net rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.
"Auction Rate Securities" means any debt instruments with a long-term
nominal maturity for which the interest rate is reset through a "dutch auction"
process with interest on such Auction Rate Securities being paid at the end of
each such auction period; provided, however, that such Auction Rate Securities
shall have, at the time of purchase, one of the two highest rating categories
obtainable from either ▇▇▇▇▇'▇ or S&P.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Base Indenture" has the meaning set forth in the recitals hereto.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
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"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) Government Securities having maturities of not more than one year
from the date of acquisition;
(3) readily marketable direct obligations issued by any state of the
United States of America or any political subdivision thereof having one of
the two highest rating categories obtainable from either ▇▇▇▇▇'▇ or S&P
with maturities of 12 months or less from the date of acquisition;
(4) Auction Rate Securities;
(5) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any lender party to the Old Credit Agreement
or the New Credit Agreement or with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of "B" or better;
(6) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(7) commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇
or S&P and in each case maturing within one year after the date of
acquisition; and
(8) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (7) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries, taken
as a whole, to any "person" (as that term is used in Section 13(d)(3) of
the Exchange Act);
(2) the approval by the holders of the Voting Stock of the Company of
a plan relating to the liquidation or dissolution of the Company or if no
such approval is required the
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adoption of a plan relating to the liquidation or dissolution of the
Company by its Board of Directors;
(3) the consummation of any transaction (including without limitation
any merger or consolidation) the result of which is that any "person" (as
that term is used in Section 13(d)(3) of the Exchange Act) becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of the Company;
(4) the Company consolidates with, or merges with or into, any Person,
or any Person consolidated with, or merger with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding
Voting Stock of the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately
prior to such transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee Person
constituting a 45% or more of the outstanding shares of such Voting Stock
of such surviving or transferee Person (immediately after giving effect to
such issuance); or
(5) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"Company" means Corrections Corporation of America, a Maryland corporation,
and any and all successors thereto.
"Consolidated Cash Flow" means with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period, plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received pursuant
to Hedging Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid in a
prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; minus
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(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business,
in each case, on a consolidated basis and determined in accordance with
GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or Restricted
Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will be
excluded;
(4) the cumulative effect of a change in accounting principles will be
excluded; and
(5) the Net Income or loss of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries.
"Consolidated Tangible Assets" means the total assets, less goodwill and
other intangibles, shown on the Company's most recent consolidated balance
sheet, determined on a consolidated basis in accordance with GAAP less all
write-ups (other than write-ups in connection with acquisitions) subsequent to
the date of this Indenture in the book value of any asset (except any such
intangible assets) owned by the Company or any of the Company's Restricted
Subsidiaries.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Old Credit Agreement and the New Credit Agreement) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow
6
from such lenders against such receivables) or letters of credit, in each case,
as amended (and/or amended and restated), restated, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise) or refinanced
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Assets" means those correctional facilities owned by the
Company that are located in San Diego, California; Walsenburg, Colorado;
▇▇▇▇▇▇▇, Georgia; Alamo, Georgia; Tutweiler, Mississippi; Shelby, Montana;
▇▇▇▇▇▇▇, Oklahoma; Holdenville, Oklahoma; Memphis, Tennessee; Washington, D.C.;
and Whiteville, Tennessee and such other correctional facilities acquired by the
Company after March 8, 2005, in each case so long as, and to the extent that,
the Company or a Restricted Subsidiary has granted an option to purchase such
facility (or provided for the reversion of the Company's ownership interest in
all or a portion of such facility) pursuant to a Designated Asset Contract.
"Designated Asset Contract" means each of the following contracts pursuant
to which the Company has granted (a) an option to purchase a Designated Asset
for the Designated Asset Value or (b) a right of reversion of all or a portion
of the Company's ownership in such Designated Assets, in each case as in effect
on the date of this Indenture: Standard Form Lease Agreement, East Mesa
Detention Facility, dated October 30, 1997, between the County of San Diego and
the Company; Lease Agreement, dated April 30, 1996, between Huerfano County and
the Company; Request for Proposal Number ▇▇▇▇-▇▇▇-▇▇▇▇▇▇ Issues on Behalf of the
Georgia Department of Corrections re: Bid of Private Prisons in Coffee and
▇▇▇▇▇▇▇ Counties; Contract No. 467-019-955259-1, dated July 24, 1996, between
the Georgia Department of Corrections and the Company; Contract No.
467-019-955259-2, dated July 24, 1996, between the Georgia Department of
Corrections and the Company; Agreement, dated October 6, 1998, between the
Tallahatchie County Correctional Authority and the Company, as amended by that
certain Amendment No. 1 to Agreement dated May 18, 2000, between the
Tallahatchie County Correctional Authority and the Company; Contract for
Facility Development -- Design, Build, dated July 22, 1998, between the Montana
Department of Corrections and the Company; Contractual Agreement, dated July 1,
1997, between the State of Oklahoma Department of Corrections and the Company;
Correctional Services Contract, dated July 1, 1998, between the State of
Oklahoma Department of Corrections and the Company; Lease Agreement, dated April
15, 1985, between the County of Shelby and the Company; Contract, dated February
25, 1986, between the Tennessee Department of Finance and Administration and the
Company; Lease Agreement, dated January 1997, between the District of Columbia
and the Company; Incarceration Agreement, dated October 23, 2002, between the
State of Tennessee, Department of Correction and ▇▇▇▇▇▇▇▇ County, Tennessee and
the related Contract for the Lease of Whiteville Correctional Facility, dated
October 9, 2002, between ▇▇▇▇▇▇▇▇ County, Tennessee and the Company;
7
and any contract entered into after March 8, 2005 under which the Company has
granted (a) an option to purchase a Designated Asset for the Designated Asset
Value or (b) a right of reversion of all or a portion of the Company's ownership
in such Designated Assets; provided, however, that such contract is entered into
in the ordinary course of business, is consistent with past practices and is
preceded by a resolution of the Board of Directors of the Company set forth in
an Officers' Certificate certifying that such contract has been approved by a
majority of the members of the Board of Directors and the option to purchase or
right to reversion in such contract is on terms the Board of Directors has
determined to be reasonable and in the best interest of the Company.
"Designated Asset Value" means the aggregate consideration specified in a
Designated Asset Contract to be received by the Company upon the exercise of an
option to acquire a Designated Asset pursuant to the terms of a Designated Asset
Contract.
"Designated Non-Cash Consideration" means the fair market value of total
consideration received by the Company or any of the Company's Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Non-Cash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, executed by the Company's principal executive
Officer or principal financial Officer, less the amount of cash or Cash
Equivalents received in connection with the Asset Sale; provided, however, that
if the Designated Non-Cash Consideration is in the form of Indebtedness the
total amount of such Designated Non-Cash Consideration outstanding at one time
shall not exceed the greater of $15.0 million and 2.5% of Consolidated Tangible
Assets.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.08 hereof.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company that
was formed under the laws of the United States or any state of the United States
(but not the laws of Puerto Rico) or the District of Columbia or that guarantees
or otherwise provides direct credit support for any Indebtedness of the Company.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering by a Person of its shares of Equity
Interests (other than Disqualified Stock) however designated and whether voting
or non-voting, and any and all rights, warrants or options to acquire such
Equity Interests (other than Disqualified Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means the Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Old Credit Agreement)
in existence on the date of this Indenture, until such amounts are repaid.
