EXHIBIT 4.1
INDENTURE, DATED AS OF FEBRUARY 20, 2002, AMONG AMERICAN
ACHIEVEMENT CORPORTION, THE BANK OF NEW YORK, AS TRUSTEE, AND
THE GUARANTORS
AMERICAN ACHIEVEMENT CORPORATION,
AS ISSUER
THE GUARANTORS PARTY HERETO,
AS GUARANTORS
11 5/8% SENIOR NOTES DUE 2007
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INDENTURE
DATED AS OF FEBRUARY 20, 2002
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THE BANK OF NEW YORK,
AS TRUSTEE
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)......................................................................... 7.3, 7.8, 7.10
(c)......................................................................... N.A.
311(a)......................................................................... 7.11
(b)......................................................................... 7.11
(c)......................................................................... N.A.
312(a)......................................................................... 2.5
(b)......................................................................... 13.3
(c)......................................................................... 13.3
313(a)......................................................................... 7.6
(b)(1)...................................................................... N.A.
(b)(2)...................................................................... 7.6
(c)......................................................................... 7.6, 13.2
314(a)......................................................................... 4.3, 4.4
(b)......................................................................... N.A.
(c)(1)...................................................................... 13.4
(c)(2)...................................................................... 13.4
(c)(3)...................................................................... 13.4
(d)......................................................................... N.A.
(e)......................................................................... 13.5
(f)......................................................................... N.A.
315(a)......................................................................... 7.2
(b)......................................................................... 7.5, 13.2
(c)......................................................................... 7.1
(d)......................................................................... 7.1
(e)......................................................................... 6.12
316(a)(last sentence).......................................................... 2.9
(a)(1)(A)................................................................... 6.5
(a)(1)(B)................................................................... 6.4
(a)(2)...................................................................... N.A.
(b)......................................................................... 6.7
(c)......................................................................... N.A.
317(a)(1)...................................................................... 6.8
(a)(2)...................................................................... 6.10
(b)......................................................................... 2.4
318(a)......................................................................... 13.1
(b)......................................................................... N.A.
(c)......................................................................... 13.1
N.A. MEANS NOT APPLICABLE.
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* This Cross-Reference Table shall not, for any purpose, be deemed a part of the
Indenture
TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.........................................................................1
Section 1.2. Other Definitions..................................................................24
Section 1.3. Incorporation by Reference of Trust Indenture Act..................................25
Section 1.4. Rules of Construction..............................................................25
Section 1.5. Acts of Holders....................................................................26
ARTICLE II.
THE NOTES
Section 2.1. Form and Dating....................................................................27
Section 2.2. Execution and Authentication.......................................................28
Section 2.3. Registrar and Paying Agent.........................................................29
Section 2.4. Paying Agents to Hold Money in Trust...............................................29
Section 2.5. Holder Lists.......................................................................30
Section 2.6. Transfer and Exchange..............................................................30
Section 2.7. Replacement Notes..................................................................39
Section 2.8. Outstanding Notes..................................................................39
Section 2.9. Treasury Notes.....................................................................39
Section 2.10. Temporary Notes....................................................................40
Section 2.11. Cancellation.......................................................................40
Section 2.12. Defaulted Interest.................................................................40
Section 2.13. Persons Deemed Owners..............................................................40
Section 2.14. CUSIP Numbers......................................................................41
Section 2.15. Designation........................................................................41
ARTICLE III.
REDEMPTION AND REPURCHASE
Section 3.1. Notices to Trustee.................................................................41
Section 3.2. Selection of Notes.................................................................42
Section 3.3. Notice of Optional or Special Redemption...........................................42
Section 3.4. Effect of Notice of Redemption.....................................................43
Section 3.5. Deposit of Redemption Price or Purchase Price......................................44
Section 3.6. Notes Redeemed or Repurchased in Part..............................................44
Section 3.7. Optional Redemption................................................................44
Section 3.8. Special Redemption.................................................................44
Section 3.9. Repurchase upon Change of Control Offer............................................44
PAGE
Section 3.10. Repurchase upon Application of Excess Proceeds.....................................46
ARTICLE IV.
COVENANTS
Section 4.1. Payment of Principal and Interest..................................................48
Section 4.2. Maintenance of Office or Agency....................................................48
Section 4.3. Reports............................................................................49
Section 4.4. Compliance Certificate.............................................................50
Section 4.5. Taxes..............................................................................50
Section 4.6. Stay, Extension and Usury Laws.....................................................50
Section 4.7. Limitation on Restricted Payments..................................................51
Section 4.8. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.......54
Section 4.9. Limitation on Incurrence of Additional Indebtedness................................55
Section 4.10. Limitation on Asset Sales..........................................................56
Section 4.11. Limitations on Transactions with Affiliates........................................58
Section 4.12. Limitation on Liens................................................................60
Section 4.13. Continued Existence................................................................61
Section 4.14. Insurance Matters..................................................................61
Section 4.15. Offer to Repurchase upon Change of Control.........................................61
Section 4.16. Additional Subsidiary Guarantees...................................................62
Section 4.17. Conduct of Business................................................................62
Section 4.18. Payments for Consent...............................................................62
Section 4.19. Limitation on Preferred Stock of Restricted Subsidiaries...........................62
ARTICLE V.
SUCCESSORS
Section 5.1. Merger, Consolidation and or Sale of Assets........................................63
Section 5.2. Successor Corporation Substituted..................................................65
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. Events of Default..................................................................65
Section 6.2. Acceleration.......................................................................67
Section 6.3. Other Remedies.....................................................................68
Section 6.4. Waiver of Past Defaults............................................................68
Section 6.5. Control by Majority................................................................68
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PAGE
Section 6.6. Limitation on Suits................................................................68
Section 6.7. Rights of Holders of Notes to Receive Payment......................................69
Section 6.8. Collection Suit by Trustee.........................................................69
Section 6.9. [Intentionally Omitted]............................................................69
Section 6.10. Trustee May File Proofs of Claim...................................................69
Section 6.11. Priorities.........................................................................70
Section 6.12. Undertaking for Costs..............................................................70
ARTICLE VII.
TRUSTEE
Section 7.1. Duties of Trustee..................................................................71
Section 7.2. Rights of Trustee..................................................................72
Section 7.3. Individual Rights of Trustee.......................................................73
Section 7.4. Trustee's Disclaimer...............................................................73
Section 7.5. Notice of Defaults.................................................................73
Section 7.6. Reports by Trustee to Holder of the Notes..........................................73
Section 7.7. Compensation, Reimbursement and Indemnity..........................................74
Section 7.8. Replacement of Trustee.............................................................75
Section 7.9. Successor Trustee by Merger, Etc...................................................76
Section 7.10. Eligibility; Disqualification......................................................76
Section 7.11. Preferential Collection of Claims Against Company..................................76
ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance...........................76
Section 8.2. Legal Defeasance and Discharge.....................................................77
Section 8.3. Covenant Defeasance................................................................77
Section 8.4. Conditions to Legal or Covenant Defeasance.........................................78
Section 8.5. Deposited Money and U.S. Government Securities to Be Held in Trust; Other
Miscellaneous Provisions........................................................79
Section 8.6. Repayment to the Company...........................................................80
Section 8.7. Reinstatement......................................................................80
ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. Without Consent of Holders of Notes................................................81
Section 9.2. With Consent of Holders of Notes...................................................81
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PAGE
Section 9.3. Compliance with Trust Indenture Act................................................83
Section 9.4. Revocation and Effect of Consents..................................................83
Section 9.5. Notation on or Exchange of Notes...................................................83
Section 9.6. Trustee to Sign Amendment, Etc.....................................................84
ARTICLE X.
[INTENTIONALLY OMITTED]
ARTICLE XI.
GUARANTEE
Section 11.1. Unconditional Guarantee............................................................84
Section 11.2. Severability.......................................................................85
Section 11.3. Limitation of Guarantor's Liability................................................85
Section 11.4. Release of Guarantor...............................................................85
Section 11.5. Contribution.......................................................................86
Section 11.6. Waiver of Subrogation..............................................................86
Section 11.7. Execution of Guarantee.............................................................87
Section 11.8. Waiver of Stay, Extension or Usury Laws............................................87
ARTICLE XII.
SATISFACTION AND DISCHARGE
Section 12.1. Satisfaction and Discharge.........................................................87
Section 12.2. Application of Trust...............................................................88
ARTICLE XIII.
MISCELLANEOUS
Section 13.1. Trust Indenture Act Controls.......................................................88
Section 13.2. Notices............................................................................89
Section 13.3. Communication by Holders of Notes with Other Holders of Notes......................90
Section 13.4. Certificate and Opinion as to Conditions Precedent.................................90
Section 13.5. Statements Required in Certificate or Opinion......................................90
Section 13.6. Rules by Trustee and Agents........................................................91
Section 13.7. No Personal Liability of Directors, Officers, Employees and Stockholders...........91
Section 13.8. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial....................91
Section 13.9. No Adverse Interpretation of Other Agreements......................................92
Section 13.10. Successors.........................................................................92
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PAGE
Section 13.11. Severability.......................................................................92
Section 13.12. Counterpart Originals..............................................................92
Section 13.13. Table of Contents, Headings, Etc...................................................92
Section 13.14. Qualification of Indenture.........................................................93
EXHIBITS
Exhibit A Form of Series A Note
Exhibit B Form of Series B Note
Exhibit C Form of Guarantee
Exhibit D(1) Form of Regulation S Certification
Exhibit D(2) Form of Certificate to be Delivered upon Exchange or Registration
of Transfer of Notes
Exhibit E Form of Certificate to be Delivered in Connection with Transfers
to Non-QIB Accredited Investors
Exhibit F Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S
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INDENTURE
INDENTURE dated as of February 20, 2002 among American Achievement
Corporation, a Delaware corporation (the "COMPANY"), the Guarantors (as defined
herein) listed on Schedule A hereto, and The Bank of
New York, a
New York
banking corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders (as defined below) of the
Company's 11 5/8% Senior Notes due 2007:
I.ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
A.Section 1.1. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or assumed in connection with the acquisition
of assets from such Person and in each case not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"ADDITIONAL INTEREST" means all additional interest then owing
pursuant to Section 4 of the Registration Rights Agreement.
"ADDITIONAL NOTES" means Notes, in addition to, and having identical
terms as, the $177,000,000 aggregate principal amount of Series A Notes issued
on the Issue Date (or the Series B Notes issued in exchange for the Series A
Notes issued on the Issue Date), issued pursuant to Article II and in compliance
with Section 4.9
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET ACQUISITION" means (1) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (2) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person
(other than a
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Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprises any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of: (1) any Capital Stock of any Restricted Subsidiary of the Company;
or (2) any other property or assets of the Company or any Restricted Subsidiary
of the Company other than in the ordinary course of business; PROVIDED, HOWEVER,
that asset sales or other dispositions shall not include: (a) a transaction or
series of related transactions for which the Company or its Restricted
Subsidiaries receive aggregate consideration of less than $2,000,000; (b) the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets (determined on a consolidated basis for the Company and its
Restricted Subsidiaries) of the Company as permitted under Article V; (c) any
Restricted Payment permitted by Section 4.7 or that constitutes a Permitted
Investment; (d) sales or other dispositions of inventory, receivables or other
current assets in the ordinary course of business; (e) a Permitted Lien; and (f)
a sale or other disposition or abandonment of damaged, worn-out or obsolete
property.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors
or similar governing body of such Person or any duly authorized committee
thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BORROWING BASE" means, as of any date, an amount equal to the sum of:
(1) 85% of the aggregate book value of all accounts receivable of the
Company and its Restricted Subsidiaries; and
(2) 60% of the aggregate book value of all inventory owned by the
Company and its Restricted Subsidiaries,
all calculated on a consolidated basis and in accordance with GAAP.
To the extent that information is not available as to the amount of
accounts receivable or inventory as of a specific date, the Company shall use
the most recent available information for purposes of calculating the Borrowing
Base.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of
New York or at a place of payment
are authorized by law, regulation or executive order to remain closed. If a
payment date is not a Business Day at a place of payment, payment may be made at
that place on the next succeeding day that is a Business Day, and no interest
shall accrue for the intervening period.
"CAPITAL STOCK" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person, and all options, warrants
or other rights to purchase or acquire any of the foregoing; and
(2) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person, and all
options, warrants or other rights to purchase or acquire any of the
foregoing.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CASH EQUIVALENTS" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies ("S&P"), or ▇▇▇▇▇'▇ Investors Service, Inc.
("MOODY'S");
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not less than
$250.0 million;
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(5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (4)
above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"CBI PREFERRED STOCK" means the Series A Preferred Stock, par value
$0.01 per share, of Commemorative Brands, Inc.
"CBI SUBORDINATED NOTES" means the 11% senior subordinated notes due
January 15, 2007 of Commemorative Brands, Inc.
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer other than a Lien
permitted by this Indenture or by way of consolidation or merger (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company and its Subsidiaries, taken as a whole, to
any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a "GROUP"), together with any Affiliates thereof (whether or
not otherwise in compliance with the provisions of this Indenture) other
than to the Permitted Holders;
(2) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with the provisions of this Indenture);
(3) (a) prior to a Public Equity Offering after the Issue Date, any
Person or Group (other than the Permitted Holders and any entity formed for
the purpose of owning Capital Stock of the Company) shall become the owner,
directly or indirectly, beneficially or of record, of shares representing
more than 50% of the aggregate ordinary voting power represented by the
issued and outstanding Capital Stock of the Company or (b) following a
Public Equity Offering after the Issue Date, any Person or Group (other
than the Permitted Holders and any entity formed for the purpose of owning
Capital Stock of the Company) shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than 35%
of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Company; PROVIDED, HOWEVER, that such
event described in this clause (b) shall not be deemed to be a Change of
Control so long as the Permitted Holders own shares representing in the
aggregate a greater percentage of the total voting power of the issued and
outstanding Capital Stock of the Company than such other Person or Group;
or
(4) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the Board
of Directors of the Company at the beginning of such period, and such
replacement, or nomination for election by the Company's shareholders,
shall not have been approved by a vote of at least a majority of the Board
of Directors of the Company then still in office who either were members of
such
-5-
Board of Directors at the beginning of such period or whose election or
nomination as a member of such Board of Directors was previously so
approved.
"CLEARSTREAM" shall mean Clearstream Banking, Societe Anonyme,
Luxembourg.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means American Achievement Corporation, a Delaware
corporation, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter means such successor
Person.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced thereby:
(a) all income taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period
(other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business);
(b) Consolidated Interest Expense; and
(c) Consolidated Non-cash Charges LESS any non-cash items
increasing Consolidated Net Income for such period, all as determined
on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.
With respect to periods prior to the Issue Date, Consolidated EBITDA
shall include (without duplication) all adjustments relating to the elimination
of salary expense, non-recurring inventory charges and the reunion service
business, in each case of the type reflected in the calculation of Adjusted
EBITDA set forth in footnote 3 to "Summary Consolidated Historical and Unaudited
Pro Forma Financial Data" contained in the Final Memorandum.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "FOUR QUARTER PERIOD") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "TRANSACTION
DATE") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without
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limitation of the foregoing, for purposes of this definition, "CONSOLIDATED
EBITDA" and "CONSOLIDATED FIXED CHARGES" shall be calculated after giving effect
on a pro forma basis for the period of such calculation to:
(1) the incurrence or repayment of any Indebtedness of such Person or
any of its Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the incurrence or repayment of Indebtedness
in the ordinary course of business for working capital purposes pursuant to
working capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and
(2) any asset sales or other dispositions or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the
need to make such calculation as a result of such Person or one of its
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Exchange
Act) attributable to the assets which are the subject of the Asset
Acquisition or asset sale or other disposition during the Four Quarter
Period) occurring during the Four Quarter Period or at any time subsequent
to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such asset sale or other disposition or Asset
Acquisition (including the incurrence, assumption or liability for any such
Acquired Indebtedness) occurred on the first day of the Four Quarter
Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes
of determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
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"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the product of (x) the amount of all cash dividend payments on any
series of Preferred Stock of such Person and, to the extent permitted under
this Indenture, its Restricted Subsidiaries paid, accrued or scheduled to
be paid or accrued during such period times (y) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
effective consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication:
(1) the aggregate of the interest expense of such Person and its
Restricted Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, including without limitation: (a) any amortization
of debt discount and amortization or write-off of deferred financing costs;
(b) the net costs under Interest Swap Obligations; (c) all capitalized
interest; and (d) the interest portion of any deferred payment obligation;
and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom (without
duplication):
(1) after-tax gains or losses from Asset Sales (without regard to the
$2,000,000 limitation set forth in the definition thereof) or abandonments
or reserves relating thereto;
(2) extraordinary gains and extraordinary losses;
(3) the net income or loss of any Person acquired prior to the date it
becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person;
(4) the net income (but not loss) of any Restricted Subsidiary of the
referent Person to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is restricted by
a contract, operation of law or otherwise (other than by reason of the CBI
Preferred Stock), except to the extent of cash dividends or distributions
paid to the referent Person or to a Wholly Owned Restricted Subsidiary of
the referent Person by such Restricted Subsidiary;
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(5) the net income (but not loss) of any Person, other than a
Restricted Subsidiary of the referent Person, except to the extent of cash
dividends or distributions paid to the referent Person or to a Wholly Owned
Restricted Subsidiary of the referent Person by such Person;
(6) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated Net
Income accrued at any time following the Issue Date;
(7) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or
not such operations were classified as discontinued); and
(8) in the case of a successor to the referent Person by consolidation
or merger or as a transferee of the referent Person's assets, any earnings
of the successor corporation prior to such consolidation, merger or
transfer of assets.
"CONSOLIDATED NET WORTH" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Restricted Subsidiaries reducing Consolidated Net Income
of such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charge which
requires an accrual of or a reserve for cash charges for any future period).
