EXHIBIT 4.1
CAF ACQUISITION CORPORATION,
as Issuer
and
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY,
as Trustee
____________________
INDENTURE
Dated as of February 6, 1997
____________________
$100,000,000
10% Senior Subordinated Notes due 2007
and
Series B 10% Senior Subordinated Notes due 2007
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1).............................................. 7.10
(a)(2).............................................. 7.10
(a)(3).............................................. N.A.
(a)(4).............................................. N.A.
(a)(5).............................................. 7.08; 7.10
(b)................................................. 7.08; 7.10;
11.02
(c)................................................. N.A.
311(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312(a)................................................. 2.05
(b)................................................. 11.03
(c)................................................. 11.03
313(a)................................................. 7.06
(b)(1).............................................. N.A.
(b)(2).............................................. 7.06
(c)................................................. 7.06; 11.02
(d)................................................. 7.06
314(a)................................................. 4.07; 4.08;
11.02
(b)................................................. N.A.
(c)(1).............................................. 11.04
(c)(2).............................................. 11.04
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 11.05
(f)................................................. N.A.
315(a)................................................. 7.01(b)
(b)................................................. 7.05; 11.02
(c)................................................. 7.01(a)
(d)................................................. 7.01(c)
(e)................................................. 6.11
316(a)(last sentence).................................. 2.09
(a)(1)(A)........................................... 6.05
(a)(1)(B)........................................... 6.04
(a)(2).............................................. N.A.
(b)................................................. 6.07
(c)................................................. 9.05
317(a)(1).............................................. 6.08
(a)(2).............................................. 6.09
(b)................................................. 2.04
318(a)................................................. 11.01
(c)................................................. 11.01
______________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
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TABLE OF CONTENTS
-----------------
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
----
Section 1.01 Definitions.............................................. 1
Section 1.02 Incorporation by Reference of TIA........................ 27
Section 1.03 Rules of Construction.................................... 28
ARTICLE TWO
THE NOTES
Section 2.01 Form and Dating.......................................... 28
Section 2.02 Execution and Authentication;
Aggregate Principal Amount............................. 30
Section 2.03 Registrar and Paying Agent............................... 31
Section 2.04 Paying Agent To Hold Assets in Trust..................... 32
Section 2.05 Noteholder Lists......................................... 32
Section 2.06 Transfer and Exchange.................................... 32
Section 2.07 Replacement Notes........................................ 33
Section 2.08 Outstanding Notes........................................ 34
Section 2.09 Treasury Notes........................................... 34
Section 2.10 Temporary Notes.......................................... 34
Section 2.11 Cancellation............................................. 35
Section 2.12 Defaulted Interest....................................... 35
Section 2.13 CUSIP Number............................................. 36
Section 2.14 Deposit of Moneys........................................ 36
Section 2.15 Restrictive Legends...................................... 36
Section 2.16 Book-Entry Provisions for Global Security................ 38
Section 2.17 Special Transfer Provisions.............................. 40
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee.......................................42
Section 3.02 Selection of Notes To Be Redeemed........................42
Section 3.03 Notice of Redemption.....................................43
Section 3.04 Effect of Notice of Redemption...........................44
Section 3.05 Deposit of Redemption Price..............................44
Section 3.06 Notes Redeemed in Part...................................45
-ii-
ARTICLE FOUR
COVENANTS
Page
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Section 4.01 Payment of Notes....................................... 45
Section 4.02 Maintenance of Office or Agency........................ 45
Section 4.03 Corporate Existence.................................... 46
Section 4.04 Payment of Taxes and Other Claims...................... 46
Section 4.05 Maintenance of Properties and Insurance................ 46
Section 4.06 Compliance Certificate; Notice of Default.............. 47
Section 4.07 Compliance with Laws................................... 48
Section 4.08 SEC Reports............................................ 48
Section 4.09 Waiver of Stay, Extension or Usury Laws................ 49
Section 4.10 Limitation on Restricted Payments...................... 49
Section 4.11 Limitation on Transactions with Affiliates............. 52
Section 4.12 Limitation on Incurrence of Additional Indebtedness.... 53
Section 4.13 Limitation on Dividend and Other
Payment Restrictions Affecting Subsidiaries.......... 53
Section 4.14 Prohibition on Incurrence of Senior Subordinated Debt.. 54