8
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date will be given pro forma effect as if they had occurred
on the first day of the four-quarter reference period and Consolidated Cash
Flow for such reference period will be calculated without giving effect to
clause (3) of the proviso set forth in the definition of Consolidated Net
Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
For purposes of making the computations referred to above, the pro forma
change in Consolidated Cash Flow projected by the Company in good faith as a
result of reasonably identifiable and factually supportable cost savings and
costs, as the case may be, expected to be realized during the consecutive
four-quarter period commencing after such acquisition or transaction (the
"Savings Period") will be included in such calculation for any reference period
that includes any of the Savings Period; provided that any such pro forma change
to such Consolidated Cash Flow will be without duplication for cost savings and
costs actually realized and already included in such Consolidated Cash Flow. If
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) will have made any Investment,
acquisition, disposition, merger, consolidation or discontinued operation that
would have required adjustment pursuant to this definition, then the Fixed
Charge Coverage Ratio will be calculated giving pro forma effect thereto for
such period as if such Investment, acquisition, disposition, merger,
consolidation or discontinued operation had occurred at the beginning of the
applicable four-quarter period.
"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:
9
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect
of letters of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations,
but excluding amortization of debt issuance costs and original issue
discount and other non-cash interest payments; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than (i) dividends on Equity
Interests payable in Equity Interests of the Company (other than
Disqualified Stock) or (ii) dividends to the Company or a Restricted
Subsidiary of the Company, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined
federal, state and local effective cash tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession as amended and/or modified from time to time.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the Global
Notes, substantially in the form of Exhibit A hereto, issued in accordance with
Section 2.01 hereof.
"Government Securities" means securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality of the United States government (provided that the full faith
and credit of the United States is pledged in support of those securities).
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness, but not any Indebtedness of the
Company under the Forward Delivery Deficits Agreement, dated as of September 25,
1997, by and between the Company and Wachovia Bank, National Association
(formerly known as "First Union National Bank"), as trustee, or under the Debt
Service Deficits Agreement, dated as of January 1, 1997, by and between the
Company and ▇▇▇▇▇▇▇▇ County Correctional Facilities Corporation, each as in
effect on the date of this Indenture, provided that and for so long as such
Indebtedness is not required to be classified as debt of the Company or any
Restricted Subsidiary pursuant to GAAP.
10
"Guarantors" means each of:
(1) the guarantors listed on the signature pages hereto; and
(2) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture,
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means with respect to any specified Person, any indebtedness
of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness; and
11
(3) with respect to Hedging Obligations, the amount of Indebtedness
required to be recorded as a liability in accordance with GAAP.
"Indenture" means the Base Indenture, as amended and supplemented by this
First Supplemental Indenture and one or more supplemental indentures thereto
applicable to the Notes, if any.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $150.0 million aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Investments" means with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP and include the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary. If the
Company or any Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.08 hereof. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person shall be deemed to be an Investment by the
Company or such Subsidiary in such third Person in an amount equal to the fair
market value of the Investment held by the acquired Person in such third Person
in an amount determined as provided in the final paragraph of Section 4.08
hereof.
"Issue Date" means January 23, 2006.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or in Boston, Massachusetts or at a place
of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Income" means, with respect to any specified Person for any period,
the net income (loss) of such Person, determined in accordance with GAAP and
before any reduction in respect of preferred stock dividends, excluding,
however:
12
(1) any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with: (a) any Asset Sale; or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or
any of its Restricted Subsidiaries;
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss;
(3) any loss resulting from impairment of goodwill recorded on the
consolidated financial statement of a Person pursuant to SFAS No. 142
"Goodwill and Other Intangible Assets";
(4) any loss resulting from the change in fair value of a derivative
financial instrument pursuant to SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities"; and
(5) amortization of debt issuance costs.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration, including Designated Non-Cash
Consideration received in any Asset Sale and deemed to be cash pursuant to and
in compliance with Section 4.11 hereof), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result of the Asset Sale, taxes paid or payable as a result of the Asset Sale,
in each case, after taking into account any available tax credits or deductions
and any tax sharing arrangements, and amounts required to be applied to the
repayment of Indebtedness, other than Indebtedness under a Credit Facility,
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"New Credit Agreement" means the credit agreement that the Company intends
to enter into with Wachovia Bank, National Association, as administrative agent,
and certain lenders and other parties thereto, and any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended (and/or amended and restated),
modified, renewed, refunded, replaced or refinanced from time to time, in whole
or in part, with the same or different lenders (including, without limitation,
any amendment, amendment and restatement, modification, renewal, refunding,
replacement or refinancing that increases the maximum amount of the loans made
or to be made thereunder).
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness of the Company or
13
any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 12.05
hereof.
"Old Credit Agreement" means that certain Third Amended and Restated Credit
Agreement dated May 3, 2002, by and among the Company and ▇▇▇▇▇▇ Commercial
Paper Inc., and other parties thereto, as amended and restated from time to
time, including that certain Seventh Amendment and Consent to Third Amended and
Restated Credit Agreement, dated March 8, 2005, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended (and/or amended and restated),
modified, renewed, refunded, replaced or refinanced from time to time, in whole
or in part, with the same or different lenders (including, without limitation,
any amendment, amendment and restatement, modification, renewal, refunding,
replacement or refinancing that increases the maximum amount of the loans made
or to be made thereunder).
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Participant" means, with respect to the Depositary, a Person who has an
account with the Depositary.
"Permitted Business" means the business conducted by the Company and its
Restricted Subsidiaries on the date of this Indenture and businesses reasonably
related thereto or ancillary or incidental thereto or a reasonable extension
thereof, including the privatization of governmental services.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of the
Company;
14
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company;
or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, the Company or any Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of non-cash
consideration (including Designated Non-Cash Consideration) from an Asset
Sale that was made pursuant to and in compliance with Section 4.11 hereof;
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company;
(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) other Investments in any other Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (8) not to exceed
$35.0 million;
(9) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(10) loans or advances to employees made in the ordinary course of
business of the Company or any Restricted Subsidiary not to exceed $5.0
million outstanding at any one time for all loans or advances under this
clause (10);
(11) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments or pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of a debtor;
(12) Investments in existence on the date of this Indenture;
(13) Guarantees issued in accordance with Section 4.10 hereof;
(14) Investments that are made with Equity Interests of the Company
(other than Disqualified Stock of the Company);
15
(15) any Investment by the Company or any Restricted Subsidiary of the
Company in a joint venture in a Permitted Business not to exceed $15.0
million outstanding at any one time; and;
(16) any Investment in any Person that is not at the time of such
Investment, or does not thereby become, a Restricted Subsidiary in an
aggregate amount (measured on the date such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (16) since the date of first
issuance of the Notes (but, to the extent that any Investment made pursuant
to this clause (16) since the date of first issuance of the Notes is sold
or otherwise liquidated for cash, minus the lesser of (a) the cash return
of capital with respect to such Investment (less the cost of disposition,
if any) and (b) the initial amount of such Investment) not to exceed 10% of
Consolidated Tangible Assets; provided that, the Company or a Restricted
Subsidiary of the Company has entered, or concurrently with any such
Investment, enters into a long-term lease or management contract with
respect to assets of such Person that are used or useful in a Permitted
Business.