"CORPORATE TRUST OFFICE OF THE TRUSTEE" means the principal office of
the Trustee at which at any time its corporate trust business shall be
administered, which office at the date hereto is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ 21 West,
New York,
New York 10286, Attention: Corporate Trust Trustee
Department, or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as such successor Trustee
may designate from time to time by notice to the Holders and the Company).
"CREDIT AGREEMENT" means the Credit Agreement dated as of February 20,
2002, among the Company, the lenders party thereto in their capacities as
lenders thereunder and The Bank of Nova Scotia, as administrative agent,
together with the documents related thereto (including, without limitation, any
instruments, guarantee agreements and pledge and/or security documents), in each
case as such agreements may be amended (including, without limitation, any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder (PROVIDED that such increase in
borrowings is permitted by Section 4.9) or adding Restricted Subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion of
the Indebtedness under such
-9-
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to the Notes issuable in whole or in
part in global form, the Person specified in Section 2.6 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions or this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event (other than an event which would
constitute a Change of Control), matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the sole option
of the holder thereof (except, in each case, upon the occurrence of a Change of
Control) on or prior to the final maturity date of the Notes, PROVIDED that any
Capital Stock that would not constitute Disqualified Capital Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the stated maturity of the Notes shall
not constitute Disqualified Capital Stock if the "asset sale" or "change of
control" provisions applicable to such Capital Stock are no more favorable to
the holders of such Capital Stock than the provisions contained in Sections 4.10
and 4.15 and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
such covenants.
"DOMESTIC RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
incorporated or otherwise organized or existing under the laws of the United
States, any state thereof or any territory or possession of the United States.
"EUROCLEAR" means ▇▇▇▇▇▇ Guaranty Trust Company of
New York, Brussels
office, as operator of the Euroclear System.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"EXCHANGE OFFER" means the offer that shall be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Notes for
Series B Notes.
-10-
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and, if such value exceeds $2.0 million, shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"FINAL MEMORANDUM" shall mean the Company's final offering memorandum
dated February 14, 2002, whereby the Company offered $177,000,000 Series A
Notes.
"FOREIGN RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the
Company other than a Domestic Restricted Subsidiary.
"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 may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.
"GUARANTEE" has the meaning set forth in Section 11.1.
"GUARANTOR" means: (i) each of the Company's Domestic Restricted
Subsidiaries as of the Issue Date; and (ii) each of the Company's Restricted
Subsidiaries that in the future executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Guarantor; PROVIDED that any Person constituting a Guarantor as described above
shall cease to constitute a Guarantor when its respective Guarantee is released
in accordance with the terms of this Indenture.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
Obligations under any title retention agreement (but excluding any such
Obligations that constitute trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue
by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted);
-11-
(5) all Obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction;
(6) guarantees and other contingent obligations in respect of
Indebtedness of other Persons of the type referred to in clauses (1)
through (5) above and clause (8) below;
(7) all Obligations of any other Person of the type referred to in
clauses (1) through (6) which are secured by any Lien on any property or
asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset and the amount of
the Obligation so secured;
(8) all Obligations under currency agreements and interest swap
agreements of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to its maximum fixed repurchase price, but excluding accrued
dividends, if any.
For purposes hereof, the "MAXIMUM FIXED REPURCHASE PRICE" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. Any Indebtedness which is incurred at a discount to the principal amount
at maturity thereof shall be deemed to have been incurred at the full principal
amount at maturity thereof.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT FINANCIAL ADVISOR" means a firm: (1) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company; and (2) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL PURCHASERS" means Deutsche Banc Alex. ▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. and Scotia Capital (USA) Inc.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
-12-
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Capital Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Restricted Subsidiary is no longer a
Restricted Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of. If the Company designates any of its Restricted Subsidiaries to be
an Unrestricted Subsidiary, the Company shall be deemed to have made an
Investment on the date of such designation equal to the Designation Amount
determined in accordance with the definition of "Unrestricted Subsidiary."
"ISSUE DATE" means February 20, 2002, the date of original issuance of
the Notes.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"MANAGEMENT AGREEMENT" means the management agreement dated as of
March 30, 2001 among the Company, the Subsidiaries of the Company listed therein
and ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., as in effect on the Issue Date.
"MATERIAL DOMESTIC RESTRICTED SUBSIDIARY" means a Domestic Restricted
Subsidiary of the Company or any Restricted Subsidiary of the Company having
total assets with a book value in excess of $500,000.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of:
(1) reasonable out-of-pocket commissions, expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) net taxes paid or payable as a result of such Asset Sale;
(3) repayment of Indebtedness that is secured by the property or
assets that are the subject of such Asset Sale;
-13-
(4) amounts required to be paid to any Person (other than the Company
or any of its Restricted Subsidiaries) owning a beneficial interest in the
assets which are subject to the Asset Sale; and
(5) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained
by the Company or any Restricted Subsidiary, as the case may be, after such
Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"NOTES" means the Series A Notes and the Series B Notes, if any, that
are issued under this Indenture, as amended or supplemented from time to time.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" means (a) with respect to any Person that is a corporation,
the Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, the Controller,
the Secretary or any Vice-President of such Person and (b) with respect to any
other Person, the individuals selected by such Person to perform functions
similar to those of the officers listed in clause (a).
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the Chief Executive
Officer, the Chief Financial Officer, the Treasurer or the principal accounting
officer of the Company, that meets the requirements of Sections 13.4 and 13.5
hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Sections
13.4 and 13.5 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"PARI PASSU INDEBTEDNESS" means any Indebtedness of the Company or any
Guarantor that ranks PARI PASSU in right of payment with the Notes or such
Guarantee, as applicable.
"PERMITTED BUSINESS" means any business that is the same, similar,
reasonably related, complementary or incidental to the business in which the
Company or any of its Restricted Subsidiaries are engaged on the Issue Date.
"PERMITTED HOLDERS" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners
II, L.P., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners III, L.P. and their respective Affiliates.
-14-
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(1) Indebtedness under the Notes and the Guarantees issued on the
Issue Date;
(2) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $50.0
million less the amount of all required permanent repayments (which are
accompanied by a corresponding permanent commitment reduction) thereunder,
plus an amount not exceeding the aggregate amount of Indebtedness that is
permitted to be incurred, but has not been incurred, under clauses (10) and
(14) of this definition;
(3) other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon; PROVIDED that the CBI Subordinated Notes held
by a Restricted Subsidiary of the Company on the Issue Date shall not be
included in this clause (3), but shall be included in clause (6) below;
(4) Interest Swap Obligations of the Company or any Restricted
Subsidiary of the Company covering Indebtedness of the Company or any of
its Restricted Subsidiaries; PROVIDED, HOWEVER, that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates;
(5) Indebtedness under Currency Agreements; PROVIDED that in the case
of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(6) Indebtedness of a Restricted Subsidiary of the Company to the
Company or to a Wholly Owned Restricted Subsidiary of the Company for so
long as such Indebtedness is held by the Company or a Wholly Owned
Restricted Subsidiary of the Company, in each case subject to no Lien
(other than pursuant to the Credit Agreement) held by a Person other than
the Company or a Wholly Owned Restricted Subsidiary of the Company;
PROVIDED that if as of any date any Person other than the Company or a
Wholly Owned Restricted Subsidiary of the Company owns or holds any such
Indebtedness or holds a Lien (other than pursuant to the Credit Agreement)
in respect of such Indebtedness, such date shall be deemed the incurrence
of Indebtedness not constituting Permitted Indebtedness by the issuer of
such Indebtedness;
(7) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company and subject to no Lien,
other than pursuant to the Credit Agreement; PROVIDED that (a) any
Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of
the Company is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under this Indenture and the Notes and (b) if
as of any date any Person other than a Wholly Owned Restricted Subsidiary
of the Company owns or holds any such Indebtedness or
-15-
any Person holds a Lien in respect of such Indebtedness, such date shall be
deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness under this clause (7) by the Company;
(8) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; PROVIDED, HOWEVER, that such
Indebtedness is extinguished within five business days of incurrence;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries
in respect of performance bonds, bankers' acceptances, workers'
compensation claims, surety or appeal bonds, payment obligations in
connection with self-insurance or similar obligations incurred in the
ordinary course of business;
(10) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business not to exceed $10.0 million at
any one time outstanding (reduced by the aggregate amount of additional
Indebtedness incurred under clause (1) hereof in reliance of this clause
(10));
(11) guarantees of Indebtedness of the Company by any Restricted
Subsidiary, PROVIDED that such Indebtedness is permitted to be incurred by
another covenant under this Indenture;
(12) Indebtedness of the Company's Foreign Restricted Subsidiaries in
an aggregate principal amount not to exceed $5.0 million at any time
outstanding;
(13) Refinancing Indebtedness; and
(14) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $5.0 million at
any one time outstanding (reduced by the aggregate amount of additional
Indebtedness incurred under clause (1) hereof in reliance of this clause
(14)).
For purposes of determining compliance with Section 4.9 in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (14) above
or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage
Ratio provisions of such covenant, the Company shall, in its sole discretion,
classify (or later reclassify) such item of Indebtedness in any manner that
complies with this covenant. Accrual of interest, 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 Capital Stock in the form of additional shares of the same class of
Disqualified Capital Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Capital Stock for purposes of
Section 4.9.
-16-
"PERMITTED INVESTMENTS" means:
(1) Investments by the Company or any Restricted Subsidiary of the
Company in any Person that is or will become immediately after such
Investment a Guarantor or a Wholly Owned Restricted Subsidiary of the
Company that is not a Guarantor or that will merge or consolidate into the
Company, a Guarantor or a Wholly Owned Restricted Subsidiary of the Company
that is not a Guarantor;
(2) Investments in the Company by any Restricted Subsidiary of the
Company; PROVIDED that any Indebtedness evidencing such Investment is
unsecured and subordinated, pursuant to a written agreement, to the
Company's obligations under the Notes and this Indenture;
(3) Investments in cash and Cash Equivalents;
(4) loans and advances to directors, employees and officers of the
Company and its Restricted Subsidiaries (a) to finance the purchase by such
Persons of Capital Stock of the Company or any of its Restricted
Subsidiaries not in excess of $1.0 million in any twelve month period and
(b) in the ordinary course of business for bona fide business purposes not
in excess of $500,000 at any one time outstanding;
(5) Currency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and not for speculative purposes and otherwise in compliance
with this Indenture;
(6) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (6)
that are at that time outstanding, not to exceed $5.0 million at the time
of such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes
in value);
(7) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(8) Investments made by the Company or its Restricted Subsidiaries as
a result of consideration received in connection with an Asset Sale made in
compliance with Section 4.10;
(9) Investments existing on the Issue Date;
(10) any acquisition of assets solely in exchange for the issuance of
Qualified Capital Stock of the Company or any of its Restricted
Subsidiaries; and
-17-
(11) Investments made by the Company or any of its Restricted
Subsidiaries with the proceeds of a substantially concurrent offering of
Qualified Capital Stock of the Company (which proceeds of any such offering
of Qualified Capital Stock shall not have been, and shall not be, included
in the calculation of the Restricted Payments Basket, except to the extent
the proceeds thereof exceed the amounts used to effect such Investments).
"PERMITTED LIENS" means the following types of Liens:
(1) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(2) Liens securing the Notes and the Guarantees;
(3) Liens securing Indebtedness under the Credit Agreement; PROVIDED
that such Indebtedness does not exceed the greater of (a) the amount of
Indebtedness permitted to be incurred pursuant to clause (2) of the
definition of "Permitted Indebtedness" and (b) the Borrowing Base;
(4) Liens in favor of the Company or any Restricted Subsidiary of the
Company;
(5) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted under
this Indenture and which has been incurred in accordance with the
provisions of this Indenture; PROVIDED, HOWEVER, that such Liens: (i) taken
as a whole are no less favorable to the Holders and are not more favorable
to the lienholders with respect to such Liens than the Liens in respect of
the Indebtedness being Refinanced; and (ii) do not extend to or cover any
property or assets of the Company or any of its Restricted Subsidiaries not
securing the Indebtedness so Refinanced;
(6) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) being contested in good faith by
appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(7) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(8) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
-18-
(9) Liens arising by reward of any judgment, decree or order of any
court but not giving rise to an Event of Default so long as such Liens are
adequately bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order shall not
have been finally terminated or the period within which such proceedings
may be initiated shall not have expired;
(10) survey exceptions, easements, rights-of-way, zoning restrictions
and other similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(11) Liens upon specific items of inventory or other goods and
proceeds of the Company or any of its Restricted Subsidiaries securing such
Person's obligations in respect of bankers' acceptances issued or created
for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;
(12) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(13) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(14) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted pursuant to
clause (4) of the definition of "Permitted Indebtedness";
(15) Liens securing Capitalized Lease Obligations and Purchase Money
Indebtedness; PROVIDED, HOWEVER, that in the case of Capitalized Lease
Obligations, such Liens do not extend to any property or assets which are
not leased property subject to such Capitalized Lease Obligations;
(16) Liens securing Indebtedness under Currency Agreements permitted
to be incurred pursuant to clause (5) of the definition of "Permitted
Indebtedness";
(17) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.9; PROVIDED that:
(a) such Liens secured such Acquired Indebtedness at the time of
and prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company and were not granted
in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company; and
-19-
(b) such Liens do not extend to or cover any property or assets
of the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or
a Restricted Subsidiary of the Company and are no more favorable to
the lienholders than those securing the Acquired Indebtedness prior to
the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company;
(18) Liens securing Indebtedness incurred pursuant to clause (14) of
the definition of "Permitted Indebtedness";
(19) any provision for the retention of title to an asset by the
vendor or transferor of such asset which asset is acquired by the Company
or any Restricted Subsidiary of the Company in a transaction entered into
in the ordinary course of business of the Company or such Restricted
Subsidiary;
(20) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to Obligations
that do not exceed $2.5 million at any one time outstanding and that (a)
are not incurred in connection with the borrowing of money or the obtaining
of advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Company or such Restricted Subsidiary;
(21) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company securing obligations under
precious metals consignment agreements;
(22) any extension, renewal or replacement, in whole or in part, of
any Lien described in clauses (1), (15) or (17) of the definition of
"Permitted Liens"; PROVIDED that any such extension, renewal or replacement
is no more restrictive in any material respect that the Lien so extended,
renewed or replaced and does not extend to any additional property or
assets.
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"PORTAL MARKET" means the Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
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"PUBLIC EQUITY OFFERING" means an underwritten public offering of
Qualified Capital Stock of the Company pursuant to a registration statement
filed with the Commission in accordance with the Securities Act in which the
gross proceeds to the Company are at least $20.0 million.
"PURCHASE DATE" means, with respect to any Note to be repurchased, the
date fixed for such repurchase by or pursuant to this Indenture.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and
its Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment; PROVIDED,
HOWEVER, that (i) the amount of such Indebtedness shall not exceed such purchase
price or cost, (ii) such Indebtedness shall not be secured by any asset other
than the specified asset being financed or, in the case of real property or
fixtures, including additions and improvements, the real property to which such
asset is attached and (iii) such Indebtedness shall be incurred within 90 days
after such acquisition of such asset by the Company or such Restricted
Subsidiary or such installation, construction or improvement.
"PURCHASE PRICE" means the amount payable for the repurchase of any
Note on a Purchase Date, exclusive of accrued and unpaid interest and Additional
Interest (if any) thereon to the Purchase Date, unless otherwise specifically
provided.
"QIB" means a qualified institutional buyer as defined in Rule 144A
under the Securities Act.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"REDEMPTION DATE" means, with respect to any Note to be redeemed, the
date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE" means the amount payable for the redemption of any
Note on a Redemption Date, exclusive of' accrued and unpaid interest and
Additional Interest (if any) thereon to the Redemption Date, unless otherwise
specifically provided.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "REFINANCED" and "REFINANCING"
shall have correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance with
Section 4.9 (other than pursuant to clause (2), (4), (5), (6), (7), (8), (9),
(10), (11), (12) or (14) of the definition of "Permitted Indebtedness"), in each
case, other than Refinancing Indebtedness incurred to Refinance all of the
Notes, that does not:
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(1) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed Refinancing
(plus accrued interest plus the amount of any premium required to be paid
under the terms of the instrument governing such Indebtedness and plus the
amount of reasonable fees and expenses incurred by the Company in
connection with such Refinancing); or
(2) create Indebtedness with: (a) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being Refinanced; or (b) a final maturity earlier than the final maturity
of the Indebtedness being Refinanced; PROVIDED that (x) if such
Indebtedness being Refinanced is Indebtedness solely of the Company, then
such Refinancing Indebtedness shall be Indebtedness solely of the Company
and (y) if such Indebtedness being Refinanced is subordinate or junior to
the Notes, then such Refinancing Indebtedness shall be subordinate to the
Notes at least to the same extent and in the same manner as the
Indebtedness being Refinanced.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers.
"REGULATION S" means Regulation S as promulgated under the Securities
Act.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of the Company of any
property, whether owned by the Company or any Restricted Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such Property.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"SERIES A NOTES" means the Company's 11 5/8% Senior Notes due 2007.
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"SERIES B NOTES" means notes issued by the Company hereunder
containing terms identical to the Series A Notes (except that (i) interest
thereon shall accrue from the last date on which interest was paid on the Series
A Notes or, if no such interest has been paid, from the date of original
issuance, (ii) the legend or legends relating to transferability and other
related matters set forth on the Series A Notes, including the text referred to
in footnote 2 of Exhibit A hereto, shall be removed or appropriately altered,
and (iii) as otherwise set forth herein), to be offered to Holders of Series A
Notes in exchange for Series B Notes pursuant to the Exchange Offer or any
exchange offer specified in any registration rights agreement relating to the
Additional Notes.
"SIGNIFICANT SUBSIDIARY", with respect to any Person, means (1) any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Exchange Act as such Regulation is in effect on the Issue Date and (2) any
Restricted Subsidiary of such Person that, when aggregated with all other
Restricted Subsidiaries of such Person that are not otherwise Significant
Subsidiaries and as to which any event described in clause (f), (g) or (h) of
Section 6.1 hereof has occurred and is continuing, would constitute a
Significant Subsidiary under clause (1) of this definition.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or any
Guarantor that is subordinated or junior in right of payment to the Notes or
such Guarantee, as the case may be.