Section 4.15 Change of Control...................................... 54
Section 4.16 Limitation on Asset Sales.............................. 57
Section 4.17 Limitation on Preferred Stock of Subsidiaries.......... 61
Section 4.18 Limitation on Liens.................................... 61
Section 4.19 Limitation of Guarantees by Restricted Subsidiaries.... 62
Section 4.20 Conduct of Business.................................... 63
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of Assets............... 63
Section 5.02 Successor Corporation Substituted...................... 65
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Page
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ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default......................................65
Section 6.02 Acceleration...........................................67
Section 6.03 Other Remedies.........................................68
Section 6.04 Waiver of Past Defaults................................68
Section 6.05 Control by Majority....................................69
Section 6.06 Limitation on Suits....................................69
Section 6.07 Rights of Holders To Receive Payment...................70
Section 6.08 Collection Suit by Trustee.............................70
Section 6.09 Trustee May File Proofs of Claim.......................70
Section 6.10 Priorities.............................................71
Section 6.11 Undertaking for Costs..................................71
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee.................................. 72
Section 7.02 Rights of Trustee.................................. 73
Section 7.03 Individual Rights of Trustee....................... 74
Section 7.04 Trustee's Disclaimer............................... 75
Section 7.05 Notice of Default.................................. 75
Section 7.06 Reports by Trustee to Holders...................... 75
Section 7.07 Compensation and Indemnity......................... 76
Section 7.08 Replacement of Trustee............................. 77
Section 7.09 Successor Trustee by Merger, Etc................... 78
Section 7.10 Eligibility; Disqualification...................... 78
Section 7.11 Preferential Collection of Claims Against Company.. 79
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01 Termination of the Company's Obligations........... 79
Section 8.02 Legal Defeasance and Covenant Defeasance........... 81
Section 8.03 Conditions to Legal Defeasance or
Covenant Defeasance.............................. 82
Section 8.04 Application of Trust Money......................... 84
Section 8.05 Repayment to the Company........................... 85
Section 8.06 Reinstatement...................................... 85
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Page
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders......................... 86
Section 9.02 With Consent of Holders............................ 87
Section 9.03 Effect on Senior Debt.............................. 88
Section 9.04 Compliance with TIA................................ 88
Section 9.05 Revocation and Effect of Consents.................. 89
Section 9.06 Notation on or Exchange of Notes................... 89
Section 9.07 Trustee To Sign Amendments, Etc.................... 90
ARTICLE TEN
SUBORDINATION
Section 10.01 Notes Subordinated to Senior Debt.................. 90
Section 10.02 No Payment on Notes in Certain Circumstances....... 91
Section 10.03 Payment Over of Proceeds upon Dissolution, Etc..... 92
Section 10.04 Payments May Be Paid Prior to Dissolution.......... 94
Section 10.05 Subrogation........................................ 94
Section 10.06 Obligations of the Company Unconditional........... 95
Section 10.07 Notice to Trustee.................................. 95
Section 10.08 Reliance on Judicial Order or Certificate of
Liquidating Agent................................ 96
Section 10.09 Trustee's Relation to Senior Debt.................. 96
Section 10.10 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of
Senior Debt...................................... 97
Section 10.11 Noteholders Authorize Trustee To
Effectuate Subordination of Notes................ 97
Section 10.12 This Article Ten Not To Prevent Events of Default.. 98
Section 10.13 Trustee's Compensation Not Prejudiced.............. 98
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 TIA Controls....................................... 99
Section 11.02 Notices............................................ 99
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Page
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Section 11.03 Communications by Holders with Other Holders....... 100
Section 11.04 Certificate and Opinion as to Conditions Precedent. 100
Section 11.05 Statements Required in Certificate or Opinion...... 101
Section 11.06 Rules by Trustee, Paying Agent, Registrar.......... 101
Section 11.07 Legal Holidays..................................... 101
Section 11.08 Governing Law...................................... 102
Section 11.09 No Adverse Interpretation of Other Agreements...... 102
Section 11.10 No Recourse Against Others......................... 102
Section 11.11 Successors......................................... 102
Section 11.12 Duplicate Originals................................ 102
Section 11.13 Severability....................................... 102
Signatures ................................................... 104
Exhibit A - Form of Initial Note................................... A-1
Exhibit B - Form of Exchange Note.................................. B-1
Exhibit C - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB Accredited
Investors............................................ C-1
Exhibit D - Form of Certificate To Be Delivered in
Connection with Transfers Pursuant to Regulation S... D-1
Note: This Table of Contents shall not, for any purpose,
be deemed to be part of the Indenture.