"Permitted Liens" means:
(1) Liens on real or personal property of the Company and any
Guarantor securing Indebtedness and other Obligations under Credit
Facilities that were permitted by the terms of this Indenture to be
incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior
to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with
the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of
such acquisition;
(5) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of Section 4.10(b) hereof covering only the assets
acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(9) Liens securing Permitted Refinancing Indebtedness; provided that
any such Lien does not extend to or cover any property, Capital Stock or
Indebtedness other than the property, shares or debt securing the
Indebtedness so refunded, refinanced or extended;
16
(10) Attachment or judgment Liens not giving rise to a Default or an
Event of Default;
(11) Liens on the Capital Stock of Unrestricted Subsidiaries;
(12) Liens incurred in the ordinary course of business of the Company
or any Subsidiary of the Company with respect to obligations that do not
exceed $15.0 million at any one time outstanding;
(13) pledges or deposits under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which the Company or any Restricted Subsidiary
is a party, or deposits to secure public or statutory obligations of the
Company or any Restricted Subsidiary or deposits or cash or Government
Securities to secure surety or appeal bonds to which the Company or any
Restricted Subsidiary is a party, or deposits as security for contested
taxes or import or customs duties or for the payment of rent, in each case
incurred in the ordinary course of business;
(14) Liens imposed by law, including carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings if a reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made in
respect thereof;
(15) encumbrances, easements or reservations of, or rights of others
for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions
as to the use of real properties or liens incidental to the conduct of the
business of the Company or a Restricted Subsidiary or to the ownership of
its properties which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of the Company or such Restricted Subsidiary;
(16) Liens securing Hedging Obligations so long as the related
Indebtedness was incurred in compliance with Section 4.10 hereof;
(17) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries; and
(18) normal customary rights of setoff upon deposits of cash in favor
of banks or other depository institutions.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in repayment of, exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace, repay,
defease or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness and Disqualified Stock of the
Company or a Restricted Subsidiary); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, repaid, defeased or refunded (plus all accrued interest
on the Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
17
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, repaid,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
repaid defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, repaid, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, repaid, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PMI Notes" means those certain 4.0% convertible subordinated notes due
February 28, 2005 issued pursuant to that certain Note Purchase Agreement, dated
as of December 31, 1998, as amended on June 30, 2000, March 5, 2001 and April
28, 2003, between the Company and PMI Mezzanine Fund, L.P.
"Prospectus Supplement" means the Prospectus Supplement, dated January 18,
2006, related to the issuance and sale of the Notes.
"Qualified Trust" means a trust or other special purpose vehicle formed for
the sole purpose of, and which is limited by its charter or other organizational
documents to conduct no business other than, issuing Qualified Trust Preferred
Stock and lending the proceeds from such issuance to the Company.
"Qualified Trust Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary to a Qualified Trust (a) in an aggregate principal amount
not exceeding the amount of funds raised by such trust from the issuance of
Qualified Trust Preferred Stock and (b) that by its terms (or by the terms of
any security into which it is convertible, or for which it is exchangeable, in
each case at the option of the Qualified Trust or the holder of any Qualified
Trust Preferred Stock), or upon the happening of any event, does not mature and
is not mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the Qualified Trust or any holder of
the Qualified Trust Preferred Stock, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature; provided that
such Qualified Trust Indebtedness may be redeemed pursuant to its terms upon a
change of control of the Company if the terms of such Qualified Trust
Indebtedness (a) define a "change of control" in a manner that is not more
expansive than the definition contained in this Indenture and (b) explicitly
provide that no payment shall be made with respect to such indebtedness upon a
change of control unless and until the Company has complied with Section 4.16
hereof and purchases all Notes properly tendered and not withdrawn pursuant to a
Change of Control Offer to the extent required by this Indenture.
"Qualified Trust Preferred Stock" means a preferred stock or preferred
interest in a Qualified Trust the net proceeds from the issuance of which are
used to finance Qualified Trust Indebtedness and that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Qualified Trust
Preferred Stock), or upon the happening of any event, does not mature and is not
mandatorily redeemable, pursuant to a sinking fund
18
obligation or otherwise, or redeemable at the option of the holder of the
Qualified Trust Preferred Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor group
of the Trustee) with direct responsibility for the administration of this
Indenture and, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of the Company means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
relating to property now owned or hereafter acquired by the Company or a
Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers
such property to another Person and the Company or a Restricted Subsidiary
leases it from such Person other than a lease properly characterized pursuant to
GAAP as a capital lease obligation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the 8% Series A Cumulative Preferred Stock
of the Company described in the Company's Amended and Restated Charter.
"Series B Preferred Stock" means the Series B Cumulative Convertible
Preferred Stock of the Company described in the Company's Amended and Restated
Charter.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
19
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"Subsidiary Guarantee" means, individually, any Guarantee of payment of the
Notes by a Guarantor pursuant to the terms of the Indenture, and, collectively,
all such Guarantees.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Unoccupied Facility" means any prison facility owned by the Company or a
Restricted Subsidiary which for the twelve month period ending on the date of
measurement has had an average occupancy level of less than 15%.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.08 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.10 hereof, the Company shall be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under Section 4.10 hereof, calculated on a pro forma
basis as if such
20
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, or liquidation preference, as the case may
be, including payment at final maturity, in respect of the Indebtedness, by
(b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by
(2) the then outstanding aggregate principal amount or liquidation
preference, as the case may be, of such Indebtedness.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"............ 4.12
"Asset Sale Offer"................. 3.09
"Authentication Order"............. 2.02
"Change of Control Offer".......... 4.16
"Change of Control Payment"........ 4.16
"Change of Control Payment Date"... 4.16
"Covenant Defeasance".............. 8.03
"DTC".............................. 2.03
"Event of Default"................. 6.01
"Excess Proceeds".................. 4.11
"Fall Away Covenants".............. 4.07
"incur"............................ 4.10
"Legal Defeasance"................. 8.02
"Offer Amount"..................... 3.09
"Offer Period"..................... 3.09
"Paying Agent"..................... 2.03
"Permitted Debt"................... 4.10
"Purchase Date".................... 3.09
"Registrar"........................ 2.03
"Restricted Payments".............. 4.08
21
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication will
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
will be dated the date of its authentication. The Notes shall be in
denominations of $2,000 and integral multiples of $1,000 in excess thereof.
22
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
Section 2.02 Execution and Authentication.
An Officer must sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed by
an Officers (an "Authentication Order"), authenticate Notes for original issue.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
will keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company will notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
23
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) will have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it will
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee will serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders
and shall otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Company will furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary; or
(2) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Trustee.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
24
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Transfers of beneficial interests in
the Global Notes also will require compliance with subparagraph (1) below, as
well as one or more of the other following subparagraphs, as applicable.
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in a Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in a Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.06(b)(1).
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes. If
any holder of a beneficial interest in a Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive
Note, then the Trustee will cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section 2.06(g)
hereof, and the Company will execute and the Trustee will authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c) will be registered in such
name or names and in such authorized denomination or denominations as the holder
of such beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant. The
Trustee will deliver such Definitive Notes to the Persons in whose names such
Notes are so registered.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests. A
Holder of Definitive Note may exchange such Note for a beneficial interest in a
Global Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee will cancel
the applicable Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Global Notes. If any such exchange or
transfer from a Definitive Note to a beneficial interest is effected pursuant to
this paragraph at a time when a Global Note has not yet been issued, the Company
will issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee will authenticate one or more Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e). A Holder of Definitive Notes may transfer such Notes to a Person who
takes delivery thereof in the form of a Definitive Note. Upon receipt of a
request to register such a transfer, the Registrar shall register the Definitive
Notes pursuant to the instructions from the Holder thereof
(f) Legends. Each Global Note will bear a legend in substantially the
following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
25
ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(g) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(h) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 hereof or at the Registrar's request.
(2) No service charge will be made to a Holder of a Global Note or to
a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.11, 4.16
and 9.05 hereof).
26
(3) The Registrar will not be required to register the transfer of or
exchange of any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes will be the
valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption or purchase
under Section 3.02 hereof and ending at the close of business on the
day of selection;
(B) to register the transfer of or to exchange any Note selected
for redemption or purchase in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
(9) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restriction on transfer imposed under
this Indenture or under applicable law with respect to any transfer of any
interest in any Note (including transfers between or among beneficial
owners of interests in any Global Note) other than to require delivery of
such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of,
this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an affidavit of
loss and an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to
27
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes. After
preparation of Definitive Notes, the temporary Notes will be exchangeable for
definitive Notes upon surrender of the temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer,
28
exchange or payment. The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
canceled Notes will be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase on a pro rata basis unless otherwise required by law or applicable
stock exchange requirements.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $2,000 or
whole multiples of $1,000 in excess thereof; except that if all of the Notes of
a Holder are to be
29
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 11 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion will be
issued upon cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue
on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on
the Notes.