"SUBSIDIARY", with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned, directly
or indirectly, by such Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA; PROVIDED that in the event the Trust Indenture Act of 1939 is
amended after such date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"TRANSFER RESTRICTED SECURITY" means a Note that is a restricted
security as defined in Rule 144(a)(3) under the Securities Act.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter means the successor serving hereunder.
"UNRESTRICTED SUBSIDIARY" of any Person means:
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(1) any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the
Board of Directors of such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; PROVIDED that:
(1) the Company certifies to the Trustee that such designation
complies with Section 4.7, including that the Company would be permitted to
make, at the time of such designation, (a) a Permitted Investment or (b) an
Investment pursuant to the first paragraph of Section 4.7, in either case,
in an amount (the "DESIGNATION AMOUNT") equal to the fair market value of
the Company's proportionate interest in such Subsidiary on such date; and
(2) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable
with respect to any Indebtedness pursuant to which the lender has recourse
to any of the assets of the Company or any of its Restricted Subsidiaries.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if:
(1) immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.9; and
(2) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. GOVERNMENT SECURITIES" shall mean securities which are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Securities or a specific payment of interest
on or principal of any such U.S. Government Securities held by such custodian
for the account
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of the holder of a depository receipt; PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Securities or the specific payment
of interest on or principal of the U.S. Government Securities evidenced by such
depository receipt.
"U.S. PERSON" means any U.S. Person as defined in Regulation S.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any Wholly
Owned Subsidiary of such Person which at the time of determination is a
Restricted Subsidiary of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding securities which confer on the holders
thereof the right to elect directors or their functional equivalents (other than
in the case of a foreign Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by such Person or any Wholly Owned Subsidiary of such
Person.
B.Section 1.2. OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Affiliate Transaction"............................ 4.11
"Agent Members".................................... 2.6
"Certificated Notes"............................... 2.1
"Change of Control Offer".......................... 4.15
"Change of Control Offer Period"................... 3.9
"Covenant Defeasance".............................. 8.3
"Event of Default"................................. 6.1
"Excluded Sale and Leaseback Transactions"......... 4.10
"Foreign Person"................................... 2.6
"Global Notes"..................................... 2.1
"incur"............................................ 4.9
"Institutional Accredited Investors"............... 2.1
"Legal Defeasance"................................. 8.2
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TERM DEFINED IN SECTION
"Net Proceeds Offer"............................... 4.10
"Net Proceeds Offers Amount"....................... 4.10
"Net Proceeds Offers Trigger Date"................. 4.10
"Offshore Certificated Notes"...................... 2.1
"Paying Agent"..................................... 2.3
"Permanent Regulation S Global Note"............... 2.1
"Private Placement Legend"......................... 2.6
"Registrar"........................................ 2.3
"Regulation S Global Note"......................... 2.1
"Restricted Payment"............................... 4.7
"Restricted Payment Basket"........................ 4.7
"Rule 144A Global Note"............................ 2.1
"Special Redemption"............................... 3.8
"Surviving Entity"................................. 5.1
"Temporary Regulation S Global Note"............... 2.1
"U.S. Certificated Notes".......................... 2.1
C Section 1.3. 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;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
D.Section 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
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(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "OR" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act, the
Exchange Act and the TIA shall be deemed to include substitute, replacement
and successor sections or rules adopted by the Commission from time to
time.
E.Section 1.5. ACTS OF HOLDERS.
1. (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 7.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
2. (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by an officer of a corporation or a member of a
partnership, on behalf of such corporation or partnership, such certificate or
affidavit shall also constitute sufficient proof of his or her authority.
3. (c) The ownership of Notes shall be proved by the register
maintained by the Registrar.
4. (d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange
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therefor or in lieu thereof in respect of anything done or suffered to be done
by the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Note.
II. ARTICLE II.
THE NOTES
A.Section 2.1. FORM AND DATING.
The Series A Notes and the Trustee's certificate of authentication
relating thereto shall 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 in addition to those set forth in Exhibit A hereto. The
Series B Notes shall be substantially in the form of Exhibit B hereto. The
notation on each Note relating to the Guarantees shall be substantially in the
form set forth on Exhibit C hereto. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes and Guarantees shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single permanent global Note in registered form,
substantially in the form set forth in Exhibit A (the "RULE 144A GLOBAL NOTE"),
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided and shall
bear the legend set forth in Section 2.6(h). The aggregate principal amount of
the Rule 144A Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary global
Note in registered form, substantially in the form set forth in Exhibit A (the
"TEMPORARY REGULATION S GLOBAL NOTE"), deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided and shall bear the legend set forth in Section
2.6(h). At any time following 40 days after the later of the commencement of the
offering of the Notes and the Issue Date, upon receipt by the Trustee and the
Company of a duly executed certificate substantially in the form of Exhibit D(1)
hereto, a single permanent Global Note in registered form substantially in the
form set forth in Exhibit A (the "PERMANENT REGULATION S GLOBAL NOTE," and
together with the Temporary Regulation S Global Note, the "REGULATION S GLOBAL
NOTE") duly executed by the Company and authenticated by the Trustee as
hereinafter provided shall be deposited with the Trustee, as custodian for the
Depositary, and the Registrar shall reflect on its books and records the date
and a decrease in the principal amount
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of the Regulation S Global Note in an amount equal to the principal amount of
the beneficial interest in the Regulation S Global Note transferred.
Notes offered and sold to institutional accredited investors (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("INSTITUTIONAL ACCREDITED INVESTORS") shall be issued in the form of permanent
U.S. Certificated Notes in registered form in substantially the form set forth
in Exhibit A (the "US. CERTIFICATED NOTES"). Securities issued pursuant to
Section 2.6 in exchange for interests in the Rule 144A Global Note or the
Regulation S Global Note shall be in the form of permanent Certificated Notes in
registered form substantially in the form set forth in Exhibit A (the "OFFSHORE
CERTIFICATED NOTES").
The Offshore Certificated Notes and U.S. Certificated Notes are
sometimes collectively herein referred to as the "CERTIFICATED NOTES." The Rule
144A Global Note and the Regulation S Global Note are sometimes referred to
herein as the "GLOBAL NOTES."
B.Section 2.2. EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds that office or position at the time a Note
is authenticated, the Note shall nevertheless be valid. Each Guarantor shall
execute a Guarantee in the manner set forth in Section 11.7.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee, upon a written order of the Company signed by two
Officers of the Company, together with the other documents required by Sections
13.4 and 13.5 hereof, shall authenticate (i) Series A Notes for original issue
on the Issue Date in the aggregate principal amount not to exceed $177,000,000
and (ii) subject to Section 4.9, Additional Notes. The Trustee, upon written
order of the Company signed by two Officers of the Company, together with the
other documents required by Sections 13.4 and 13.5 hereof, shall authenticate
Series B Notes; PROVIDED that such Series B Notes shall be issuable only upon
the valid surrender for cancellation of Series A Notes of a like aggregate
principal amount in accordance with the Exchange Offer or an exchange offer
specified in any registration rights agreement relating to the Additional Notes.
Such written order of the Company shall specify the amount of Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated. Any Additional Notes shall be part of the same issue as the Notes
being issued on the Issue Date and will vote on all matters as one class with
the Notes being issued on the Issue Date, including, without limitation,
waivers, amendments, redemptions, Change of Control Offers and Net Proceeds
Offers. For the purposes of this Indenture, except for Section 4.9, references
to the Notes include Additional Notes, if any.
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The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or with any Affiliate of the Company.
C.Section 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented or surrendered for registration of transfer or for exchange
("REGISTRAR") and an office or agency where Notes may be presented for payment
("PAYING AGENT"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. At the option of the Company, payment of interest and
Additional 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, Redemption Price and Purchase Price of, and interest and Additional
Interest (if any) on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Trustee or the Paying
Agent. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Paying 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
may act as Paying Agent or Registrar. The Depositary shall, by acceptance of a
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book-entry system maintained by the Depositary
(or its agent), and that ownership of a beneficial interest in the Note shall be
required to be reflected in a book entry.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes,
until such time as the Trustee has resigned or a successor has been appointed.
D.Section 2.4. PAYING AGENTS TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that such the Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment of
principal and of any premium, if any, interest and Additional Interest, if any,
on the Notes, and shall 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 and account for any money disbursed. Upon payment over to the Trustee,
the Paying Agent (if other than the Company) shall have no further liability for
the money. If the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
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E.Section 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish or cause the Registrar to
furnish to the Trustee at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Notes, and the Company shall otherwise comply
with TIA Section 312(a).
F.Section 2.6. TRANSFER AND EXCHANGE.
1.(a) TRANSFER AND EXCHANGE GENERALLY: BOOK ENTRY PROVISIONS. Upon
surrender for registration of transfer of any Note to the Registrar, and
satisfaction of the requirements for such transfer set forth in this Section
2.6, the Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Notes
of any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Holder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Registrar,
and the Notes shall be duly executed by the Holder thereof or his attorney duly
authorized in writing. Except as otherwise provided in this Indenture, and in
addition to the requirements set forth in the legend referred to in Section
2.6(h)(i) below, in connection with any transfer of Transfer Restricted
Securities any request for transfer shall be accompanied by a certification to
the Trustee relating to the manner of such transfer substantially in the form of
Exhibit D(2) hereto.
2.(b) BOOK-ENTRY PROVISIONS FOR THE GLOBAL NOTES. The Rule 144A
Global Note and Regulation S Global Note initially shall (i) be registered in
the name of the Depositary or the nominee of such Depositary, (ii) be delivered
to the Trustee as custodian for the Depositary and (iii) bear legends as set
forth in Section 2.6(h).
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Rule 144A Global Note or
Regulation S Global Note, as the case may be, held on their behalf by the
Depositary, or the Trustee as its custodian, or under the Rule 144A Global Note
or Regulation S Global Note, as the case may be, and the Depositary may be
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treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of Rule 144A Global Note or Regulation S Global Note, as
the case may be, for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Note.
Transfers of the Rule 144A Global Note and the Regulation S Global
Note shall be limited to transfers of such Rule 144A Global Note or Regulation S
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Beneficial interests in the Rule 144A Global Note and
the Regulation S Global Note may be transferred in accordance with the
applicable rules and procedures of the Depositary and the provisions of this
Section 2.6. The registration of transfer and exchange of beneficial interests
in the Global Note, which does not involve the issuance of a Certificated Note,
shall be effected through the Depositary, in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the procedures of
the Depositary therefor. The Trustee shall have no responsibility or liability
for any act or omission of the Depositary.
At any time at the request of the beneficial holder of an interest in
the Rule 144A Global Note or Permanent Regulation S Global Note to obtain a
Certificated Note, such beneficial holder shall be entitled to obtain a
Certificated Note upon written request to the Trustee and the Note Custodian in
accordance with the standing instructions and procedures existing between the
Note Custodian and Depositary for the issuance thereof. Upon receipt of any such
request, the Trustee, or the Note Custodian at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Note Custodian, the aggregate principal amount of
the Rule 144A Global Note or Permanent Regulation S Global Note, as appropriate,
to be reduced by the principal amount of the Certificated Note issued upon such
request to such beneficial holder and, following such reduction, the Company
will execute and the Trustee will authenticate and deliver to such beneficial
holder (or its nominee) a Certificated Note or Certificated Notes in the
appropriate aggregate principal amount in the name of such beneficial holder (or
its nominee) and bearing such restrictive legends as may be required by this
Indenture.
3.(c) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Transfer Restricted Security to any Institutional
Accredited Investor that is not a QIB (other than any Person that is not a U.S.
Person as defined under Regulation S, a "FOREIGN PERSON"):
(i) the Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (x) (A) the requested
transfer is at least two years after the later of the Issue Date of the
Notes and (B) the proposed transferee has certified to the Registrar that
the requested transfer is at least two years after last date on which such
Note was held by an Affiliate of the Company, or (y) the proposed
transferee has delivered to the Registrar (A) a certificate substantially
in the form of Exhibit E hereto and (B) such certifications, legal opinions
and other information as the Trustee and the Company may
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reasonably request to confirm that such transaction is in compliance with
the Securities Act; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the documents, if any, required by clause (i) and (y) instructions
given in accordance with the Depositary's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Global Note in an amount equal to
the principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Certificated Notes of like tenor and
amount.
4.(d) TRANSFERS TO QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Transfer Restricted
Security to a QIB (other than Foreign Persons):
(i) if the Note to be transferred consists of Certificated Notes or an
interest in the Regulation S Global Note, the Registrar shall register the
transfer if such transfer is being made by a proposed transferor who has
checked the box provided for on a certificate substantially in the form of
Exhibit D(2) stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who is a QIB within the meaning of
Rule 144A and is aware that the sale to it is being made in reliance on
Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Note to be
transferred consists of Certificated Notes or an interest in the Regulation
S Global Note, upon receipt by the Registrar of the documents referred to
in clause (i) and instructions given in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the Rule
144A Global Note in an amount equal to the principal amount of the
Certificated Notes or the interest in the Regulation S Global Note, as the
case may be, to be transferred, and the Trustee shall cancel the
Certificated Notes or decrease the amount of the Regulation S Global Note
so transferred.
5.(e) TRANSFERS OF INTERESTS IN THE TEMPORARY REGULATION S GLOBAL
NOTE. The following provisions shall apply with respect to the registration of
any proposed transfer of interests in the Temporary Regulation S Global Note:
(i) the Registrar shall register the transfer of an interest in the
Temporary Regulation S Global Note if (x) the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit F hereto stating, among other things, that the proposed transferee
is a Foreign Person or (y) the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on a certificate
substantially in the form of Exhibit D(2) stating, or has otherwise advised
the Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee
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who is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A; and
(ii) if the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Rule 144A Global Note in an
amount equal to the principal amount of the Temporary Regulation S Global
Note to be transferred, and the Trustee, as Note Custodian, shall decrease
the amount of the Temporary Regulation S Global Note.
6.(f) TRANSFERS TO FOREIGN PERSONS. The following provisions shall
apply with respect to any transfer of a Transfer Restricted Security to a
Foreign Person:
(i) the Registrar shall register any proposed transfer of a Note to
a Foreign Person upon receipt of a certificate substantially in the form of
Exhibit F hereto from the proposed transferor and such certifications,
legal opinions and other information as the Trustee or the Company may
reasonably request; and
(ii) (a) if the proposed transferor is an Agent Member holding a
beneficial interest in the Rule 144A Global Note or the Note to be
transferred consists of Certificated Notes, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (i) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the Rule 144A Global Note in an
amount equal to the principal amount of the beneficial interest in the Rule
144A Global Note or cancel the Certificated Notes, as the case may be, to
be transferred, and (b) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Regulation S Global Note in an amount equal to the principal amount of
the Certificated Notes to be transferred, and the Trustee shall decrease
the amount of the Rule 144A Global Note.
7.(g) THE DEPOSITARY. The Depositary shall be a clearing agency
registered under the Exchange Act. The Company initially appoints The Depository
Trust Company to act as Depositary with respect to the Global Note. Initially,
the Rule 144A Global Note and the Regulation S Global Note shall be issued to
the Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Note Custodian for Cede & Co.
Notes in Certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.6 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such
Certificated
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Notes in Certificated form to the persons in whose names such Notes
in Certificated form are so registered.
Certificated Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in the Rule 144A Global Note or the
Permanent Regulation S Global Note, as the case may be, if at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Rule
144A Global Note or the Permanent Regulation S Global Note, as the case may
be, and a successor Depositary is not appointed by the Company within 90
days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Certificated Notes under
this Indenture,
and the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver Certificated Notes in an aggregate principal amount equal to the
principal amount of the Rule 144A Global Note or the Permanent Regulation S
Global Note, as the case may be, in exchange for such Global Notes.
8.(h) LEGENDS.
(a) (i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and Certificated Notes (and
all Notes issued in exchange therefor or substitution thereof) shall (x) be
subject to the restrictions on transfer set forth in this Section 2.6 (including
those set forth in the legend below) unless such restrictions on transfer shall
be waived by written consent of the Company, and the Holder of each Transfer
Restricted Security, by such Holder's acceptance thereof, agrees to be bound by
all such restrictions on transfer and (y) bear the legend set forth below (the
"PRIVATE PLACEMENT LEGEND"):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED
INVESTOR"), (2) AGREES THAT IT WILL
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NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL
OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AMERICAN ACHIEVEMENT
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE FOR THIS NOTE), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF AMERICAN ACHIEVEMENT CORPORATION SO REQUESTS),
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED TRANSFEREE
IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND AMERICAN ACHIEVEMENT CORPORATION SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(b) (ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Global
Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
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(a) in the case of any Transfer Restricted Security that is a
Certificated Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Certificated Note that
does not bear the legend set forth in (i) above and rescind any restriction
on the transfer of such Transfer Restricted Security; and
(b) in the case of any Transfer Restricted Security represented by a
Global Note, such Transfer Restricted Security shall not be required to
bear the legend set forth in (i) above, but shall continue to be subject to
the provisions of Section 2.6(b) hereof; PROVIDED, HOWEVER, that with
respect to any request for an exchange of a Transfer Restricted Security
that is represented by a Global Note for a Certificated Note that does not
bear the legend set forth in (i) above, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in writing to the Registrar
that such request is being made pursuant to Rule 144 (such certifications
to be substantially in the form of Exhibit D(2) hereto).
(c) (iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.2 hereof, the Trustee shall authenticate
Series B Notes in exchange for Series A Notes accepted for exchange in the
Exchange Offer, which Series B Notes shall not bear the legend set forth in (i)
above, and the Registrar shall rescind any restriction on the transfer of such
Series A Notes, in each case unless the Company has notified the Registrar in
writing that the Holder of such Series A Notes is either (A) a broker-dealer,
(B) a Person participating in the distribution of the Series A Notes or (C) a
Person who is an affiliate (as defined in Rule 144A) of the Company.