At the Company's request, the Trustee will give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
30
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to 10:00 a.m. New York City time on the relevant redemption or
purchase price date, the Company will deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption or purchase price of and
accrued interest on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Company
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time on or prior to January 31, 2009, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of
outstanding Notes issued under this Indenture at a redemption price of par plus
the stated interest rate, or 106.750% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes originally
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and its
Subsidiaries); and
(2) the redemption occurs within 90 days of the date of the closing of
such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to January 31, 2010.
(c) Beginning January 31, 2010, the Company may, at its option, redeem all
or a part of the Notes upon not less than 30 nor more than 60 days' notice, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest on the Notes redeemed, to the applicable
redemption date, if redeemed during the twelve-month period beginning on January
31 of the years indicated below:
31
Year Percentage
---- ----------
2010......................................................... 103.3750%
2011......................................................... 101.6875%
2012 and thereafter.......................................... 100.0000%
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is required
to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"),
it shall follow the procedures specified below and in Section 4.11 hereof.
The Asset Sale Offer shall be made to all Holders and, at the Company's
option, all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets. The Asset
Sale Offer shall remain open for a period of at least 20 Business Days following
its commencement and not more than 30 Business Days, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall apply all Excess Proceeds (the "Offer Amount") to the
purchase of Notes and such other pari passu Indebtedness (on a pro rata basis,
if applicable) or, if less than the Offer Amount has been tendered, all Notes
and other Indebtedness tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall
state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.11 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
32
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
(8) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
Company will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, will be purchased);
and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company, shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if any,
and interest on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest will be considered paid on the date due
if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. If the Company or Subsidiary
is acting as Paying Agent, the Company shall, prior to 10:00 a.m.
33
New York City time on the due date, segregate and hold in trust U.S. Legal
Tender sufficient to make payments of principal, premium and interest due on
such date
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful. Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee, being U.S.
Bank National Association, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company fails to maintain any such required office or
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within 5 days of
the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial and other information that
would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on
the annual financial statements by the Company's certified independent
accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
In addition, whether or not required by the SEC, the Company will file a
copy of all of the information and reports referred to in clauses (1) and (2)
above with the SEC for public availability within
34
the time periods specified in the SEC's rules and regulations (unless the SEC
will not accept such a filing) and make such information available to
prospective investors upon request. The Company will at all times comply with
TIA Section 314(a).
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and the Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(b) The Trustee shall not be under a duty to review or evaluate any report
or information delivered to the Trustee pursuant to the provisions of this
Section 4.03 for the purposes of making such reports available to it and to the
Holders of Notes who may request such information. Delivery of such reports,
information and documents to the Trustee as may be required under this Section
4.03 is for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(c) For so long as any Notes remain outstanding, the Company and the
Guarantors will furnish to the Holders and to prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act, if any such information is required to be delivered.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to his or her knowledge after due inquiry the
Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default has occurred, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to his or
her knowledge after due inquiry no event has occurred and remains in existence
by reason of which payments on account of the principal of or interest, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that a Default or Event of
Default under this Indenture has occurred insofar as they relate to accounting
matters or the Company has violated any provisions of Article 4 or Article 5
hereof or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that
35
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay, prior
to delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (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, by resort to any such law, 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 has been enacted.
Section 4.07 Changes in Covenants when Notes Rated Investment Grade
If on any date following the date of this Indenture:
(1) the Notes are rated Baa3 or better by ▇▇▇▇▇'▇ or BBB- or better by
S&P (or, if either such entity ceases to rate the Notes for reasons outside
of the control of the Company, the equivalent investment grade credit
rating from any other "nationally recognized statistical rating
organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the
Exchange Act selected by the Company as a replacement agency); and
(2) no Default or Event of Default shall have occurred and be
continuing,
then, beginning on that day and continuing at all times thereafter regardless of
any subsequent changes in the rating of the Notes, the covenants specifically
described under the following captions in this Indenture (the "Fall Away
Covenants") will no longer be applicable to the Notes:
(1) "Section 4.08;"
(2) "Section 4.09;"
(3) "Section 4.10;"
(4) "Section 4.11;"
(5) "Section 4.12;"
36
(6) clauses (1)(a) and (3) of Section 4.17 hereof;
(7) "Section 4.20;" and
(8) clause (4) of Section 5.01 hereof.
Section 4.08 Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any Restricted Subsidiary's
Equity Interests (including, without limitation, any payment in connection
with any merger or consolidation involving the Company or any Restricted
Subsidiary) or to the direct or indirect holders of the Company's or any
Restricted Subsidiary's Equity Interests in their capacity as such (other
than dividends or distributions (i) payable in Equity Interests (other than
Disqualified Stock) of the Company or (ii) payable to the Company and/or a
Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
expressly subordinated to the Notes or the Subsidiary Guarantees, except a
payment of interest or principal at the Stated Maturity thereof or a
payment of principal or interest on Indebtedness owed to the Company or any
of its Restricted Subsidiaries; or
(4) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.10(a) hereof;
and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after May 3, 2002 (excluding Restricted Payments permitted by
clauses (2), (3), (4), (5), (7), (8) and (9) of clause (b) of this Section
4.08), is less than the sum, without duplication of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after May 3, 2002 to the end of the
Company's most recently ended fiscal
37
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit); plus
(B) 100% of the aggregate net cash proceeds received by the
Company (including the fair market value of any Permitted Business or
assets used or useful in a Permitted Business to the extent acquired
in consideration of Equity Interests of the Company (other than
Disqualified Stock)) since May 3, 2002 as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company); plus
(C) to the extent that any Restricted Investment (other than a
Restricted Investment permitted by clause (b)(5) of this Section 4.08)
that was made after May 3, 2002 is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment; plus
(D) to the extent that any Unrestricted Subsidiary of the Company
is redesignated as a Restricted Subsidiary after May 3, 2002, the
lesser of (i) the fair market value of the Company's Investment in
such Subsidiary as of the date of such redesignation or (ii) such fair
market value as of the date on which such Subsidiary was originally
designated as an Unrestricted Subsidiary; plus
(E) $25.0 million.