(d) (iv) Each Global Note, whether or not a Transfer Restricted
Security, shall also bear the following legend on the fact thereof:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS
NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW
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YORK CORPORATION ("DTC"), 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 IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(e) (v) Any Global Note may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Note Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in order
for the Notes to be tradable on the PORTAL Market or tradable on Euroclear or
Clearstream or as may be required for the Notes to be tradable on any other
market developed for trading of securities pursuant to Rule 144A or Regulation S
under the Securities Act or required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or automated quotation system upon which the Notes may be listed or
traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Notes are subject.
9.(i) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or canceled, all Global Notes shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Certificated Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Notes shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction. In the event of any transfer of any beneficial interest between the
Rule 144A Global Note and the Regulation S Global Note in accordance with the
standing procedures and instructions between the Depositary and the Note
Custodian and the transfer restrictions set forth herein, the aggregate
principal amount of each of the Rule 144A Global Note and the Regulation S
Global Note shall be appropriately increased or decreased, as the case may be,
and an endorsement shall be made on each of the Rule 144A Global Note and the
Regulation S Global Note by the Trustee or the Note Custodian, at the direction
of the Trustee, to reflect such reduction or increase.
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10.(j) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(a) (i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Certificated Notes and
Global Notes at the Registrar's request.
(b) (ii) No service charge shall be made to a Holder for any
registration of transfer, fee 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 3.6
and 9.5 hereof).
(c) (iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(d) (iv) All Certificated Notes and Global Notes issued upon
any registration of transfer or exchange of Certificated Notes or Global Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Certificated Notes or
Global Notes surrendered upon such registration of transfer or exchange.
(e) (v) The Company shall not be required:
(1)(a) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before the day
of any selection of Notes for redemption under Section 3.2 hereof and
ending at the close of business on the day of selection; or
(2)(b) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part; or
(3)(c) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(f) (vi) Prior to due presentment of 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 all payments with respect to such Notes, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
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(g) (vii) The Trustee shall authenticate Certificated Notes
and Global Notes in accordance with the provisions of Section 2.2 hereof.
G.Section 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or either the
Company or the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, the Company shall issue and the Trustee, upon receipt
of an authentication order in accordance with Section 2.2 hereof, shall
authenticate a replacement Note if the Trustee's requirements for replacement of
Notes are met. If required by the Trustee or the Company, an indemnity bond must
be supplied by the Holder that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Trustee and the Company each may charge such Holder for their
expenses in replacing such Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
H.Section 2.8. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes that have been
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 or the Note Custodian in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.9 hereof, a Note does not cease to be outstanding because the Company
or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it shall cease
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser for value.
If the principal amount of any Note is considered paid under Section
4.1 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 shall be deemed to be no longer outstanding and shall cease to accrue
interest.
I.Section 2.9. 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, the Guarantors or by any Affiliate thereof shall be considered as
though not outstanding, except that for the purposes of
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determining whether the Trustee shall be protected in relying on any such
direction, waiver of consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded. The Company agrees to notify
the Trustee of the existence of any such treasury Notes or Notes owned by the
Company, any Guarantor or an Affiliate thereof.
J.Section 2.10. TEMPORARY NOTES.
Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee, upon receipt of an authentication order in accordance
with Section 2.2 hereof, shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of Certificated Notes, but may have such
variations as the Company considers appropriate for temporary Notes and as shall
be reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Certificated Notes in exchange
for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
K.Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or Paying Agent, and
no one else shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of all canceled
Notes in accordance with the Trustee's usual procedures. The Trustee shall
maintain a record of all canceled Notes. All cancelled Notes shall be delivered
to the Company. Subject to Section 2.7 the Company may not issue new Notes to
replace Notes that have been paid or that have been delivered to the Trustee for
cancellation.
L.Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, the
Company shall pay the defaulted interest in any lawful manner PLUS, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.1 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, PROVIDED that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
M.Section 2.13. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer and
subject to Section 2.12 hereof, the Company, the Trustee, any Paying Agent, any
co-registrar and any Registrar
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may deem and treat the person in whose name any Note shall be registered upon
the register of Notes kept by the Registrar as the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
the ownership or other writing thereon made by anyone other than the Company,
any co-registrar or any Registrar) for the purpose of receiving all payments
with respect to such Note and for all other purposes, and none of the Company,
the Trustee, any Paying Agent, any co-registrar or any Registrar shall be
affected by any notice to the contrary.
N.Section 2.14. CUSIP NUMBERS.
The Company in issuing the Notes may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall notify
the Trustee of any change to the CUSIP numbers.
O.Section 2.15. DESIGNATION.
The Indebtedness evidenced by the Notes and the Guarantees is hereby
irrevocably designated as "Senior Indebtedness" as defined and for purposes of
the indenture governing the CBI Subordinated Notes and as "senior indebtedness"
or such other term denoting seniority for the purposes of any other existing or
future Indebtedness of the Company or a Guarantor, as the case may be, which the
Company or such Guarantor, as the case may be, makes subordinate to any senior
(or such other term denoting seniority) indebtedness of such Person.
III.ARTICLE III.
REDEMPTION AND REPURCHASE
A.Section 3.1. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the provisions of
Section 3.7 or 3.8 hereof, it shall furnish to the Trustee, at least 45 days but
not more than 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee), an Officers' Certificate setting forth
the Section of this Indenture pursuant to which the redemption shall occur, the
Redemption Date, the principal amount of Notes to be redeemed and the Redemption
Price.
If the Company is required to offer to repurchase Notes pursuant to
the provisions of Section 4.10 or 4.15 hereof, it shall notify the Trustee in
writing, at least 45 days but not more than 60 days before the Purchase Date, of
the Section of this Indenture pursuant to which the repurchase shall occur, the
Purchase Date, the principal amount of Notes required to be repurchased and the
Purchase Price and shall furnish to the Trustee an Officers' Certificate to the
effect that (a) the Company is required to make or has made a Net Proceeds Offer
or a Change of Control Offer, as the case may be, and (b) the conditions set
forth in Section 4.10 or 4.15 hereof, as the case may be, have been satisfied.
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If the Registrar is not the Trustee, the Company shall, concurrently
with each notice of redemption or repurchase, cause the Registrar to deliver to
the Trustee a certificate (upon which the Trustee may rely) setting forth the
principal amounts of Notes held by each Holder.
B.Section 3.2. SELECTION OF NOTES.
Except as set forth below, if less than all of the Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof to be redeemed
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not then
listed on a national securities exchange on a PRO RATA basis, by lot or by such
method as the Trustee shall deem fair and appropriate. In the event of partial
redemption by lot, the particular Notes or portions thereof to be redeemed shall
be selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the Redemption Date by the Trustee from the outstanding Notes not
previously called for redemption.
If less than all of the Notes tendered are to be repurchased pursuant
to the provisions of Section 4.10 hereof, the Trustee shall select the Notes or
portions thereof to be repurchased in compliance with Section 4.10. In the event
of partial repurchase by lot, the particular Notes or portions thereof to be
repurchased shall be selected at the close of business of the last Business Day
prior to the Purchase Date. If less than all of the Notes tendered are to be
repurchased pursuant to the provisions of Section 3.8 hereof, the Trustee shall
select the Notes only on a PRO RATA basis or on as nearly a PRO RATA basis as is
practicable (subject to DT C procedures), unless such method is otherwise
prohibited.
The Trustee shall promptly notify the Company in writing of the Notes
or portions thereof selected for redemption or repurchase and, in the case of
any Note selected for partial redemption or repurchase, the principal amount
thereof to be redeemed or repurchased. Notes and portions thereof selected shall
be in amounts of $1,000 or integral multiples of $1,000; except that if all of
the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes
held by such Holder, even if not a multiple of $1,000, shall be redeemed. No
Notes of a principal amount of $1,000 or less shall be redeemed in part.
C.Section 3.3. NOTICE OF OPTIONAL OR SPECIAL REDEMPTION.
In the event Notes are to be redeemed pursuant to Section 3.7 or 3.8
hereof, at least 30 days but not more than 60 days before the Redemption Date,
the Company shall mail a notice of redemption to each Holder whose Notes are to
be redeemed in whole or in part, with a copy to the Trustee.
The notice shall identify the Notes or portions thereof to be redeemed
(including the CUSIP number, if any) and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
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(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price, Additional Interest, if any, and,
unless the Redemption Date is after a record date and or before the
succeeding interest payment date, accrued interest thereon to the
Redemption Date;
(f) that, unless the Company defaults in making the redemption
payment, interest and any Additional Interest on Notes called for
redemption will cease to accrue on and after the Redemption Date, and the
only remaining right of the Holders of such Notes is to receive payment of
the Redemption Price, any Additional Interest and, unless the Redemption
Date is after a record date and on or before the succeeding interest
payment date, accrued interest thereon to the Redemption Date upon
surrender to the Paying Agent of the Notes redeemed;
(g) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portions thereof) to be redeemed, as well as
the aggregate principal amount of the Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption;
(h) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed; and
(i) 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
and that reliance may be placed only on the other identification numbers
printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED that the Company
shall deliver to the Trustee, at least 40 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.
D.Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes or portions thereof called
for redemption become due and payable on the Redemption Date at the Redemption
Price. Upon surrender to any Paying Agent, such Notes or portions thereof shall
be paid at the Redemption Price, PLUS Additional Interest, if any, and accrued
interest to the Redemption Date; PROVIDED, HOWEVER, that installments of
interest which are due and payable on or prior to the Redemption Date shall be
payable to the Holders of such Notes, registered as such, at the close of
business on the relevant record date for the payment of such installment of
interest.
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E.Section 3.5. DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE.
On or before 10:00 a.m. Eastern Time on each Redemption Date or
Purchase Date, the Company shall irrevocably deposit with the Trustee or with
the Paying Agent money sufficient to pay the aggregate amount due on all Notes
to be redeemed or repurchased on that date, including without limitation any
accrued and unpaid interest and Additional Interest, if any, to the Redemption
Date or Repurchase Date. Upon written request by the Company, the Trustee or the
Paying Agent shall promptly return to the Company any money not required for
that purpose.
Unless the Company defaults in making such payment, interest and any
Additional Interest on the Notes to be redeemed or repurchased will cease to
accrue on the applicable Redemption Date or Purchase Date, whether or not such
Notes are presented for payment. If any Note called for redemption shall not be
so paid upon surrender because of the failure of the Company to comply with the
preceding paragraph, interest will be paid on the unpaid principal, from the
applicable Redemption Date or Purchase Date until such principal is paid, and on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.1 hereof.
F.Section 3.6. NOTES REDEEMED OR REPURCHASED IN PART.
Upon surrender of a Note that is redeemed or repurchased in part, the
Company shall issue and the Trustee shall authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to portion of the
Note surrendered that is not to be redeemed or repurchased.
G.Section 3.7. OPTIONAL REDEMPTION.
The Company may redeem any or all of the Notes at any time on or after
January 1, 2005 at the Redemption Prices set forth in the Notes (an "OPTIONAL
REDEMPTION"). Any redemption pursuant to this Section 3.7 shall be made pursuant
to the provisions of Sections 3.1 through 3.6 hereof.
H.Section 3.8. SPECIAL REDEMPTION.
In the event the Company completes one or more Public Equity Offerings
on or before January 1, 2005, the Company, at its option, may use the net cash
proceeds from any such Public Equity Offering to redeem up to 35% of the
original principal amount of the Notes (a "SPECIAL REDEMPTION") at a Redemption
Price of 111.625% of the principal amount thereof, together with accrued and
unpaid interest and Additional Interest, if any, to the date of redemption,
PROVIDED, HOWEVER, that at least 65% of the original principal amount of the
Notes will remain outstanding immediately after each such Special Redemption;
and PROVIDED, FURTHER, that such Special Redemption shall occur within 120 days
after the date of the closing of the applicable Public Equity Offering. Any
redemption pursuant to this Section 3.8 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
I.Section 3.9. REPURCHASE UPON CHANGE OF CONTROL OFFER.
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In the event that, pursuant to Section 4.15 hereof, the Company shall
be required to commence a Change of Control Offer, it shall follow the
procedures specified below.
The Change of Control Offer shall remain open for a period from the
date of the mailing of the notice of the Change of Control Offer described in
the next paragraph until a date determined by the Company which is at least 30
but no more than 45 days from the date of mailing of such notice and no longer,
except to the extent that a longer period is required by applicable law (the
"CHANGE OF CONTROL OFFER PERIOD"). On the Purchase Date, which shall be no later
than the last day of the Change of Control Offer Period, the Company shall
purchase the principal amount of Notes properly tendered in response to the
Change of Control Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
Within 30 days following any Change of Control, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Change of Control Offer. The Change of
Control shall be made to all Holders. The notice, which shall govern the terms
of the Change of Control Offer, shall state:
(a) the transaction or transactions that constitute the Change of
Control, providing information, to the extent publicly available, regarding
the Person or Persons acquiring control, and stating that the Change of
Control Offer is being made pursuant to this Section 3.9 and Section 4.15
hereof and that, to the extent lawful, all Notes tendered will be accepted
for payment;
(b) the Purchase Price, the last day of the Change of Control Offer
Period, and the Purchase Date;
(c) that any Note not properly tendered or otherwise not accepted for
repurchase will continue to accrue interest and Additional Interest, if
any;
(d) that, unless the Company defaults in the payment of the amount due
on the Purchase Date, all Notes or portions thereof accepted for repurchase
pursuant to the Change of Control Offer shall cease to accrue interest and
Additional Interest, if any, after the Purchase Date;
(e) that Holders electing to have any Notes purchased pursuant to the
Change of Control Offer will be required to tender the Notes, with the form
entitled Option of Holder To Elect Purchase on the reverse of the Notes
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 not later than the third Business Day preceding the
Purchase Date;
(f) 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 Change of Control Offer Period, a
telegram, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for repurchase, and a
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statement that such Holder is withdrawing his election to have the Notes
redeemed in whole or in part; and
(g) that Holders whose Notes are being repurchased only in part will
be issued new Notes equal in principal amount to the portion of the Notes
tendered (or transferred by book-entry transfer) that is not to be
repurchased, which portion must be equal to $1,000 in principal amount or
an integral multiple thereof.
On or before the Purchase Date, the Company shall to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Purchase Price, together with accrued and unpaid interest
and Additional Interest, if any, thereon to the Purchase Date in respect of all
Notes or portions thereof so tendered and accepted for repurchase and (iii)
deliver or cause to be delivered to the Trustee the Notes so accepted together
with an Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being repurchased by the Company. The Paying Agent shall
promptly (but in any case not later than five days after the Purchase Date) mail
to each Holder of Notes so repurchased the amount due in connection with such
Notes, and the Company shall promptly issue a new Note, and the Trustee, upon
written request from the Company in the form of an Officers' Certificate shall
authenticate and mail or deliver (or cause to transfer by book entry) to each
relevant Holder a new Note, in a principal amount equal to any unpurchased
portion of the Notes surrendered to the Holder thereof; PROVIDED, that each such
new Note shall be in a principal amount of $l,000 or and integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Purchase Date.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Additional Interest, if any, in each case to the Purchase Date, 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 pursuant to
the Change of Control Offer.
J.Section 3.10. REPURCHASE UPON APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence a Net Proceeds Offer, it shall follow the procedures
specified below.
The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The Net
Proceeds Offer shall be made to all Holders. Each Net Proceeds Offer will be
mailed to the record Holders as shown on the register of Holders within 25 days
following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and
shall comply with the procedures set forth in this Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Notes in
whole or in part in integral multiples of $1,000 in exchange for cash. A Net
Proceeds Offer shall remain open for a period of 20 business days or such longer
period as may be required by law. The notice, which shall govern the terms of
the Net Proceeds Offer, shall state:
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(a) that the Net Proceeds Offer is being made pursuant to this Section
3.10 and Section 4.10 hereof;
(b) the Net Proceeds Offer Amount, the Purchase Price and the Purchase
Date;
(c) that any Note not properly tendered or otherwise not accepted for
repurchase shall continue to accrue interest and Additional Interest, if
any;
(d) that, unless the Company defaults in the payment of the amount due
on the Purchase Date, all Notes or portions thereof accepted for repurchase
pursuant to the Net Proceeds Offer shall cease to accrue interest and
Additional Interest, if any, after the Purchase Date;
(e) that Holders electing to have any Notes repurchased pursuant to
any Net Proceeds Offer shall be required to tender the Notes, with the form
entitled Option of Holder To Elect Purchase on the reverse of the Notes
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 prior to the close of business on the third
Business Day preceding the Purchase Date;
(f) 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 Purchase Date, a telegram, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Notes delivered for repurchase and a statement that such Holder is
withdrawing his election to have such Notes repurchased in whole or in
part;
(g) that, to the extent Holders properly tender Notes and holders of
Pari Passu Indebtedness properly tender such Indebtedness in an amount
exceeding the Net Proceeds Offer Amount, the tendered Notes and Pari Passu
Indebtedness will be purchased on a PRO RATA basis based on the aggregate
amounts of Notes and Pari Passu Indebtedness tendered (and the Trustee
shall select the tendered Notes of tendering Holders on a PRO RATA basis
based on the amount of Notes tendered); and
(h) that Holders whose Notes are being repurchased only in part will
be issued new Notes equal in principal amount to the portion of the Notes
tendered (or transferred by book-entry transfer) that is not to be
repurchased, which portion must be equal to $1,000 in principal amount or
an integral multiple thereof.
On or before the Purchase Date, the Company shall to the extent
lawful, (i) accept for payment, on a PRO RATA basis in accordance with this
Indenture to the extent necessary, the Net Proceeds Offer Amount of (A) Notes or
portions thereof properly tendered pursuant to the Net Proceeds Offer and (B)
properly tendered Pari Passu Indebtedness, or if less than the Net Proceeds
Offer Amount has been tendered, all Notes and Pari Passu Indebtedness properly
tendered, (ii) deposit with the Paying Agent an amount equal to the Purchase
Price, PLUS accrued and unpaid interest and Additional Interest, if any, thereon
to the Purchase Date in respect of all Notes or portions thereof so
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tendered and accepted for repurchase and (iii) deliver or cause to be delivered
to the Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
repurchased by the Company. The Paying Agent shall promptly (but in any case not
later than five days after the Purchase Date) mail to each Holder of Notes so
repurchased the amount due in connection with such Notes, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company in the form of an Officers' Certificate shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion to the Holder thereof; PROVIDED, that each such new Note
shall be in a principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of the Net Proceeds Offer on or as
soon as practicable after the Purchase Date.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Additional Interest, if any, in each case to the Purchase Date, 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 to the Net
Proceeds Offer.
IV.ARTICLE IV.
COVENANTS
A.Section 4.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company shall pay or cause to be paid the principal, Redemption
Price and Purchase Price of, and interest on the Notes on the dates, in the
amounts and in the manner provided herein and in the Notes. Principal,
Redemption Price, Purchase Price and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company, 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 the aggregate amount
then due. The Company shall pay all Additional Interest, if any, on the dates,
in the amounts and in the manner set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal, Redemption Price
and Purchase Price at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
B.Section 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
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served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate 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 shall in any manner relieve the
Company of its obligations to maintain an office or agency in the Borough of
Manhattan, the City of
New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3. The Trustee may resign such agency at any time by giving written notice to
the Company no later than 30 days prior to the effective date of such
resignation.
C.Section 4.3. REPORTS.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding and prior to the Company being
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will deliver to the Trustee, within the time periods specified
in the Commission's rule and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries and, with
respect to the annual financial statements only, a report thereon by the
Company's certified independent accountants; and
(ii) all current reports that would be required to be filed with the
Commission on Form 8-K if the Company were required to file such reports,
in each case within the time periods specified in the Commission's rules
and regulations.
In addition, following the consummation of the Exchange Offer, whether
or not required by the rules and regulations of the Commission, the Company will
file a copy of all such information and reports with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Company has agreed that, for so long as any Notes
remain outstanding, it will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information
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required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee 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).
D.Section 4.4. COMPLIANCE CERTIFICATE.
The Company and each Guarantor shall deliver to the Trustee, within
120 days after the end of each fiscal year, an Officers' Certificate further
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 in all
material respects, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture in all material respects and is not in Default in the performance or
observance of any of the terms, provisions and conditions of this Indenture
(and, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default) of which he or she may have knowledge, and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which, payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event.
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 4.3 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV or Article V hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith (and in any event within five Business Days)
upon any Officer of the Company becoming aware of any Default or Event of
Default an Officers' Certificate specifying such Default or Event of Default.
E.Section 4.5. TAXES.
The Company shall pay or discharge, and shall cause each of its
Subsidiaries to pay or discharge, 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.
F.Section 4.6. STAY, EXTENSION AND USURY LAWS.
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The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, 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 (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though such law has not
been enacted.
G.Section 4.7. LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on or in
respect of shares of Capital Stock of the Company or any Restricted
Subsidiary to holders of such Capital Stock, other than (a) dividends or
distributions payable in Qualified Capital Stock of the Company and (b) in
the case of a Restricted Subsidiary, dividends or distributions payable (i)
in Qualified Capital Stock of such Restricted Subsidiary and (ii) to the
Company and to any other Restricted Subsidiary and pro rata dividends or
distributions payable to minority stockholders of such Restricted
Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Restricted Subsidiary, other than such
Capital Stock held by the Company or any Restricted Subsidiary;
(3) make any principal payment on, purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled
final maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Indebtedness; or
(4) make any Investment (other than Permitted Investments) (each of
the foregoing actions set forth in clauses (1), (2), (3) and (4) being
referred to as a "RESTRICTED PAYMENT");
if at the time of such Restricted Payment or immediately after giving
effect thereto,
(i) a Default or an Event of Default shall have occurred and be
continuing;
(ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.9 hereof; or
(iii) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market
value of such property as determined in
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good faith by the Board of Directors of the Company) shall exceed the sum
(the "RESTRICTED PAYMENTS BASKET") of:
(v) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss) of the Company earned from the beginning of the first full
fiscal quarter commencing subsequent to the Issue Date and ending on
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such proposed
Restricted Payment (the "REFERENCE DATE") (treating such period as a
single accounting period); plus
(w) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Restricted Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and
on or prior to the Reference Date of Qualified Capital Stock of the
Company (but excluding any debt security that is convertible into, or
exchangeable for, Qualified Capital Stock) (excluding any net cash
proceeds from a Public Equity Offering to the extent used to redeem
the Notes in compliance with the provisions set forth under Section
3.8 hereof); plus
(x) without duplication of any amounts included in clause
(iii)(w) above, 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's
Capital Stock (excluding any net cash proceeds from a Public Equity
Offering to the extent used to redeem the Notes in compliance with the
provisions set forth under Section 3.8 hereof); plus
(y) the amount by which the aggregate principal amount (or
accreted value, if less) of Indebtedness or the amount by which
Disqualified Capital Stock of the Company and its Restricted
Subsidiaries is reduced on the Company's consolidated balance sheet
upon the conversion or exchange subsequent to the Issue Date of any
Indebtedness (including Disqualified Capital Stock) which is
convertible into or exchangeable for Qualified Capital Stock of the
Company, together with the net cash proceeds received by the Company
at the time of such conversion; plus
(z) without duplication, the sum of:
(1) the aggregate amount returned in cash to the Company or
any Restricted Subsidiary of the Company on or with respect to
Investments (other than Permitted Investments) made subsequent to
the Issue Date whether through interest payments, principal
payments, dividends or other distributions or payments;
(2) the net cash proceeds received by the Company or any of
its Restricted Subsidiaries from the disposition of all or any
portion of such Investments (other than to a Restricted
Subsidiary of the Company); and
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(3) upon redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the fair market value of such Subsidiary;
PROVIDED, HOWEVER, that the sum of clauses (1), (2) and (3) above shall not
exceed the aggregate amount of all such Investments made subsequent to the Issue
Date.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
(2) the repurchase, redemption or other acquisition or retirement of
any shares of Capital Stock of the Company or any Restricted Subsidiary of
the Company, either (i) solely in exchange for shares of Qualified Capital
Stock of the Company or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Restricted
Subsidiary of the Company) of shares of Qualified Capital Stock of the
Company;
(3) the payment of principal, the repurchase, retirement, redemption
or other repayment of any Subordinated Indebtedness either (i) solely in
exchange for shares of Qualified Capital Stock of the Company, or (ii)
through the application of net proceeds of a substantially concurrent sale
for cash (other than to a Restricted Subsidiary of the Company) of (a)
shares of Qualified Capital Stock of the Company or (b) if no Default or
Event of Default shall have occurred and be continuing, Refinancing
Indebtedness;
(4) if no Default or Event of Default shall have occurred and be
continuing, repurchases by the Company of Capital Stock from directors or
employees or former directors or employees of the Company or any of its
Subsidiaries or their authorized representatives, estates or beneficiaries
upon the death, disability or termination of employment of such employees,
in an aggregate amount not to exceed $500,000 in any twelve-month period;
(5) the repurchase of any Subordinated Indebtedness at a purchase
price not greater than 101% of the principal amount of such Indebtedness in
the event of a change of control in accordance with provisions similar to
Section 4.15 hereof; PROVIDED that, prior to such repurchase, the Company
has made the Change of Control Offer as provided in such covenant with
respect to the Notes and has repurchased all Notes validly tendered for
payment in connection with such Change of Control Offer;
(6) the payment or distribution, to dissenting holders of Capital
Stock pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and
transfers of all or substantially all of the property and assets of the
Company or any of its Restricted Subsidiaries; and
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(7) the cancellation or retirement of CBI Subordinated Notes held by a
Restricted Subsidiary of the Company.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the second
preceding paragraph, amounts expended pursuant to clauses (1), (4), (5) and (6)
of the immediately preceding paragraph shall be included in such calculation. No
issuance and sale of Qualified Capital Stock pursuant to clause (2) or (3) of
the immediately preceding paragraph shall increase the Restricted Payments
Basket, except to the extent the proceeds thereof exceed the amounts used to
effect the transactions described therein.
H.Section 4.8. Limitation on Dividend and Other Payment Restrictions
Affecting SUBSIDIARIES.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any such Restricted Subsidiary of the Company to:
(1) pay dividends or make any other distributions on or in respect of
its Capital Stock;
(2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
(3) transfer any of its property or assets to the Company or any other
Restricted Subsidiary of the Company,
except for such encumbrances or restrictions existing under or by reason of:
(a) applicable law;
(b) this Indenture, the Notes and the Guarantees;
(c) in the case of clause (3) above, (A) agreements or instruments
that restrict in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (B) any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of the
Company, or any Restricted Subsidiary not otherwise prohibited by this
Indenture or (C) provisions arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, that do not, individually or in
the aggregate, detract from the value of property or assets of the Company
or any of its Restricted Subsidiaries in any manner material to the Company
or any of its Restricted Subsidiaries;
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(d) any agreement or instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person so acquired;
(e) agreements or instruments existing on the Issue Date to the extent
and in the manner such encumbrances and restrictions are in effect on the
Issue Date, including the Credit Agreement;
(f) an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, any Restricted Subsidiary of the Company or
provisions with respect to the disposition or distribution of assets or
property in joint venture agreements or other similar agreements or
arrangements entered into in the ordinary course of business;
(g) provisions in agreements or instruments which prohibit the payment
of dividends or the making of other distributions with respect to any class
of Capital Stock of a Person other than on a PRO RATA basis;
(h) Purchase Money Indebtedness incurred in compliance with Section
4.9 hereof that impose restrictions of the nature described in clause (3)
above on the property acquired;
(i) restrictions on cash or other deposits imposed by customers under
contracts or other arrangements entered into or agreed to in the ordinary
course of business;
(j) restrictions on the ability of any Foreign Restricted Subsidiary
to make dividends or other distributions resulting from the operation of
reasonable financial covenants contained in documentation governing
Indebtedness of such Subsidiary permitted under this Indenture; or
(k) an agreement governing Indebtedness incurred to Refinance the
Indebtedness issued, assumed or incurred pursuant to an agreement referred
to in clause (b), (d), (e), (h) or (j) above; PROVIDED, HOWEVER, that the
provisions relating to such encumbrance or restriction contained in any
such Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such
clause (b), (d), (e), (h) or (j).
I.Section 4.9. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
1.(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "INCUR") any Indebtedness
(other than Permitted Indebtedness); PROVIDED, HOWEVER, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company or any
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of its Restricted Subsidiaries that is or, upon such incurrence, becomes a
Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) and any Restricted Subsidiary of the Company that is not or will
not, upon such incurrence, become a Guarantor may incur Acquired Indebtedness,
in each case if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio
of the Company is (i) greater than 2.00 to 1.0 if such Indebtedness is incurred
on or before July 1, 2004 or (ii) greater than 2.25 to 1.0 if such Indebtedness
is incurred after July 1, 2004.
For purposes of determining compliance with this covenant, (i)
Acquired Indebtedness shall be deemed to have been incurred by the Company or
one of its Restricted Subsidiaries, as the case may be, at the time an acquired
Person becomes such a Restricted Subsidiary (or is merged into the Company or
such a Restricted Subsidiary) or at the time of the acquisition of assets, as
the case may be and (ii) the maximum amount of Indebtedness that the Company and
its Restricted Subsidiaries may incur pursuant to this covenant shall not be
deemed to be exceeded, with respect to any outstanding Indebtedness, due solely
to the result of fluctuations in the exchange rates of currencies.
2.(b) The Company will not, and will not permit any Guarantor to,
directly or indirectly, incur any Indebtedness which by its terms (or by the
terms of any agreement governing such Indebtedness) is subordinated in right of
payment to any other Indebtedness of the Company or such Guarantor, as the case
may be, unless such Indebtedness is also by its terms (or by the terms of any
agreement governing such Indebtedness) made expressly subordinate to the Notes
or the applicable Guarantee, as the case may be, to the same extent and in the
same manner as such Indebtedness is subordinated to other Indebtedness of the
Company or such Guarantor, as the case may be.
J.Section 4.10. LIMITATION ON ASSET SALES.
(A) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of
(as determined in good faith by the Company's Board of Directors);
(2) at least 75% of the consideration received by the Company or the
Restricted Subsidiary, as the case may be, from such Asset Sale shall be in
the form of cash or Cash Equivalents and is received at the time of such
disposition; PROVIDED that (a) the amount of any Indebtedness or other
liabilities of the Company or any such Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes) that are
assumed by the transferee of any such assets and (b) the fair market value
of any marketable securities, currencies, notes
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or other obligations received by the Company or any such Restricted
Subsidiary in exchange for any such assets that are promptly converted into
cash or Cash Equivalents within 30 days after receipt thereof shall be
deemed to be cash for purposes of this provision; and
(3) upon the consummation of an Asset Sale, the Company shall, subject
to paragraph (B) below, apply, or cause such Restricted Subsidiary to
apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of
receipt thereof either:
(a) to repay or prepay any Indebtedness under the Credit
Agreement and, in the case of any such Indebtedness under any
revolving credit facility, effect a permanent reduction in the
availability under such revolving credit facility; PROVIDED that the
Net Cash Proceeds received by the Company or any of its Restricted
Subsidiaries from one or more Sale and Leaseback Transactions (the
"Excluded Sale and Leaseback Transactions") may be used to repay or
prepay Indebtedness under any such revolving credit facility without
effecting a permanent reduction in the availability under such
revolving credit facility to the extent that the aggregate proceeds
received from all such Excluded Sale and Leaseback Transactions does
not exceed $16.0 million;
(b) to make an Investment in properties and assets that replace
the properties and assets that were the subject of such Asset Sale or
in properties and assets that will be used, or Capital Stock of a
Person engaged, in a Permitted Business ("REPLACEMENT ASSETS"); and/or
(c) a combination of prepayment and investment permitted by the
foregoing clauses (3)(a) and (3)(b).
(B) On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (3)(a), (3)(b) and (3)(c) of paragraph (A) above (each, a "NET
PROCEEDS OFFER TRIGGER DATE"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (3)(a), (3)(b) and (3)(c) of paragraph (A) above (each a
"NET PROCEEDS OFFER AMOUNT") shall be applied by the Company or such Restricted
Subsidiary to make an offer to purchase (the "NET PROCEEDS OFFER") to all
Holders and, to the extent required by the terms of any Pari Passu Indebtedness,
an offer to purchase to all holders of such Pari Passu Indebtedness, on a
Purchase Date not less than 30 nor more than 45 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders (and holders of any such Pari
Passu Indebtedness) on a PRO RATA basis, that amount of Notes (and Pari Passu
Indebtedness) equal to the Net Proceeds Offer Amount at a price equal to 100% of
the principal amount of the Notes (and Pari Passu Indebtedness) to be purchased,
plus accrued and unpaid interest thereon, if any, to the date of purchase.
(C) If at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to
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any such non-cash consideration), then such conversion or disposition shall be
deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this Section 4.10.
(D) The Company may defer the Net Proceeds Offer until there is an
aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0
million, shall be applied as required pursuant to this Section 4.10).
(E) In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.1, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Restricted Subsidiaries not so transferred for purposes of this covenant, and
shall comply with the provisions of this covenant with respect to such deemed
sale as if it were an Asset Sale. In addition, the fair market value of such
properties and assets of the Company or its Restricted Subsidiaries deemed to be
sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.
(F) To the extent that the aggregate value of Notes tendered pursuant
to such Net Proceeds Offer is less than the Net Proceeds Offer Amount, the
Company may use the remaining amounts for general corporate purposes. Upon
completion of such Net Proceeds Offer, the Net Proceeds Offer Amount will be
reset to zero.
(G) Notwithstanding paragraphs (A) and (B) of this Section 4.10, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent that:
(i) at least 75% of the consideration for such Asset Sale constitutes
Replacement Assets; and
(ii) such Asset Sale is for fair market value;
PROVIDED that any cash or Cash Equivalents received by the Company or any of its
Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds subject to
the provisions of paragraphs (A) and (B) of this Section 4.10.
(H) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the extent
such laws and regulations are applicable in connection with the repurchase of
Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.10, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.10 by virtue
thereof.
K.Section 4.11. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
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The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "AFFILIATE
TRANSACTION"), other than (x) Affiliate Transactions permitted under the third
paragraph of this covenant and (y) Affiliate Transactions on terms that are no
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2.0 million
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $5.0 million, the Company or such
Restricted Subsidiary, as the case may be, shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Restricted
Subsidiary, as the case may be, from a financial point of view, issued by an
Independent Financial Advisor and file the same with the Trustee.
The restrictions set forth in the first paragraph of this Section 4.11
shall not apply to:
(1) reasonable fees and compensation paid to and indemnity and
reimbursement provided on behalf of, officers, directors, employees or
consultants of the Company or any Restricted Subsidiary of the Company as
determined in good faith by the Company's Board of Directors or senior
management;
(2) transactions exclusively between or among the Company and any of
its Wholly Owned Restricted Subsidiaries or exclusively between or among
such Wholly Owned Restricted Subsidiaries, provided such transactions are
not otherwise prohibited by this Indenture;
(3) any agreement (other than the Management Agreement) as in effect
as of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders, taken as a whole, in
any material respect than the original agreement as in effect on the Issue
Date;
(4) the payment to ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc. of management fees pursuant to
and in accordance with the Management Agreement not to exceed the amount
per year specified in the Management Agreement; PROVIDED that, in the event
the full amount thereof is not paid in any year, the deficiency may
cumulate and, provided that no Default or Event of Default shall
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have occurred and be continuing at the time of payment, may be paid
together with the then current management fee for such subsequent year;
(5) Restricted Payments permitted by this Indenture;
(6) any employment, stock option, stock repurchase, employee benefit,
compensation, business expense reimbursement or other employment-related
agreements, arrangements or plans entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(7) loans or advances to employees or directors in the ordinary course
of business of the Company or any of its Restricted Subsidiaries to the
extent permitted under this Indenture;
(8) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which it files a
consolidated tax return or with which the Company is part of a consolidated
group for tax purposes;
(9) any Affiliate Transaction which constitutes a Permitted
Investment;
(10) any transaction on arm's length terms with non-Affiliates that
become Affiliates as a result of such transaction; and
(11) the issuance of Qualified Capital Stock of the Company or any of
its Restricted Subsidiaries.