(b) So long as no Default has occurred and is continuing or would be caused
thereby, the provisions of Section 4.08(a) hereof shall not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any
Guarantor or of any Equity Interests of the Company in exchange for, or out
of the net cash proceeds of the substantially concurrent sale (other than
to a Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (3)(B) of the
preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its Equity Interests on a pro rata basis;
38
(5) (a) the purchase, redemption or other acquisition, cancellation or
retirement for value of Capital Stock, or options, warrants, equity
appreciation rights or other rights to purchase or acquire Capital Stock of
the Company or any Restricted Subsidiary of the Company or any parent of
the Company held by any existing or former employees of the Company or any
Subsidiary of the Company or their assigns, estates or heirs, in each case
in connection with the repurchase provisions under employee stock option or
stock purchase agreements or other agreements to compensate management
employees; provided that such redemptions or repurchases pursuant to this
clause will not exceed $2.5 million in the aggregate during any calendar
year and $10.0 million in the aggregate for all such redemptions and
repurchases; provided further, that the Company may carry-forward and make
in a subsequent calendar year, in addition to the amounts permitted for
such calendar year, the amount of such redemptions or repurchases permitted
to have been made but not made in any preceding calendar year; provided
further that such amount in any calendar year may be increased by an amount
not to exceed (i) the cash proceeds from the sale of Capital Stock of the
Company to existing or former employees of the Company or any Subsidiary of
the Company after the date the Notes are originally issued (to the extent
the cash proceeds from the sale of such Capital Stock have not otherwise
been applied to the payment of Restricted Payments by virtue of clause
(3)(B) of the preceding paragraph) plus (ii) the cash proceeds of key man
life insurance policies received by the Company and its Subsidiaries after
the date the Notes are originally issued less (iii) the amount of any
Restricted Payments previously made pursuant to clause (i) and (ii) of this
clause (5)(a); and (b) loans or advances to employees or directors of the
Company or any Subsidiary of the Company the proceeds of which are used to
purchase Capital Stock of the Company, in an aggregate amount not in excess
of $10.0 million at any one time outstanding;
(6) prior to the date of this Indenture, the declaration and payment
by the Company of a dividend consisting of Qualified Trust Preferred Stock
with a fair market value that is not greater than is necessary in order to
preserve the Company's eligibility to elect Real Estate Investment Trust
status with respect to its 1999 taxable year;
(7) prior to the date of this Indenture, the repurchase, redemption or
other acquisition or retirement for value of up to $130.0 million in
liquidation preference of the Series B Preferred Stock if the Company
would, at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.10
hereof;
(8) repurchases of Equity Interests of the Company deemed to occur
upon the exercise of stock options if such Equity Interests represent a
portion of the exercise price thereof;
(9) prior to the date of this Indenture, the declaration and payment
of dividends on the Company's Series A Preferred Stock and Series B
Preferred Stock in accordance with terms of the Series A Preferred Stock
and Series B Preferred Stock as in effect on May 7, 2003;
(10) prior to the date of this Indenture, the payment of the
liquidation preference of and all accrued and unpaid interest on 100% of
issued and outstanding shares of the Company's Series A Preferred Stock in
accordance with the terms of the Series A Preferred Stock as in effect on
the Issue Date and the notice of redemption to be given by the Company on
May 7, 2003;
(11) prior to the date of this Indenture, the redemption pursuant to
their terms of all PMI Notes that remain outstanding on the applicable
redemption date after the Company sends
39
notice of such redemption to the holders of such notes, provided that (i)
the Company converts all PMI Notes pursuant to their terms upon the proper
request of a holder of such notes and (ii) the fair market value of the
common stock received upon such conversion (measured as of the date the
notice of redemption is given) is not less than one and one half times the
proceeds such holder would receive pursuant to such redemption;
(12) prior to the date of this Indenture, the repurchase, redemption
or other acquisition or retirement for value of the shares of Series A
Preferred Stock issued and outstanding on May 7, 2003 with the net proceeds
from the issuance by a Qualified Trust of Qualified Trust Preferred Stock;
and
(13) Restricted Payments not otherwise permitted in an amount not to
exceed $40.0 million.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. The fair market value of any
assets or securities that are required to be valued by this Section 4.08 shall
be determined by the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee. The Board of Directors' determination must be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the fair market value exceeds
$15.0 million. Except with respect to any Restricted Payment permitted pursuant
to clauses (1)-(13) of this Section 4.08(b), not later than 10 days following
the end of the fiscal quarter in which such Restricted Payment was made, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.08 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.
Section 4.09 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to the Company or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.
(b) However, the restrictions in Section 4.09(a) hereof shall not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and the Old Credit
Agreement as in effect on the Issue Date and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of those agreements, including, without limitation, the New
Credit Agreement; provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are not
40
materially more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in those
agreements on the Issue Date;
(2) this Indenture, the Notes and the related Subsidiary Guarantees;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired; provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(5) customary non-assignment provisions of any contract entered into
in the ordinary course of business and customary provisions restricting
subletting of any interest in real property contained in any lease or
easement agreement of the Company or any Restricted Subsidiary, or any
customary restriction on the ability of a Restricted Subsidiary to
dividend, distribute or otherwise transfer any asset which secures
Indebtedness secured by a Lien and which Indebtedness and which Lien was
permitted by this Indenture;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of the nature
described in clause (3) of Section 4.09(a) hereof;
(7) any agreement for the sale or other disposition of all or
substantially all of the assets or Capital Stock of a Restricted Subsidiary
that restricts distributions by that Restricted Subsidiary pending its sale
or other disposition of all or substantially all of the assets or Capital
Stock of such Restricted Subsidiary;
(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness with respect to dividends and other payments are not
materially more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced;
(9) Liens securing Indebtedness otherwise permitted to be incurred
under Section 4.13 hereof that limit the right of the debtor to dispose of
the assets subject to such Liens
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
and
(12) any encumbrance or restriction pursuant to customary provisions
restricting dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any Restricted Subsidiary.
41
Section 4.10 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company or its Restricted Subsidiaries may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and
the Guarantors may incur Indebtedness or issue preferred stock, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
preferred stock or Disqualified Stock had been issued, as the case may be, at
the beginning of such four-quarter period.
(b) The provisions of Section 4.10(a) hereof shall not prohibit the
incurrence of any of the following items of Indebtedness or the issuance of
Disqualified Stock, as set forth below (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Restricted Subsidiaries of
Indebtedness under Credit Facilities in an aggregate principal amount at
any one time outstanding under this clause (1) not to exceed $715.0
million;
(2) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of the
Indebtedness represented by the Notes and the related Subsidiary Guarantees
to be issued on the date of this Indenture;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed the greater of $25.0 million or 5% of
Consolidated Tangible Assets at any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) or Disqualified Stock that was
permitted by this Indenture to be incurred under Section 4.10(a) hereof or
clauses (2), (3), (4), (5) or (13) of this Section 4.10(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries or the refinancing or replacement of
existing intercompany Indebtedness between or among the Company and any of
its Restricted Subsidiaries; provided, however, that: (a) if the Company or
any Guarantor is the obligor on such Indebtedness, such Indebtedness must
be
42
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of the Company, or the
Subsidiary Guarantee, in the case of a Guarantor; and (b) (i) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary of the Company and (ii) any sale or other transfer of
any such Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary of the Company, shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by this
clause (6);
(7) Hedging Obligations that are entered into by the Company or a
Restricted Subsidiary for the purpose of fixing, hedging or swapping
interest rate risk in the ordinary course of the Company's financial
management (but in any event excluding Hedging Obligations entered into for
speculative purposes);
(8) the guarantee by the Company or any of its Restricted Subsidiaries
of Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.10;
(9) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock shall not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this Section 4.10;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued interest;
(10) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness, including Indebtedness represented by letters
of credit for the account of the Company or any Restricted Subsidiary,
incurred in respect of workers' compensation claims, self-insurance
obligations, performance, proposal, completion, surety and similar bonds
and completion guarantees provided by the Company or any of its Restricted
Subsidiaries in the ordinary course of business; provided, that the
underlying obligation to perform is that of the Company and its Restricted
Subsidiaries and not that of the Company's Unrestricted Subsidiaries;
provided further, that such underlying obligation is not in respect of
borrowed money;
(11) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided, that such Indebtedness is extinguished within
five business days of incurrence;
(12) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness, including but not limited to Indebtedness
represented by letters of credit for the account of the Company or any
Restricted Subsidiary, arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Equity Interests
of the Company or a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Equity Interests for the purpose of financing such
acquisition; and
(13) the incurrence by the Company or any Subsidiary of additional
Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding,
43
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(13), not to exceed $75.0 million.
The Company shall not incur any Indebtedness (including Permitted Debt)
that is contractually subordinated in right of payment to any other Indebtedness
of the Company unless such Indebtedness is also contractually subordinated in
right of payment to the Notes on substantially identical terms; provided,
however, that no Indebtedness shall be deemed to be contractually subordinated
in right of payment to any other Indebtedness solely by virtue of being
unsecured.