L.Section 4.12. LIMITATION ON LIENS.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens (other than Permitted Liens) of any kind
against or upon any property or assets of the Company or any of its Restricted
Subsidiaries whether owned on the Issue Date or acquired after the Issue Date,
or any proceeds therefrom, or assign or otherwise convey any right to receive
income or profits therefrom unless:
(1) in the case of Liens securing Subordinated Indebtedness, the Notes
are secured by a Lien on such property, assets or proceeds that is senior
in priority to such Liens; and
(2) in all other cases, the Notes are equally and ratably secured by a
Lien on such property, assets, proceeds, income or profit.
In the event that all Liens, the existence of any of which gives rise
to a Lien securing the Notes pursuant to the provisions of this covenant, cease
to exist, the Lien securing the Notes
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required by this covenant shall automatically be released and the Trustee shall
execute appropriate documentation.
M.Section 4.13. CONTINUED EXISTENCE.
Subject to Article V hereof, each of the Company and the Guarantors
shall do or cause to be done all things necessary to preserve and keep in full
force and effect (i) its corporate or other existence in accordance with the
organizational documents (as the same may be amended from time to time) of the
Company or such Guarantor and (ii) the material rights (charter and statutory),
licenses and franchises of the Company or such Guarantor, except to the extent
that the applicable Board of Directors determines in good faith that the
preservation of such right, license or franchise is no longer necessary or
desirable in the conduct of the business of the Company or such Guarantor and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
N.Section 4.14. INSURANCE MATTERS.
The Company shall provide or cause to be provided, for itself and each
of its Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in the reasonable, good faith opinion of the
Company, are adequate and appropriate for the conduct of the business of the
Company and its Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be either (i) consistent with past practices of the Company or
the applicable Subsidiary or (ii) customary, in the reasonable, good faith
opinion of the Company, for corporations similarly situated in the industry,
unless the failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole.
O.Section 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes (a "CHANGE OF
CONTROL OFFER") at a Purchase Price in cash equal to 101% of the aggregate
principal amount thereof, together with accrued and unpaid interest and
Additional Interest, if any, thereon to the Purchase Date. The Change of Control
Offer shall be made in compliance with the applicable procedures set forth in
Article III hereof and shall include all instructions and materials necessary to
enable Holders to tender their Notes.
The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
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The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.15, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.15 by virtue
hereof.
P.Section 4.16. ADDITIONAL SUBSIDIARY GUARANTEES.
1.If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Material Domestic Restricted Subsidiary that
is not a Guarantor, or if the Company or any of its Restricted Subsidiaries
shall organize, acquire or otherwise invest in another Material Domestic
Restricted Subsidiary, then such transferee or acquired or other Restricted
Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes and this Indenture on the terms set forth in
this Indenture; and
(2) deliver to the Trustee an opinion of counsel that such
supplemental indenture has been duly authorized, executed and delivered by
such Restricted Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Restricted Subsidiary.
Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of
this Indenture.
Q.Section 4.17. CONDUCT OF BUSINESS.
The Company and its Restricted Subsidiaries will not engage in any
businesses which is not a Permitted Business.
R.Section 4.18. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
S.Section 4.19. LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES.
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The Company will not permit any of its Restricted Subsidiaries that
are not Guarantors to issue any Preferred Stock (other than to the Company or to
a Wholly Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company) to own
any Preferred Stock of any Restricted Subsidiary of the Company that is not a
Guarantor.
V.ARTICLE V.
SUCCESSORS
A.Section 5.1. MERGER, CONSOLIDATION AND OR SALE OF ASSETS.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless:
(1) either:
(a) the Company shall be the surviving or continuing corporation;
or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the
Company's Restricted Subsidiaries substantially as an entirety (the
"SURVIVING ENTITY"):
(x) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the
District of Columbia; and
(y) shall expressly assume, by supplemental indenture (in
form and substance reasonably satisfactory to the Trustee in all
respects), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and
interest on all of the Notes and the performance of every
covenant of the Notes, this Indenture and the Registration Rights
Agreement on the part of the Company to be performed or observed;
(2) except in the case of a consolidation or merger of the Company
with or into a Wholly Owned Restricted Subsidiary, or a sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially
all of the Company's assets to a Wholly Owned Restricted Subsidiary,
immediately after giving effect to such transaction and the assumption
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contemplated by clause(1)(b)(y) above (including giving effect to any
Indebtedness (including Acquired Indebtedness) incurred or anticipated to
be incurred in connection with or in respect of such transaction), the
Company or such Surviving Entity, as the case may be, (a) shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth
of the Company immediately prior to such transaction and (b) shall be able
to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.9 hereof;
(3) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (1)(b)(y) above
(including, without limitation, giving effect to any Indebtedness(including
Acquired Indebtedness) incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and
(4) the Company or the Surviving Entity shall have delivered to the
Trustee an officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have
been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company and the Company, if surviving, will be automatically discharged from
all of its Obligations under this Indenture and the Notes so long as the
requirements set forth above are satisfied.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the Surviving
Entity formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Notes with the same effect as if such Surviving Entity
had been named as such.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.10)
will not, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or any other
Guarantor unless:
(1) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or
other disposition shall have been made is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia;
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(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor under the Guarantee, this Indenture and the
Registration Rights Agreement;
(3) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and the use of
any net proceeds therefrom on a PRO FORMA basis, the Company could satisfy
the provisions of clause (2) of the first paragraph of this Section 5.1.
Any merger or consolidation, or sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the property or
assets, (a) of a Guarantor with and into the Company (with the Company being the
surviving entity) or another Guarantor that is a Wholly Owned Restricted
Subsidiary of the Company or (b) of the Company with an Affiliate incorporated
solely for the purpose of reincorporating the Company in another jurisdiction in
the United States or any state thereof or the District of Columbia, need only
comply with clause (4) of the first paragraph of this Section 5.1.
B.Section 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1 hereof, the Surviving Entity shall succeed to and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such Surviving Entity had been named
as the Company herein; PROVIDED, HOWEVER, that the predecessor Company shall not
be relieved from the obligation to pay the principal, Purchase Price or
Redemption Price of or interest or Additional Interest, if any, on the Notes
except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.1 hereof.
VI.ARTICLE VI.
DEFAULTS AND REMEDIES
A.Section 6.1. EVENTS OF DEFAULT.
Each of the following constitutes an "EVENT OF DEFAULT":
(a) the failure to pay interest on any Note when the same becomes due
and payable and the default continues for a period of 30 days;
(b) the failure to pay the principal of any Note, when such principal
becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer);
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(c) a default in the observance or performance of any other covenant
or agreement contained herein which default continues for a period of 45
days after the Company receives written notice specifying the default (and
demanding that such default be remedied and stating that such notice is a
"Notice of Default") from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes (except in the case of a default
with respect to Section 5.1 hereof, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
(d) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary of the
Company, or the acceleration of the final stated maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $5.0 million or more at any time and such failure
shall not have been cured or waived within 20 days thereof;
(e) one or more judgments in an aggregate amount in excess of $5.0
million (net of any insurance or indemnity payments actually received in
respect thereof prior to or within 60 days from the entry thereof, or to be
received in respect thereof in the event any appeal thereof shall be
unsuccessful) shall have been rendered against the Company or any of its
Restricted Subsidiaries and such judgments shall remain undischarged,
unpaid or unstayed for a period of 60 consecutive days after such judgment
or judgments become final and non-appealable;
(f) the Company or any Significant Subsidiary of the Company:
(i) commences a voluntary case under any Bankruptcy Law,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian or receiver of
it or for all or substantially, all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief in an involuntary case against the Company or
any Significant Subsidiary of the Company;
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(ii) appoints a custodian or receiver of the Company or any
Significant Subsidiary or for all or substantially all of the property
of any of the foregoing;
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(h) any Guarantee of a Significant Subsidiary ceases to be in full
force and effect or any Guarantee of a Significant Subsidiary is declared
to be null and void and unenforceable or any Guarantee of a Significant
Subsidiary is found to be invalid or any Guarantor that is a Significant
Subsidiary denies its liability in writing under its Guarantee (other than
by reason of release of a Guarantor in accordance with the terms of this
Indenture).
B.Section 6.2. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.1 hereof with respect to the Company shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes by written notice to the Company (and the
Trustee, if such notice is given by such Holders) may declare the principal of
and accrued and unpaid interest on the Notes to be due and payable immediately,
which notice shall specify the respective Events of Default and that it is a
"NOTICE OF ACCELERATION". Upon any such declaration, the entire principal amount
of, and accrued and unpaid interest and Additional Interest, if any, on the
Notes shall become immediately due and payable.
Notwithstanding the foregoing, if an Event of Default specified in
clause (f) or (g) of Section 6.1 hereof occurs with respect to the Company, all
outstanding Notes shall be due and payable immediately without further action or
notice.
The Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by written notice to the Company and the Trustee
may, on behalf of the Holders of all of the Notes, rescind an acceleration and
its consequences:
(1) if the rescission would not conflict with any judgment or decree;
(2) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
the acceleration;
(3) to the extent the payment of such interest is lawful, if interest
on overdue installments of interest and overdue principal, which has become
due otherwise than by such declaration of acceleration, has been paid; and
(4) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances.
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No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
C.Section 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest or Additional Interest, if any, 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, and any recovery
or judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Notes. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
D.Section 6.4. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Notes may waive
any existing or past Default or Event of Default under this Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Notes. 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.
E.Section 6.5. 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 applicable law or this Indenture that the Trustee reasonably
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may subject the Trustee to personal liability and shall be entitled to the
benefit of Sections 7.1(c)(iii) and (e) hereof.
F.Section 6.6. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
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(c) such Holder or Holders of Notes offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
G.Section 6.7. 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 of, or premium, if any,
interest or Additional Interest, if any, on the Note, on or after the respective
due dates thereon (including in connection with an offer to repurchase), 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 written consent of such
Holder.
H.Section 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.l(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Additional Interest, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and Additional Interest, if any, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expense, disbursements and advances of the Trustee, its
agents and counsel.
I.Section 6.9. [INTENTIONALLY OMITTED].
J.Section 6.10. 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 (including accountants,
experts or such other processionals as the Trustee deems necessary, advisable or
appropriate) 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
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counsel, and any other amounts due the Trustee under Section 7.7 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 7.7 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.
K.Section 6.11. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
Section 7.7 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, Purchase Price, Redemption Price and Additional Interest, if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
Purchase Price, Redemption Price and Additional Interest, if any, and
interest, respectively; and
THIRD: to the Company, the Guarantors or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a special record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.11.
L.Section 6.12. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
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VII.ARTICLE VII.
TRUSTEE
A.Section 7.1. DUTIES OF TRUSTEE.
1.(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
2.(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA 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 or the TIA against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, without investigation, as to the truth or the statements
and the correctness of the opinions expressed therein, upon and statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform on their face to the requirements of this Indenture.
3.(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 hereof.
4.(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to this
Section 7.1.
5.(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, pursuant to the
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provisions of this Indenture, including, without limitation, Section 6.5 hereof,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense which might be
incurred by it in compliance with such request or direction.
6.(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
B.Section 7.2. RIGHTS OF TRUSTEE.
1.(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
2.(b) Before the Trustee acts or refrain from acting, it shall
require an Officer's Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its own selection and the written advice of such counsel
and Opinions of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
3.(c) The Trustee may act through its attorneys, accountants, experts
and such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for the misconduct or negligence of any
attorney, accountant, expert or other such professional appointed with due care.
4.(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
5.(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficiently
evidenced by a written order signed by two Officers of the Company.
6.(f) The Trustee shall not be charged with knowledge of any Default
or Event of Default under Section 6.1 hereof (other than under Section 6.1(a)
(subject to the following sentence) or Section 6.1(b) hereof) unless either (i)
a Responsible Officer shall have actual knowledge thereof, or (ii) the Trustee
shall have received notice thereof in accordance with Section 13.2 hereof from
the Company or any Holder of the Notes. The Trustee shall not
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be charged with knowledge of the Company's obligation to pay Additional
Interest, or the cessation of such obligation, unless the Trustee receives
written notice thereof from the Company or any Holder.
7.(g) The rights, privileges, protections, immunities and benefits
given to the Trustee, 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 each agent, custodian and other Person employed
to act hereunder.
(h) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person specified as so
authorized in any such certificate previously delivered and not superseded.
C.Section 7.3. 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 within the meaning of the TIA it must eliminate such conflict within 90
days, apply (subject to the consent of the Company) to the Commission for
permission to continue as trustee or 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.
D.Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
E.Section 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default in payment on
any Note (including the failure to make a mandatory repurchase pursuant hereto),
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.
F.Section 7.6. REPORTS BY TRUSTEE TO HOLDER OF THE NOTES.
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Within 60 days after each February 15 beginning with the February 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.
G.Section 7.7. COMPENSATION, REIMBURSEMENT AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and the rendering by it of the
services required hereunder as shall be agreed upon in writing by the Company
and the Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by or on behalf of it in addition to the compensation
for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's attorneys, accountants, experts and
such other professionals as the Trustee deems necessary, advisable or
appropriate.
The Company shall indemnify the Trustee and any predecessor Trustee
against any and all losses, liabilities, claims, damages or expenses, including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee), incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Indenture (including its duties under
Section 9.6 hereof), including the costs and expenses of enforcing this
Indenture or any Guarantee against the Company or a Guarantor (including this
Section 7.7) and defending itself against or investigating any claim (whether
asserted by the Company, any Guarantor, any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence or willful misconduct. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend any claim or threatened
claim asserted against the Trustee, and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.7 shall survive
the resignation or removal of the Trustee, the satisfaction and discharge of
this Indenture and the termination of this Indenture.
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To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, Redemption
Price or Purchase Price of or Additional Interest, if any, or interest on,
particular Notes. Such Lien shall survive the resignation or removal of the
Trustee, the satisfaction and discharge of this Indenture and the termination of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) 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.
H.Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian, receiver or public officer takes charge of the
Trustee or its property for the purpose of rehabilitation, conversation or
liquidation; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the date on which 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.
If a successor Trustee does not take office within 30 days after the
retiring trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction, in the case of the
Trustee, at the expense of the Company, for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a bona fide holder of a Note or Notes for at least six months, fails to
comply with Section 7.10, such Holder of a
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Note may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of its succession to
Holder of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.
I.Section 7.9. 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
that is eligible under Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee.
J.Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof (including the District of Columbia) that is authorized
under such laws to exercise corporate trust 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 shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
K.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.
VIII.ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
A.Section 8.1. 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 8.2 or 8.3 hereof be
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applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article VIII.
B.Section ▇.▇.▇▇▇▇▇ DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to the "outstanding" only
for the purposes of Section 8.5 hereof and the other Sections of this Indenture
referred to in clauses (a) through (d) below, and to have satisfied all their
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder:
(a) the rights of Holders to receive payments in respect of the
principal of, premium, if any, and interest on the Notes when such payments
are due;
(b) the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for payments;
(c) the rights, powers, trust, duties and immunities of the Trustee
and the Company's obligations in connection therewith; and
(d) the Legal Defeasance provisions of this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise
its option under this Section 8.2, notwithstanding the prior exercise of its
option under Section 8.3 hereof.
C.Section 8.3.COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Sections 3.9, 3.10, 4.5, 4.7
through 4.12 and 4.14 through 4.20 hereof, both inclusive, and Section 5.1(2)
with respect to the outstanding Notes on and after the date the conditions set
forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any
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term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document, and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.1 hereof, but, except as
specified above the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.1
hereof of the option applicable to this Section 8.3, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, Sections 6.1(c) through
6.1(h) hereof shall not constitute Events of Default.
D.Section 8.4.CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following are the conditions precedent to the application of
either Section 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders cash in U.S. dollars, U.S. 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 selected by the Company, to pay the principal of,
premium, if any, and interest on the Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be;
(2) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that:
(a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
(b) since the date of this Indenture, there has been a change in
the applicable federal income tax law,
in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance
and 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 Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
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(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of deposit (other than a Default or
Event of Default arising in connection with the borrowing of funds to fund
the deposit referred to in clause (1) above);
(5) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(6) the Company shall have delivered to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(7) the Company shall have delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(8) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that, assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the date of
deposit and that no Holder is an insider of the Company, after the 91st day
following the date of deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally.
Notwithstanding the foregoing, the opinion of counsel required by
clause (2) above with respect to a Legal Defeasance need not be delivered if all
Notes not theretofore delivered to the Trustee for cancellation (1) have become
due and payable or (2) will become due and payable on the maturity date within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company.
E. Section 8.5. DEPOSITED MONEY AND U.S. GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all money and U.S. Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5 only, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company) as the Trustee may determine,
to the Holders of such Notes of all sums due and to become due thereon in
respect of principal or Redemption Price of, and Additional Interest, if any,
interest on,
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the Notes, that such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or U.S. Government
Securities deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Securities held by it as provided in
Section 8.4 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
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
F.Section 8.6.REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal, Redemption Price or
Purchase Price of, or Additional Interest, if any, or interest on any Note and
remaining unclaimed for two years after such amount has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Company for payment thereof as a general creditor,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, at the expense of the Company, may cause to
be published once, in The New York Times and The Wall Street Journal (national
editions), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days after the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
G.Section 8.7.REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Securities in accordance with Section 8.2 or 8.3
hereof, as the case may be, by reason of any order of judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Guarantors under this
Indenture, and the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.2 or 8.3 hereof, as the case may be; PROVIDED,
HOWEVER, that, if the Company makes any payment with respect to any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
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IX. ARTICLE IX.