For purposes of determining compliance with the provisions in this
Indenture relating to this Section 4.10, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (13) above, or is entitled to be incurred
pursuant to Section 4.10(a) hereof, the Company shall be permitted to classify
such item of Indebtedness on the date of its incurrence, or later reclassify all
or a portion of such item of Indebtedness, in any manner that complies with this
Section 4.10. Indebtedness under the Old Credit Agreement outstanding on the
date of this Indenture will be deemed to have been incurred on such date in
reliance on the exception provided by clause (1) of the definition of Permitted
Debt.
Section 4.11 Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to (a)
the fair market value of the assets (other than Designated Assets) or
Equity Interests issued or sold or otherwise disposed of and (b) the
Designated Asset Value of the Designated Assets sold or otherwise disposed
of;
(2) the fair market value or Designated Asset Value, as applicable, is
determined by the Company's Board of Directors and evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this clause (3) only, each of the following
will be deemed to be cash:
(A) any liabilities, as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet, of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any
Subsidiary Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are converted within 90 days of the applicable Assets Sale by the
Company or such Restricted Subsidiary into cash or Cash Equivalents,
to the extent of the cash or Cash Equivalents received in that
conversion;
(C) 100% of the securities, notes or other obligations or
Indebtedness actually received by the Company as consideration for the
sale or other disposition of a Designated Asset pursuant to the terms
of a Designated Asset Contract, but only to the
44
extent that such securities, notes or other obligations or
Indebtedness were explicitly required to be included, or permitted to
be included solely at the option of the purchaser, in such
consideration pursuant to the terms of the applicable Designated Asset
Contract;
(D) 100% of the Indebtedness actually received by the Company as
consideration for the sale or other disposition of an Unoccupied
Facility; and
(E) any Designated Non-Cash Consideration received by the Company
or any such Restricted Subsidiary in the Asset Sale.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may engage in Asset Swaps; provided that, (1) immediately after giving effect to
such Asset Swap, the Company would be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.10(a) hereof and (2) the Board of Directors of the Company
determines that the fair market value of the assets received by the Company in
the Asset Swap is not less than the fair market value of the assets disposed of
by the Company in such Asset Swap and such determination is evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply those Net Proceeds:
(1) to repay Indebtedness under a Credit Facility;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to make a capital expenditure (provided, that the completion of
(i) construction of new facilities, (ii) expansions to existing facilities,
and (iii) repair or reconstruction of damaged or destroyed facilities which
commences within 360 days after the receipt of any Net Proceeds from an
Asset Sale by the Company may extend for an additional 360 day period if
the Net Proceeds to be used for such construction, expansion or repair are
committed to and set aside specifically for such activity within 360 days
of their receipt); or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any Net Proceeds, the Company may invest
the Net Proceeds in any manner that is not prohibited by this Indenture. For
avoidance of doubt, prior to being required to permanently reduce revolving
credit facility commitments, the Company shall have the option of making an
Asset Sale Offer in accordance with the terms of this Indenture
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall constitute "Excess Proceeds." Within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
$15.0 million, the Company shall make an Asset Sale Offer to all Holders of
Notes and, at the Company's option, all holders of other Indebtedness that is
pari passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of Notes and such other
pari passu Indebtedness that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer shall be equal to 100% of principal amount
plus accrued and unpaid interest to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
other pari passu
45
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Company shall comply with the requirements of Section 3.09 herein and
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
Asset Sale provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.11 by
virtue of such conflict.
Section 4.12 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.12 and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $20.0 million, an opinion as to the fairness to the Company
of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national
standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 4.12(a)
hereof:
(1) any employment or indemnity agreement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such
Person;
(4) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of the Company;
46
(5) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(6) Permitted Investment and Restricted Payments that are permitted by
Section 4.08 hereof; and
(7) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of employment
arrangements, stock options and stock ownership plans and other reasonable
fees, compensation, benefits and indemnities paid or entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business to or with officers, directors or employees of the Company and its
Restricted Subsidiaries;
Section 4.13 Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
Section 4.14 Business Activities.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Restricted Subsidiaries taken as a
whole.
Section 4.15 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not
be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
Section 4.16 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that
Holder's Notes at a purchase price in cash equal to 101% of the aggregate
principal amount of the Notes repurchased plus accrued and unpaid interest, if
any, on the Notes repurchased to the date of purchase (the "Change of Control
Payment"). Within ten Business
47
Days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.16 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $2,000 in
principal amount or an integral multiple of $1,000 in excess thereof.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09, 4.11 or 4.16 hereof, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under Sections 3.09, 4.11 or this Section 4.16 by
virtue of such conflict.
(b) On the Change of Control Payment Date, the Company shall, to the extent
lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
48
(3) deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
The Paying Agent shall promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note shall be in a
principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
The Company shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control shall be applicable whether or not
any other provisions of this Indenture are applicable.
(c) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes properly tendered and not withdrawn under the
Change of Control Offer.
Section 4.17 Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that
the Company or any Guarantor may enter into a Sale and Leaseback Transaction if:
(1) the Company or that Guarantor, as applicable, could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such Sale and Leaseback Transaction under the Fixed Charge Coverage
Ratio test in Section 4.10(a) hereof and (b) incurred a Lien to secure such
Indebtedness pursuant to Section 4.13 hereof;
(2) the gross cash proceeds of that Sale and Leaseback Transaction are
at least equal to the fair market value, as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to
the Trustee, of the property that is the subject of that Sale and Leaseback
Transaction; and
(3) the transfer of assets in that Sale and Leaseback Transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.11 hereof.
Section 4.18 Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
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Section 4.19 Additional Subsidiary Guarantees.
If any Subsidiary of the Company that is not a Guarantor enters into a
Guarantee of a Credit Facility or any part of the Indebtedness created under
Credit Facilities permitted to be incurred pursuant to clause (1) of Section
4.10(b) hereof, then that Subsidiary shall become a Guarantor and shall execute
a supplemental indenture and deliver an Opinion of Counsel satisfactory to the
Trustee within 10 Business Days of the date on which it was acquired or created.
The form of such Subsidiary Guarantee is attached as Exhibit B hereto.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default or Event
of Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated shall be deemed to be Investments made as of the time of the
designation, subject to the limitations on Restricted Payments. That designation
shall only be permitted if the Investment would be permitted at that time and if
the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company shall not, in a single transaction or 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 Restricted Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in an assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its Restricted
Subsidiaries taken as a whole to any other Person or group of affiliated
Persons, unless at the time and after giving effect thereto:
(1) either: (a) the Company or any Restricted Subsidiary is the
surviving corporation; or (b) the Person formed by or surviving any such
consolidation or merger (if other than the Company or any Restricted
Subsidiary) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is a corporation organized or existing
under the laws of the United States, any state of the United States or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company or any Restricted Subsidiary) or the Person to
which such sale, assignment, transfer, conveyance or other disposition has
been made assumes all the obligations of the Company under the Notes and
this Indenture pursuant to agreements reasonably satisfactory to the
Trustee;
(3) immediately after such transaction, no Default or Event of Default
exists; and
(4) the Company, the Restricted Subsidiary, or the other Person formed
by or surviving any such consolidation or merger (if other than the Company
or a Restricted
50
Subsidiary), or to which such sale, assignment, transfer, conveyance or
other disposition has been made will, on the date of such transaction after
giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter
period, (i) be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.10 hereof, or (ii) have a Fixed Charge Coverage
Ratio that exceeds the Company's Fixed Charge Coverage Ratio immediately
prior to such transaction and any related financing transactions.