AMENDMENT, SUPPLEMENT AND WAIVER
A.Section 9.1.WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.2 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency so long as such
changes do not, in the opinion of the Trustee, adversely affect the rights
of any of the Holders in any material respect.
(b) to provide for uncertificated notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation or sale of
all or substantially all of the Company's assets pursuant to Article V
hereof;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA; or
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Notes.
Upon the request of the Company, accompanied by a resolution of the
Board (evidenced by an Officers' Certificate) authorizing the execution of any
such amended or supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 7.2 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
B. Section 9.2. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for the Notes),
and, subject to Sections 6.2, 6.4 and 6.7 hereof, any existing Default or Event
of Default or compliance with any provision of this Indenture or the Notes may
be waived with the consent of the
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Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes).
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes at maturity whose Holders
must consent to an amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or reduce the redemption price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Note or Notes on or after the due date thereof or to bring
suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;
(6) after the Company's obligation to purchase Notes arises hereunder,
amend, change or modify in any material respect the obligation of the
Company to make and consummate a Change of Control Offer in the event of a
Change of Control or make and consummate a Net Proceeds Offer with respect
to any Asset Sale that has been consummated or, after such Change of
Control has occurred or such Asset Sale has been consummated, modify any of
the provisions or definitions with respect thereto;
(7) modify or change any provision of this Indenture or the related
definitions affecting the ranking of the Notes or any Guarantee in a manner
which adversely affects the Holders; or
(8) release any Guarantor that is a Significant Subsidiary from any of
its obligations under its Guarantee or this Indenture otherwise than in
accordance with the terms of this Indenture.
Notwithstanding the foregoing, the consent of at least 66-2/3% in
principal amount of the then outstanding Notes issued under this Indenture shall
be required (a) to eliminate any covenant set forth in Article IV or Article V
hereof or any of the related definitions or (b) to amend, modify or waive one or
more provisions in any such covenant or definition that would (individually or
if aggregated with other amendments, modifications or waivers previously or
concurrently made or given) effectively eliminate the protections afforded to
the Holders by such covenant, in each case (a)
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or (b), where such elimination, amendment, modification or waiver would
otherwise require the consent of a majority in principal amount of the then
outstanding Notes issued under this Indenture.
Upon the written request of the Company accompanied by a resolution of
the Board (evidenced by an Officers' Certificate) 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 an Officers' Certificate and an
opinion of counsel, the Trustee shall join with the Company in the execution of
such amended or supplemental indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall 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, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
C.Section 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental indenture that complies with the TIA as
then in effect.
D.Section 9.4. 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 therefore binds every Holder.
E.Section 9.5. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
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Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
F.Section 9.6. TRUSTEE TO SIGN AMENDMENT, ETC.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article IX if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
approves such amendment or supplemental indenture. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive, in addition to
the documents required by Sections 13.4 and 13.5 hereof, and, subject to Section
7.1, shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that (i) the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture, (ii) no
Event of Default shall occur as a result of the execution of such Officers'
Certificate or the delivery of such Opinion of Counsel and (iii) the amended or
supplemental indenture complies with the terms of this Indenture.
X.ARTICLE X.
[intentionally omitted]
XI.ARTICLE XI.
GUARANTEE
A.Section 11.1. UNCONDITIONAL GUARANTEE.
Each Guarantor hereby unconditionally guarantees (such guarantee to be
referred to herein as a "GUARANTEE"), on a senior basis jointly and severally,
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 interest on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest, to the extent lawful,
of the Notes 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 of any such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 11.3. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment
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against the Company, and action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and in this Guarantee. If any Holder or
the Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of this 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 acceleration of such obligations
as provided in Article VI, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of this
Guarantee.
B.Section 11.2. SEVERABILITY.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
C.Section 11.3. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.5, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
D.Section 11.4. RELEASE OF GUARANTOR.
1.(a) The Guarantee of a Guarantor will be automatically and
unconditionally released without any action on the part of the Trustee or the
Holders of the Notes: (1) in connection with any sale or other disposition of
all or substantially all of the assets of that Guarantor (including, without
limitation, by way of merger or consolidation), if
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the Company applies the Net Cash Proceeds of that sale or other disposition in
accordance with the applicable provisions of this Indenture; (2) in connection
with any sale of all of the Capital Stock of that Guarantor, if the Company
applies the Net Cash Proceeds of that sale in accordance with the applicable
provisions of this Indenture; (3) if the Company designates that Guarantor as an
Unrestricted Subsidiary in accordance with the applicable provisions of this
Indenture; or (4) upon the payment in full of the Notes.
In addition, concurrently with any Legal Defeasance or Covenant
Defeasance, the Guarantors shall be released from all of their Obligations under
their respective applicable Guarantees.
2.(b) The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate and Opinion of Counsel certifying as to the compliance
with this Section 11.4.
E.Section 11.5. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, INTER SE, that in the event any payment or
distribution is made by any Guarantor (a "FUNDING GUARANTOR") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a PRO RATA amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Securities or any other
Guarantor's obligations with respect to the Guarantee. "ADJUSTED NET ASSETS" of
such Guarantor at any date shall mean the lesser of the amount by which (x) the
fair value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date), but excluding liabilities under the Guarantee, of such Guarantor at such
date and (y) the present fair salable value of the assets of such Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), excluding debt in
respect of the Guarantee of such Guarantor, as they become absolute and matured.
F.Section 11.6. WAIVER OF SUBROGATION.
Until all Obligations are paid in full, each Guarantor hereby
irrevocably waives any claims or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of such Guarantor's obligations under the Guarantee and this
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
the Notes shall not have been paid in full, such amount shall have been
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deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Holders, and shall, forthwith be paid to the Trustee for
the benefit of such Holders to be credited and applied upon the Notes, whether
matured or unmatured, in accordance with the terms of this Indenture. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 11.6 is knowingly made in contemplation of such
benefits.
G.Section 11.7. EXECUTION OF GUARANTEE.
To evidence their guarantee to the Holders set forth in this Article
XI, the Guarantors hereby agree to execute the Guarantee in substantially the
form attached hereto as Exhibit C, which shall be endorsed on each Note ordered
to be authenticated and delivered by the Trustee. Each Guarantor hereby agrees
that its Guarantee set forth in this Article XI shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Guarantee. Each such Guarantee shall be signed on behalf of each Guarantor by
one of its authorized Officers prior to the authentication of the Note on which
it is endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of such Guarantor. Such signatures upon the Guarantee may be
by manual or facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantee, and in case any such officer who shall
have signed the Guarantee shall cease to be such officer before the Note on
which such Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Note nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Guarantee had not ceased to be such officer of the Guarantor.
H.Section 11.8. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Guarantor 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 or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each such
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
XII.ARTICLE XII.
SATISFACTION AND DISCHARGE
A.Section 12.1. SATISFACTION AND DISCHARGE.
This Indenture will be discharged and will cease to be of further
effect (except as set forth below) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when:
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(1) either:
(a) all the Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid as
provided in Section 2.7 and Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation; or
(b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds
in an amount sufficient to pay and discharge the entire Indebtedness
on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the
Notes to the date of deposit together with irrevocable instructions
from the Company directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be;
(2) the Company has paid all other sums payable under this Indenture
by the Company; and
(3) the Company has delivered to the Trustee an officers' certificate
and an opinion of counsel stating that all conditions precedent under this
Indenture relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 7.7, 7.8, 13.2, 13.3
and 13.4, and the Trustee's and Paying Agent's obligations in Section 12.2 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Section 7.7 shall survive.
B.Section 12.2. APPLICATION OF TRUST.
All money deposited with the Trustee pursuant to Section 12.1 shall be
held in trust and, at the written direction of the Company, be invested prior to
maturity in U.S. Government Securities, and applied by the Trustee in accordance
with the provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any) and interest
for the payment of which money has been deposited with the Trustee; but such
money need not be segregated from other funds except to the extent required by
law.
XIII.ARTICLE XIII.
MISCELLANEOUS
A.Section 13.1. TRUST INDENTURE ACT CONTROLS.
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If any provision hereof limits, qualifies or conflicts with a
provision of the TIA or another provision that would be required or deemed under
such Act to be part of and govern this Indenture if this Indenture were subject
thereto, the latter provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
B.Section 13.2. NOTICES.
Any notice or communication by the Company or the Trustee to 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:
American Achievement Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
The Bank of New York
Attention: Corporate Trust Trustee Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
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acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the address
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
C.Section 13.3. 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).
D.Section 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company and/or any Guarantor to
the Trustee to take any action under this Indenture, the Company and/or any
Guarantor shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
E.Section 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
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(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
F.Section 13.6. 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.
G.Section 13.7. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. No past, present or future director, officer, employee,
incorporator, agent or stockholder or Affiliate of any of the Guarantors, as
such, shall have any liability for any obligations of the Guarantors under the
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes and
Guarantees by accepting a Note and a Guarantee waives and releases all such
liabilities. The waiver and release are part of the consideration for issuance
of the Notes and the Guarantees. Such waiver may not be effective to waive
liabilities under the federal securities law and it is the view of the
Commission that such a waiver is against public policy.
H.Section 13.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.
THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
-▇▇-
▇▇▇▇ ▇▇ ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE, THE GUARANTEES AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
THE AFORESAID COURTS. THE COMPANY AND EACH GUARANTOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY
AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
TRUSTEE OR ANY HOLDER OF THE NOTES TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY OR ANY GUARANTOR IN ANY OTHER JURISDICTION.
I.Section ▇▇.▇.▇▇ 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.
J.Section 13.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successors.
K.Section 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
L.Section 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
M.Section 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this Indenture
and shall in no way modify or restrict any of the terms or provisions hereof.
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N.Section 13.14. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all reasonable costs and expenses (including attorneys' fees for the Company,
the Trustee and the Holders of the Notes) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this
Indenture and the Notes and printing this Indenture and the Notes. The Trustee
shall be entitled to receive from the Company any such Officers' Certificates,
Opinions of Counsel or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the TIA.
[Signatures on following page]
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SIGNATURES
AMERICAN ACHIEVEMENT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Van ▇. ▇▇▇▇▇
---------------------------------------------
Name: Van ▇. ▇▇▇▇▇
Title: Vice President
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THE GUARANTORS
COMMEMORATIVE BRANDS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
CBI NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇▇ SENIOR HOLDINGS CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇▇ PUBLISHING COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
TP HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
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▇▇▇▇▇▇ PRODUCTION SERVICES, L.P.
By: ▇▇▇▇▇▇ Publishing Company,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive Officer
EDUCATIONAL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Bench
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Bench
Title: Chief Financial Officer
SCHEDULE A
Commemorative Brands, Inc.
CBI North America, Inc.
▇▇▇▇▇▇ Senior Holdings Corp.
▇▇▇▇▇▇ Publishing Company
TP Holding Corp.
▇▇▇▇▇▇ Production Services, L.P.
Educational Communications, Inc.
EXHIBIT A
FORM OF SERIES A NOTE
(Face of Note)
AMERICAN ACHIEVEMENT CORPORATION
11 5/8% SENIOR NOTE DUE 2007
[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO ANYONE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"),
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
NOTE RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO AMERICAN ACHIEVEMENT
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
----------
(1) To be included only if the Note is issued in global form.
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS
NOTE), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
AMERICAN ACHIEVEMENT CORPORATION SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND AMERICAN ACHIEVEMENT CORPORATION SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-2
AMERICAN ACHIEVEMENT CORPORATION
11 5/8% SENIOR NOTE DUE 2007
CUSIP No.
-----------------
No. $
------------- -------------------------
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
AMERICAN ACHIEVEMENT CORPORATION, a Delaware corporation (the
"COMPANY," which term includes any successor corporation under the indenture
hereinafter referred to ), for value received promises to pay to
____________________________________________________ or registered assigns, the
principal sum of _____________________ Dollars on January 1, 2007.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefits under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
[SEAL] Dated:
AMERICAN ACHIEVEMENT CORPORATION
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Name:
Title:
A-3
(Back of Note)
11 5/8% Senior Notes due 2007
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. The Company promises to pay interest on the principal
amount of this Note at the rate of 11 5/8% per annum from the date of original
issuance until maturity and shall pay the Additional Interest pursuant to
Section 4 of the Registration Rights Agreement referred below. The Company will
pay interest and Additional Notes semi-annually on January 1 and July 1 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 Note 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 1, 2002.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue payments of the principal,
Purchase Price and Redemption Price of this Note from time to time on demand at
a rate that is 1% per annum in excess of the rate then in effect; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional Interest, if
any, (without regard to any applicable grace periods) hereon 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) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the December 15 and
June 15 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. Any such installment of interest or Additional Interest, if any, not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such Interest Payment Date, and may be paid to the
registered Holders at the close of business on a special interest payment date
to be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered Holders not less than 10 days prior to
such special interest payment date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The Notes will be
payable as to principal, Redemption Price, Purchase Price, interest and
Additional Interest, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Additional 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, Redemption Price and Purchase Price
of, and interest and Additional Interest (if any) on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Trustee or the Paying Agent. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, 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 may act in any such capacity.
4. INDENTURE AND GUARANTEES. The Company issued $177 million in
aggregate principal amount of the Notes under an Indenture dated as of February
20, 2002 (the "INDENTURE") between the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. 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. The Notes are general obligations of the Company. Payment on each Note is
guaranteed on a senior basis, jointly and severally, by the Guarantors pursuant
to Article Eleven of the Indenture.
5. OPTIONAL REDEMPTION. The Company may redeem any or all of the Notes
at any time on or after January 1, 2005, upon not less than 30 nor more than 60
days' prior notice in amounts of $1,000 or an integral multiple thereof at the
Redemption Prices (expressed as a percentage of the principal amount) set forth
below, if redeemed during the 12-month period beginning January 1 of the years
indicated below:
YEAR REDEMPTION
PRICE
2005............................. 105.813%
2006............................. 102.906%
in each case together with accrued and unpaid interest and Additional Interest,
if any, to the Redemption Date.
If less than all the Notes are to be redeemed, the Trustee will select
the particular Notes or portions thereof to be redeemed by lot, PRO RATA or by
any other method the Trustee shall deem fair and reasonable.
6. SPECIAL REDEMPTION. In the event the Company completes one or more
Public Equity Offerings on or before January 1, 2005, the Company, at its
option, may use the net cash proceeds from any such Public Equity Offering to
redeem up to 35% of the original principal amount of the Notes (a "SPECIAL
REDEMPTION") at a Redemption Price of 111.625% of the principal amount, together
with accrued and unpaid interest and Additional Interest (if any), to the date
of redemption, PROVIDED, HOWEVER, that at least 65% of the original principal
amount of the Notes will remain outstanding immediately after each such
redemption; and PROVIDED, FURTHER, that each such redemption shall occur within
120 days after the date of the closing of the applicable Public Equity Offering.
If less than all the Notes are to be redeemed, the Trustee will select the
particular Notes or portions
A-5
thereof to be redeemed by lot, only on a PRO RATA basis or on as nearly a PRO
RATA basis as is practicable (subject to DTC procedures).
7. MANDATORY REDEMPTION. Except as set forth in Paragraph 9 below with
respect to repurchases of Notes in certain events, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
8. NOTICE OF REDEMPTION. Subject to the provisions of the Indenture, a
notice of redemption will be mailed at least 30 days but not more than 60 days
(or 45 days in the case of mandatory redemption) 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. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a Purchase
Price equal to 101% of the principal amount thereof PLUS accrued and unpaid
interest and Additional Interest, if any, to the date of repurchase, in
accordance with the procedures set forth in the Indenture. Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (3)(a), (3)(b) and (3)(c) of paragraph (A) of Section 4.10 of
the Indenture (each, a "NET PROCEEDS OFFER TRIGGER DATE"), such aggregate amount
of Net Cash Proceeds which have not been applied on or before such Net Proceeds
Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of
paragraph (A) of Section 4.10 of the Indenture (each, a "NET PROCEEDS OFFER
AMOUNT") shall be applied by the Company or such Restricted Subsidiary to make
an offer to purchase (the "NET PROCEEDS OFFER") to all Holders and, to the
extent required by the terms of such Pari Passu Indebtedness, an offer to
purchase to all holders of such Pari Passu Indebtedness, on a Purchase Date not
less than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders (and holders of any such Pari Passu Indebtedness)
on a PRO RATA basis, that amount of Notes (and Pari Passu Indebtedness) to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase. Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes and holders of Pari Passu Indebtedness properly tender such Indebtedness
in an amount exceeding the Net Proceeds Offer Amount, the tendered Notes and
Pari Passu Indebtedness will be purchased on a PRO RATA basis based on the
aggregate amounts of Notes and Pari Passu Indebtedness tendered (and the Trustee
shall select the tendered Notes of tendering Holders on a PRO RATA basis
A-6
based on the amount of Notes tendered). A Net Proceeds Offer shall remain open
for a period of 20 business days or such longer period as may be required by
law.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture and 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 any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture and 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 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, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Additional Interest, if any, on
the Notes; (ii) default in payment when due of principal, Redemption Price or
Purchase Price of the Notes when the same becomes due and payable at maturity,
upon redemption, repurchase or otherwise (including the failure to make a
payment to purchase Notes tendered pursuant to a Change of Control Offer or a
Net Proceeds Offer); (iii) failure by the Company to comply with any covenant
contained in the Indenture for 45 days after notice to the Company by the
Trustee or the Holders of at least 25% of the aggregate principal amount of the
Notes outstanding; (iv) default under certain other agreements relating to
Indebtedness of the Company which default (a) is caused by a failure to pay any
amount due at the stated maturity thereof or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a default for failure to pay
principal at final maturity or the maturity of which has been so accelerated,
aggregates $5.0 million or more and such failure shall not have been cured or
waived within 20 days thereof; (v) certain final judgments for the payment of
money that remain undischarged for a period of 60 days, PROVIDED that the
aggregate of all such
A-7
undischarged judgments exceeds $5.0 million; and (vi) certain events of
bankruptcy or insolvency with respect to the Company or any Significant
Subsidiary of the Company. 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 immediately.
Upon any such declaration, the entire principal amount of, and accrued and
unpaid interest and Additional Interest, if any, on the Notes shall become
immediately 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 payment on any Note) if it determines that withholding notice is in
their interest. The Holders of a majority in principal amount of the Notes may
waive any existing or past Default or Event of Default under the Indenture, and
its consequences, except a default in the payment of the principal of, or
interest on any Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. Subject to certain limitations, the
Trustee under the Indenture, in its individual or any other capacity, may become
owner or pledge of Notes and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
15. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts
to Minors Act).
18. DISCHARGE PRIOR TO MATURITY. If the Company deposits with the
Trustee or Paying Agent cash or U.S. Government Securities sufficient to pay the
principal or Redemption Price of, and interest and Additional Interest, if any,
on, the Notes to maturity or a specified Redemption Date and satisfies certain
conditions specified in the Indenture, the Company will be discharged from the
Indenture, except for certain Sections thereof.
A-8
19. GOVERNING LAW. The Indenture and Guarantees and this Note shall be
governed by and construed in accordance with the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the law of another jurisdiction would be required
thereby. Each of the Company and each Guarantor hereby irrevocably submits to
the jurisdiction of any New York state court sitting in the Borough of Manhattan
in the City of New York or any Federal court sitting in the Borough of Manhattan
in the City of New York in respect of any suit, action or proceeding arising out
of or relating to the Indenture and the Notes, and irrevocably accept for itself
and in respect of its property, generally and unconditionally, jurisdiction of
the aforesaid courts. Each of the Company and each Guarantor irrevocably waives,
to the fullest extent that it may effectively do so under applicable law, trial
by jury and any objection which it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Trustee or any Holder of the Notes to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Company or any Guarantor in any other jurisdiction.
20. 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 correctness or accuracy of such numbers either as printed on the Notes
or as contained in any notice of redemption or repurchase and reliance may be
placed only on the other identification numbers placed thereon.
21. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement, the Company will be obligated upon the occurrence of certain events
to consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Series A Note for the Company's 11 5/8% Senior
Notes due 2007, Series B, which have been registered under the Securities Act,
in like principal amount and having terms identical in all material respects as
the Series A Notes. The Holders shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
American Achievement Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
A-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name address and zip code)
and irrevocably appoint ________________________________________________________
agent 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 recognized signature guarantee
medallion program)
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Note purchased
by the Company pursuant to Section 4.10 ("NET PROCEEDS OFFER") or Section 4.15
("CHANGE OF CONTROL OFFER") of the Indenture, check the applicable boxes
/ / Net Proceeds Offer: / / Change of Control Offer:
in whole / / in whole / /
in part / / in part / /
Amount to be Amount to be
purchased: $___________ purchased: $_____________
Dated: Signature:
--------------- -----------------------------------
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:
--------------------------------------------------
(Participant in recognized signature guarantee
medallion program)
Social Security Number or
Taxpayer Identification Number:
--------------------------------------
A-11
EXHIBIT B
FORM OF SERIES B NOTE
(Face of Note)
AMERICAN ACHIEVEMENT CORPORATION
11 5/8% SENIOR NOTE DUE 2007
[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO ANYONE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](2)
----------
(2) To be included only if the Note is issued in global form.
AMERICAN ACHIEVEMENT CORPORATION
11 5/8% SENIOR NOTE DUE 2007
CUSIP No. _______________
No. ______________ $ _______________________
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
AMERICAN ACHIEVEMENT CORPORATION, a Delaware corporation (the
"COMPANY," which term includes any successor corporation under the indenture
hereinafter referred to ), for value received promises to pay to
____________________________________________________ or registered assigns, the
principal sum of _____________________ Dollars on January 1, 2007.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefits under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
[SEAL] Dated:
AMERICAN ACHIEVEMENT CORPORATION
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
This is one of the Notes referred
to in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
B-2
By:
-------------------------------------
Name:
Title:
B-3
(Back of Note)
11 5/8% Senior Notes due 2007
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. The Company promises to pay interest on the principal
amount of this Note at the rate of 11 5/8% per annum from the date of original
issuance until maturity. The Company will pay interest and Additional Interest
semi-annually on January 1 and July 1 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 Note 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 1, 2002. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue payments of the principal, Purchase Price and
Redemption Price of this Note from time to time on demand at a rate that is 1%
per annum in excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to any
applicable grace periods) hereon 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) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the December 15 and
June 15 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. Any such installment of interest or Additional Interest, if any, not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such Interest Payment Date, and may be paid to the
registered Holders at the close of business on a special interest payment date
to be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered Holders not less than 10 days prior to
such special interest payment date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The Notes will be
payable as to principal, Redemption Price, Purchase Price, interest and
Additional Interest, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Additional 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, Redemption Price and Purchase Price
of, and
B-4
interest and Additional Interest (if any) on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Trustee or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, 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 may act in any such capacity.
4. INDENTURE AND GUARANTEES. The Company issued $177 million in
aggregate principal amount of the Notes under an Indenture dated as of February
20, 2002 (the "INDENTURE") between the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. 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. The Notes are general obligations of the Company. Payment on each Note is
guaranteed on a senior basis, jointly and severally, by the Guarantors pursuant
to Article Eleven of the Indenture.
5. OPTIONAL REDEMPTION. The Company may redeem any or all of the Notes
at any time on or after January 1, 2005, upon not less than 30 nor more than 60
days' prior notice in amounts of $1,000 or an integral multiple thereof at the
Redemption Prices (expressed as a percentage of the principal amount) set forth
below, if redeemed during the 12-month period beginning January 1 of the years
indicated below:
YEAR REDEMPTION
PRICE
2005.................................... 105.813%
2006.................................... 102.906%
in each case together with accrued and unpaid interest and Additional Interest,
if any, to the Redemption Date.
If less than all the Notes are to be redeemed, the Trustee will select
the particular Notes or portions thereof to be redeemed by lot, PRO RATA or by
any other method the Trustee shall deem fair and reasonable.
6. SPECIAL REDEMPTION. In the event the Company completes one or more
Public Equity Offerings on or before January 1, 2005, the Company, at its
option, may use the net cash proceeds from any such Public Equity Offering to
redeem up to 35% of the original principal amount of the Notes (a "SPECIAL
REDEMPTION") at a Redemption Price of 111.625% of the principal amount, together
with accrued and unpaid interest and Additional Interest (if any), to the date
of redemption, PROVIDED, HOWEVER, that at least 65% of the original principal
amount of the Notes will remain outstanding immediately after each such
redemption; and PROVIDED, FURTHER, that each such redemption
B-5
shall occur within 120 days after the date of the closing of the applicable
Public Equity Offering. If less than all the Notes are to be redeemed, the
Trustee will select the particular Notes or portions thereof to be redeemed by
lot, only on a PRO RATA basis or on as nearly a PRO RATA basis as is practicable
(subject to DTC procedures).
7. MANDATORY REDEMPTION. Except as set forth in Paragraph 9 below with
respect to repurchases of Notes in certain events, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
8. NOTICE OF REDEMPTION. Subject to the provisions of the Indenture, a
notice of redemption will be mailed at least 30 days but not more than 60 days
(or 45 days in the case of Mandatory redemption) 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. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a Purchase
Price equal to 101% of the principal amount thereof PLUS accrued and unpaid
interest and Additional Interest, if any, to the date of repurchase, in
accordance with the procedures set forth in the Indenture. Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) On the 366th day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (3)(a), (3)(b) and (3)(c) of paragraph (A) of Section 4.10 of
the Indenture (each, a "NET PROCEEDS OFFER TRIGGER DATE"), such aggregate amount
of Net Cash Proceeds which have not been applied on or before such Net Proceeds
Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of
paragraph (A) of Section 4.10 of the Indenture (each, a "NET PROCEEDS OFFER
AMOUNT") shall be applied by the Company or such Restricted Subsidiary to make
an offer to purchase (the "NET PROCEEDS OFFER") to all Holders and, to the
extent required by the terms of such Pari Passu Indebtedness, an offer to
purchase to all holders of such Pari Passu Indebtedness, on a Purchase Date not
less than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders (and holders of any such Pari Passu Indebtedness)
on a PRO RATA basis, that amount of Notes (and Pari Passu Indebtedness) to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase. Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes and holders of Pari Passu Indebtedness properly tender such Indebtedness
in an amount
B-6
exceeding the Net Proceeds Offer Amount, the tendered Notes and
Pari Passu Indebtedness will be purchased on a PRO RATA basis based on the
aggregate amounts of Notes and Pari Passu Indebtedness tendered (and the Trustee
shall select the tendered Notes of tendering Holders on a PRO RATA basis based
on the amount of Notes tendered). A Net Proceeds Offer shall remain open for a
period of 20 business days or such longer period as may be required by law.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture and 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 any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture and 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 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, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Additional Interest,
if any, on the Notes; (ii) default in payment when due of principal, Redemption
Price or Purchase Price of the Notes when the same becomes due and payable at
maturity, upon redemption, repurchase or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer); (iii) failure by the Company to comply with any
covenant contained in the Indenture for 45 days after notice to the Company by
the Trustee or the Holders of at least 25% of the aggregate principal amount of
the Notes outstanding; (iv) default under certain other agreements relating to
Indebtedness of the Company which default (a) is caused by a failure to pay any
amount due at the stated maturity thereof or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such
B-7
Indebtedness under which there has been a default for failure to pay principal
at final maturity or the maturity of which has been so accelerated, aggregates
$5.0 million or more and such failure shall not have been cured or waived within
20 days thereof; (v) certain final judgments for the payment of money that
remain undischarged for a period of 60 days, PROVIDED that the aggregate of all
such undischarged judgments exceeds $5.0 million; and (vi) certain events of
bankruptcy or insolvency with respect to the Company or any Significant
Subsidiary of the Company. 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 immediately.
Upon any such declaration, the entire principal amount of, and accrued and
unpaid interest and Additional Interest, if any, on the Notes shall become
immediately 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 payment on any Note) if it determines that withholding notice is in
their interest. The Holders of a majority in principal amount of the Notes may
waive any existing or past Default or Event of Default under the Indenture, and
its consequences, except a default in the payment of the principal of, or
interest on any Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. Subject to certain limitations, the
Trustee under the Indenture, in its individual or any other capacity, may become
owner or pledge of Notes and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
15. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts
to Minors Act).
18. DISCHARGE PRIOR TO MATURITY. If the Company deposits with the
Trustee or Paying Agent cash or U.S. Government Securities sufficient to pay the
principal or Redemption Price
B-8
of, and interest and Additional Interest, if any, on, the Notes to maturity or a
specified Redemption Date and satisfies certain conditions specified in the
Indenture, the Company will be discharged from the Indenture, except for certain
Sections thereof.
19. GOVERNING LAW. The Indenture and Guarantees and this Note shall be
governed by and construed in accordance with the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the law of another jurisdiction would be required
thereby. Each of the Company and each Guarantor hereby irrevocably submits to
the jurisdiction of any New York state court sitting in the Borough of Manhattan
in the City of New York or any Federal court sitting in the Borough of Manhattan
in the City of New York in respect of any suit, action or proceeding arising out
of or relating to the Indenture and the Notes, and irrevocably accept for itself
and in respect of its property, generally and unconditionally, jurisdiction of
the aforesaid courts. Each of the Company and each Guarantor irrevocably waives,
to the fullest extent that it may effectively do so under applicable law, trial
by jury and any objection which it may now or hereafter have to the laying of
the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
the Trustee or any Holder of the Notes to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Company or any Guarantor in any other jurisdiction.
20. 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 correctness or accuracy of such numbers either as printed on the Notes
or as contained in any notice of redemption or repurchase 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. Request may be made to:
American Achievement Corporation
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Attention: Secretary
B-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name address and zip code)
and irrevocably appoint _______________________________________________________
agent 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 recognized signature
guarantee medallion program)
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Note purchased
by the Company pursuant to Section 4.10 ("NET PROCEEDS OFFER") or Section 4.15
("CHANGE OF CONTROL OFFER") of the Indenture, check the applicable boxes
/ / Net Proceeds Offer: / / Change of Control Offer:
in whole / / in whole / /
in part / / in part / /
Amount to be Amount to be
purchased: $___________ purchased: $___________
Dated: Signature:
----------- -----------------------------------
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:
--------------------------------------------------
(Participant in recognized signature guarantee
medallion program)
Social Security Number or
Taxpayer Identification Number:
----------------------------------------
B-11
EXHIBIT C
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Note the
cash payments in United States dollars of principal of, premium, if any, and
interest on this Note (and including Additional Interest payable thereon) in the
amounts and at the times when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Note, if lawful, and the payment
or performance of all other Obligations of the Company under the Indenture (as
defined below) or the Note, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Article
Eleven of the Indenture and this Guarantee. This Guarantee will become effective
in accordance with Article Eleven of the Indenture and its terms shall be
evidenced therein. The validity and enforceability of this Guarantee shall not
be affected by the fact that it is not affixed to any particular Note.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Indenture dated as of February 20, 2002, among American
Achievement Corporation, a Delaware corporation, as issuer (the "Company"), each
of the Guarantors named therein and The Bank of New York, as trustee (the
"Trustee") (as amended or supplemented, the "Indenture").
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Each Guarantor hereby agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
[GUARANTOR]
By:
------------------------------------------
Name:
Title:
EXHIBIT D(1)
FORM OF REGULATION S CERTIFICATE
___________________,_______
The Bank of New York
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Attention: Corporate Trust Trustee Administration
Re: AMERICAN ACHIEVEMENT CORPORATION (THE "COMPANY")
11 5/8% SENIOR NOTES DUE 2007 (THE "NOTES")
Dear Sirs:
This letter relates to U.S. $ ______________ principal amount at
maturity of Notes represented by a certificate (the "LEGENDED CERTIFICATE")
which bears a legend outlining restrictions upon transfer of such Legended
Certificate. Pursuant to Section 2.1 of the Indenture (the "INDENTURE") dated as
of February 20, 2002 relating to the Notes, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the United States to
whom the Notes could be transferred in accordance with Rule 904 of Regulation S
promulgated under the U.S. Securities Act of 1933, as amended.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this letter have the
meanings set forth in Regulation S).
Very truly yours,
[Name of Holder]
By:
-------------------------------------------
Authorized Signature
EXHIBIT D(2)
CERTIFICATE TO BE DELIVERED
UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
_________________, ______
The Bank of New York
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Attention: Corporate Trust Trustee Administration
Re: AMERICAN ACHIEVEMENT CORPORATION (THE "COMPANY")
11 5/8% SENIOR NOTES DUE 2007 (THE "NOTES")
Dear Sirs:
This Certificate relates to $_____________ principal amount of Notes
held in *____ book-entry or *_____ certificated form by __________________(the
"TRANSFEROR").
The Transferor:*
/ / has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Note held by the Depositary a Note or
Notes in certificated, registered form of authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register
the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.6 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
/ / Such Note is being acquired for the Transferor's own account,
without transfer.
----------
* Check applicable box
/ / Such Note is being transferred to a "QUALIFIED INSTITUTIONAL
BUYER" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "SECURITIES ACT")) in reliance on Rule 144A.
/ / Such Note is being transferred to an "ACCREDITED INVESTOR" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in
accordance with Regulation D under the Securities Act.
/ / Such Note is being transferred pursuant to an exemption from
registration in accordance with Regulation S under the Securities Act.
/ / Such Note is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under the
Securities Act.
/ / Such Note is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of
Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate.
Very truly yours,
----------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------------
Name:
Title
Date:
------------
D(2)-2
EXHIBIT E
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON QIB ACCREDITED INVESTORS
______________________, _______
The Bank of New York
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Attention: Corporate Trust Trustee Administration
Re: AMERICAN ACHIEVEMENT CORPORATION (THE "COMPANY")
11 5/8% SENIOR NOTES DUE 2007 (THE "NOTES")
Dear Sirs:
In connection with our proposed purchase of 11 5/8% Senior Notes due
2007 (the "NOTES") of the Company, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
February 20, 2002 relating to the Notes (the "INDENTURE") and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with such restrictions and conditions and the Securities
Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the Notes have not been registered under the
Securities Act or any other applicable securities law, and that the Notes may
not be offered, sold or otherwise transferred except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that if we should offer, sell,
transfer, pledge, hypothecate or otherwise dispose of any Notes within two years
after the original issuance of the Notes, we will do so only (A) to the Company
or any Subsidiary thereof, (B) inside the United States to a "qualified
institutional buyer" in compliance with Rule 144A under the Securities Act, (C)
inside the United States to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes to you a signed letter
substantially in the form of this letter, (D) outside the United States to a
foreign person in compliance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available) (F) in accordance with another exemption from
the registration requirements of the Securities, or (G) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein and in the
Indenture.
3. We understand that, on any proposed transfer of any Notes prior to
the later of the original issue date of the Securities and the last date the
Notes were held by an affiliate of the Company pursuant to paragraphs 2(C), 2(D)
and 2(E) above, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed transfer complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "ACCREDITED INVESTOR" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are acquiring the Notes for investment purposes and not with
a view to, or offer of sale in connection with, any distribution in violation of
the Securities Act, and we are each able to bear the economic risk of our or its
investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
(Name of Transferee)
By:
------------------------------------------
Authorized Signature
E(2)-2
EXHIBIT F
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
__________________, ______
The Bank of New York
Attention: Corporate Trust Trustee Administration
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: AMERICAN ACHIEVEMENT CORPORATION (THE "COMPANY")
11 5/8% SENIOR NOTES DUE 2007 (THE "NOTES")
Dear Sirs:
In connection with our proposed sale of $_________ aggregate principal
amount at maturity of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1913.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this letter have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------------------
Authorized Signature
E(2)-4