The covenant described under this Section 5.01 shall not apply to: (i) a
sale, assignment, transfer, conveyance or other disposition of assets between or
among the Company and any of its Restricted Subsidiaries; (ii) any merger of a
Restricted Subsidiary into the Company or another Restricted Subsidiary; (iii)
any merger of the Company into a wholly-owned Restricted Subsidiary created for
the purpose of holding the Equity Interests of the Company; or (iv) a merger
between the Company and a newly-created Affiliate incorporated solely for the
purpose of reincorporating the Company in another state of the United States.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when due of
interest on the Notes;
(2) the Company defaults in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on the
Notes;
(3) the Company or any of its Restricted Subsidiaries fails to comply
with the provisions of Sections 4.11, 4.16 or 5.01 hereof;
(4) the Company or any Guarantor fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture or
the Notes for 60 consecutive days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class;
51
(5) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the Issue Date, if that default:
(A) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $25.0 million or more;
(6) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $25.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially
all of the property of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
52
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(9) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Subsidiary Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (7) or (8) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes will become due
and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (7) or (8) of Section 6.01 hereof occurs with respect to the Company, any
Restricted Subsidiary that is a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary,
all outstanding Notes shall be due and payable immediately without further
action or notice. The Holders of a majority in aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of all of
the Holders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment
53
default that resulted from such acceleration. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability. The Trustee shall be entitled to take any other action
deemed proper by the Trustee which is not inconsistent with such direction or
this Indenture.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a written
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be
54
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in
55
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee will examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee will 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 will not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
56
(f) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by an
Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default or
Event of Default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes governed by this Indenture.
(h) The rights, privileges, immunities and benefits given to the Trustee
hereunder, including without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed by the Trustee
consistent with the terms of this Indenture to act hereunder.
(i) Any permissive right or authority granted to the Trustee shall not be
construed as a mandatory duty.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
Trustee or
57
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also will comply
with TIA Section 313(b)(2). The Trustee will also transmit by mail all reports
as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder as the
Company and Trustee shall from time to time agree in writing. The Trustee's
compensation will not be limited by any law on compensation of a trustee of an
express trust. The Company will reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses will include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
(b) The Company and the Guarantors shall indemnify the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other Person) or liability in
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connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith or willful misconduct. The Trustee
will notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company will not relieve the Company or
any of the Guarantors of their obligations hereunder. The Company or such
Guarantor will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Company will pay the reasonable
fees and expenses of such counsel. Neither the Company nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this Section
7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal
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amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
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Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in clauses (1) and (2) below,
and to have satisfied all their other obligations under such Notes, the
Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium, if any, on such Notes
when such payments are due from the trust referred to in Section 8.04
hereof;
(2) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from each of their obligations under the covenants contained in
Sections 4.05, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18, 4.19
and 4.20 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, the Company and the Guarantors may omit to comply with
and will have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply will not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set
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forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) and Section
6.01(9) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company
has delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that:
(A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
(B) since the Issue Date, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the Company
must deliver to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in 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 shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the
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other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for or relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) will be discharged from
such trust; and the Holder of such Note will thereafter be permitted to 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, will thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which will not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of
63
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's and
the Guarantor's obligations under this Indenture and the Notes and the
Subsidiary Guarantees will be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company will be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture, the Subsidiary
Guarantees or the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(3) to provide for the assumption of the Company's obligations to the
Holders of the Notes by a successor to the Company pursuant to Article 5 or
Article 10 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture, the Subsidiary Guarantees
or the Notes to any provision contained in the "Description of Notes"
contained in the Prospectus Supplement to the extent that such provision in
the "Description of Notes" was intended to be a verbatim recitation of a
provision of this Indenture, the Subsidiary Guarantees or the Notes;
(7) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture; or
(8) to allow any Guarantor to execute a supplemental indenture and/or
a Subsidiary Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be
64
therein contained, but the Trustee will not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including, without limitation, Sections
3.09, 4.11 and 4.16 hereof), the Subsidiary Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including, without limitation, Additional Notes, if any) then outstanding
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, for the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Subsidiary Guarantees or the Notes may
be waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes except as provided above with respect to Sections 3.09, 4.11 and
4.16 hereof;
(3) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
65
(4) waive a Default or Event of Default in the payment of principal
of, or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any Note payable in currency other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium, if any, on the Notes;
(7) waive a redemption payment with respect to any Notes (other than a
payment required by Sections 3.09, 4.11 and 4.16 hereof);
(8) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms
of this Indenture; or
(9) make any change in the foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. If the Company so
determines, the Company in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the
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documents required by Section 12.04 hereof, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture is authorized or permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01. Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium, if any, and interest on the Notes will
be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
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obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) will forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors will have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute (i) a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to
the extent applicable to any Subsidiary Guarantee or (ii) an unlawful
distribution under any applicable state law prohibiting shareholder
distributions by an insolvent subsidiary to the extent applicable to its
Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor under its Subsidiary Guarantee and this Article 10 shall be limited to
the maximum amount as will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 10, result
in the obligations of such Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance or such an unlawful shareholder
distribution.
Section 10.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit B hereto will be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Subsidiary after the
date of this Indenture, if required by Section 4.19 hereof, the Company will
cause such Subsidiary to comply with the provisions of Section 4.19 hereof and
this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
68
(1) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(2) either:
(a) subject to Section 10.05 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all the
obligations of that Guarantor, pursuant to a supplemental indenture in form
and substance reasonably satisfactory to the Trustee, under the Notes, this
Indenture and the Subsidiary Guarantee on the terms set forth herein or
therein; and
(b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation, Section 4.11 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(a) and (b) above, nothing contained in this Indenture or in any of the Notes
will prevent any consolidation or merger of a Guarantor with or into the Company
or another Guarantor, or will prevent any sale or conveyance of the property of
a Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
Section 10.05 Releases Following Sale of Assets.
Any Guarantor will be released from and relieved of any obligations under
its Subsidiary Guarantee, (i) in the event of any sale or other disposition of
all or substantially all of the assets of that Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all to the Capital
Stock of that Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Restricted Subsidiary of the
Company, (ii) if the Company properly designates that Guarantor as an
Unrestricted Subsidiary in accordance with this Indenture or (iii) if that
Guarantor is released from its guarantee under all Credit Facilities, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture, including without
limitation Section 4.11 hereof. Upon delivery by the Company to the Trustee of
an Officers' Certificate and an Opinion of Counsel to the effect that such sale
or other disposition was made by the Company in accordance with the provisions
of this Indenture, including without limitation Section 4.11 hereof, the Trustee
will execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Subsidiary Guarantee.
69
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter repaid
to the Company) have been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable within one
year and the Company or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge
the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the
date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company or any Guarantor
is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the provisions of Section 11.02 and Section 8.06 will survive. In
addition, nothing in this Section 11.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
70
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes 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, premium, if any, and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and any Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01; provided that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed or assessed against the Trustee with respect to the money
deposited with the Trustee pursuant to Section 11.01 hereof.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or any Guarantor:
Corrections Corporation of America
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
With a copy to:
71
Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC
AmSouth Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
If to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a
copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
72
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
In giving an Opinion of Counsel, counsel may rely as to factual matters on
an Officers' Certificate or certificates of public officials.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 12.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
73
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10 Successors.
All agreements of the Company in this Indenture and the Notes will bind its
successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 10.05.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same agreement.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and will in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
74
SIGNATURES
Dated as of January 23, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
GUARANTORS:
CCA OF TENNESSEE, LLC
PRISON REALTY MANAGEMENT, INC.
TECHNICAL AND BUSINESS INSTITUTE OF
AMERICA, INC.
CCA INTERNATIONAL, INC.
CCA PROPERTIES OF AMERICA, LLC
CCA PROPERTIES OF ARIZONA, LLC
CCA PROPERTIES OF TENNESSEE, LLC
CCA WESTERN PROPERTIES, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
CCA PROPERTIES OF TEXAS, L.P.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer,
CCA Properties of America, LLC,
as General Partner
TRANSCOR AMERICA, LLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Treasurer
each as a Guarantor
TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jr.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jr.
Title: Officer
EXHIBIT A
Face of Note
CUSIP
6.75% Senior Notes due 2014
No.1 $
CORRECTIONS CORPORATION OF AMERICA
promises to pay to CEDE & CO., or registered assigns, the principal sum of
_________________ on January 31, 2014.
Interest Payment Dates: January 31 and July 31
Record Dates: January 15 and July 15
Dated: January 23, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------
Authorized Signatory
A-1
Back of Note
[Insert Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
6.75% Senior Notes due 2014
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Corrections Corporation of America, a Maryland
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 6.75% per annum from January 23, 2006 until maturity. The Company
will pay interest semi-annually in arrears on January 31 and July 31 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each, an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be July 31, 2006.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the 15th of January or the 15th of July next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, if any, and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available
funds will be required with respect to principal of, interest and premium, if
any, on, all Global Notes and all other Notes the Holders of which will have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(4) INDENTURE. The Company issued the Notes under a Base Indenture
dated as of January 23, 2006, among the Company, the Guarantors and the Trustee,
as amended and supplemented by the First Supplemental Indenture dated as of
January 23, 2006 (the "Indenture"). The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent
A-2
any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall govern and be controlling. The
Notes are unsecured obligations of the Company.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to January 31, 2010.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest, if any, thereon to the applicable redemption date,
if redeemed during the twelve-month period beginning on March 1 of the years
indicated below:
Year Percentage
---- ----------
2010......................................................... 103.3750%
2011......................................................... 101.6875%
2012 and thereafter.......................................... 100.0000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time on or prior to January 31, 2009, the Company may on any one or more
occasions redeem Notes with the net cash proceeds of one or more Equity
Offerings at a redemption price of par plus the stated interest rate, or
106.750% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date; provided that at least 65% in
aggregate principal amount of the Notes originally issued under the Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries) and that such
redemption occurs within 90 days of the date of the closing of such Equity
Offering.
(6) MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$2,000 or an integral multiple of $1,000 in excess thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the "Change of Control Payment"). Within 10 business days following
any Change of Control, the Company will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within five
days of each date on which the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company will commence an offer to all Holders of Notes and, at the
Company's option, all holders of other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets (an
"Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes (including any Additional Notes) and other
pari passu Indebtedness that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes
A-3
(including any Additional Notes) and other pari passu Indebtedness tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or such Subsidiary) may use such deficiency for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $2,000 and integral multiples of $1,000
in excess thereof. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
and Additional Notes, if any, voting as a single class. Without the consent of
any Holder of a Note, the Indenture, the Subsidiary Guarantees or the Notes may
be amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, to conform the text of the Indenture, the Subsidiary Guarantees
or the Notes to any provision contained in the "Description of Notes" in the
Prospectus Supplement to the extent that such provision in the "Description of
Notes" was intended to be a verbatim recitation of a provision of the Indenture,
the Subsidiary Guarantees or the Notes, to provide for the Issuance of
Additional Notes in accordance with the limitations set forth in the Indenture,
or to allow any Guarantor to execute a supplemental indenture to the Indenture
and/or a Subsidiary Guarantee with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on the Notes; (ii) default in
payment when due of principal of or
A-4
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, (iii) failure by the Company to comply with Sections 4.11, 4.16 or
5.01 of the Indenture; (iv) failure by the Company for 60 consecutive days after
notice to the Company by the Trustee or the Holders of at least 25% in principal
amount of the Notes then outstanding voting as a single class to comply with any
other agreement in the Indenture; (v) default under certain other agreements
relating to Indebtedness of the Company which default (A) is caused by a Payment
Default or (B) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $25.0 million or more; (vi) certain final judgments
for the payment of money that remain undischarged for a period of 60 days; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries that are Significant Subsidiaries; and (ix) except
as permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Guarantor's Subsidiary
Guarantee. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a written statement regarding compliance with the Indenture,
and the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a written statement specifying such Default
or Event of Default.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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(17) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Corrections Corporation of America
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
---------------
Your Signature:
------------------------
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee*:
---------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.11 or 4.16 of the Indenture, check the appropriate box below:
[ ] Section 4.11 [ ] Section 4.16
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, state the principal
amount you elect to have purchased:
$
---------------------------------------
Date:
-------------------------------
Your Signature:
------------------------
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:
----------------
Signature Guarantee*:
------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- ------------------- ------------------
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EXHIBIT B
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Base Indenture, as amended and
supplemented by the First Supplemental Indenture dated as of January 23, 2006
(the "Indenture"), by and among Corrections Corporation of America, (the
"Company"), the Guarantors (as defined therein) and U.S. Bank National
Association, as trustee (the "Trustee"), (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
GUARANTOR(S)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
[________________, 200__, among __________________] (the "Guaranteeing
Subsidiary"), a subsidiary of Corrections Corporation of America (or its
permitted successor), a Maryland corporation (the "Company"), the Company, the
other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank
National Association, as trustee under the indenture referred to below (the
"Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee a
base indenture dated as of January 23, 2006, as amended and supplemented by a
first supplemental indenture dated as of January 23, 2006 (the "Indenture")
providing for the issuance of the Company's 106.75% Senior Notes due 2014 (the
"Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, and premium, if any, and interest on the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and
(ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.
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(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the
Notes or the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
(c) The following is hereby waived: diligence, presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture, and the Guaranteeing Subsidiary accepts all obligations of
a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any custodian,
trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Subsidiary
Guarantee.
(h) The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving
effect to any maximum amount and all other contingent and fixed
liabilities that are relevant under any applicable (A) Bankruptcy or
fraudulent conveyance laws or (B) any applicable state laws
prohibiting shareholder distributions by an insolvent subsidiary to
the extent applicable, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such
other Guarantor under Article 10 of the Indenture, this new Subsidiary
Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guarantor under this Subsidiary Guarantee will
not constitute a fraudulent transfer or conveyance or an unlawful
shareholder distribution.
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3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not sell or otherwise dispose
of all substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor
unless:
(i) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(ii) either (A) subject to Sections 10.04 and 10.05 of the
Indenture, the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger unconditionally assumes all the obligations of
that Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture and the Subsidiary Guarantee on the terms set forth herein
or therein; or (B) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of the
Indenture, including without limitation, Section 4.11 thereof.
(b) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in
form to the Trustee, of the Subsidiary Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and
conditions of the Indenture to be performed by the Guarantor, such
successor Person shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of
the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable under the Indenture which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same legal rank
and benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Subsidiary Guarantees had been issued
at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 10.05 of
Article 10 of the Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
5. RELEASES.
(a) Any Guarantor will be released and relived of any obligations
under its Subsidiary Guarantee, (i) in the event of any sale or other
disposition of all or substantially all of the assets of that
Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of that Guarantor, in
each case to a Person that is not (either before or after giving
effect to such transaction) a
C-3
Restricted Subsidiary of the Company, (ii) if the Company properly
designates that Guarantor as an Unrestricted Subsidiary in accordance
with this Indenture or (iii) if the Guarantor is released from its
guarantees under all Credit Facilities, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation
or otherwise, of all of the capital stock of such Guarantor) or the
corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or
other disposition are applied in accordance with the applicable
provisions of the Indenture, including without limitation Section 4.11
of the Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance
with the provisions of the Indenture, including without limitation
Section 4.11 of the Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor
from its obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations
of any Guarantor under the Indenture as provided in Article 10 of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
GUARANTEEING SUBSIDIARY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CORRECTIONS CORPORATION OF AMERICA
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[EXISTING GUARANTORS]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:
------------------------------------
Authorized Signatory
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