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1
INDENTURE, dated as of February 6, 1997, between CAF
Acquisition Corporation, a Virginia corporation (the "Com-
pany"), and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, a New York bank-
ing corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an
issue of 10% Senior Subordinated Notes due 2007 (the "Initial
Notes") and Series B 10% Senior Subordinated Notes due 2007
(the "Exchange Notes," and together with the Initial Notes, the
"Notes") and, to provide therefor, the Company has duly autho-
rized the execution and delivery of this Indenture. All things
necessary to make the Notes, when duly issued and executed by
the Company, and authenticated and delivered hereunder, the
valid obligations of the Company, and to make this Indenture a
valid and binding agreement of the Company, have been done.
Each party hereto agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the
Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
-----------
"Acceleration Notice" has the meaning provided in
-------------------
Section 6.02(a).
"Acquired Indebtedness" means Indebtedness of a Per-
---------------------
son 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 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 Subsid-
iary of the Company or such acquisition, merger or
consolidation.
"Acquisition" means the acquisition of all of the
-----------
capital stock of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Floor Coverings, Inc. by
Holdings and the Company on the Issue Date.
2
"Affiliate" means, with respect to any specified Per-
---------
son, 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 "con-
trolled" have meanings correlative of the foregoing.
"Affiliate Transaction" has the meaning provided in
---------------------
Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Reg-
-----
istrar.
"Agent Members" has the meaning provided in
-------------
Section 2.16.
"Asset Acquisition" means (a) 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 Subsid-
iary of the Company or shall be merged with or into the Company
or any Restricted Subsidiary of the Company, or (b) the acqui-
sition by the Company or any Restricted Subsidiary of the Com-
pany of the assets of any Person (other than a Restricted Sub-
sidiary 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, issu-
----------
ance, 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 (a) any Capital
Stock of any Restricted Subsidiary of the Company or (b) any
other property or assets of the Company or any Restricted Sub-
sidiary of the Company other than in the ordinary course of
business; provided, however, that Asset Sales shall not include
-------- -------
(i) a transaction or series of related transactions for which
the Company or its Restricted Subsidiaries receive aggregate
consideration of less than $500,000 and (ii) the sale, lease,
3
conveyance, disposition or other transfer of all or substan-
tially all of the assets of the Company as permitted under Sec-
tion 5.01.
"Authenticating Agent" has the meaning provided in
--------------------
Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any
--------------
similar Federal, state or foreign law for the relief of
debtors.
"Blockage Period" has the meaning provided in
---------------
Section 10.02.
"Board of Directors" means, as to any Person, the
------------------
board of directors of such Person or any duly authorized com-
mittee thereof.
"Board Resolution" means, with respect to any Person,
----------------
a copy of a resolution certified by the Secretary or an ▇▇▇▇▇-
▇▇▇▇ 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.
"Business Day" means a day that is not a Legal
------------
Holiday.
"Capitalized Lease Obligation" means, as to any Per-
----------------------------
son, 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 capi-
talized amount of such obligations at such date, determined in
accordance with GAAP.
"Capital Stock" means (i) with respect to any Person
-------------
that is a corporation, any and all shares, interests, partici-
pations 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 (ii) with respect
to any Person that is not a corporation, any and all partner-
ship or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obli-
----------------
gations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by
4
the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(ii) 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 Ratings Service
("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
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;
(iv) 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 Amer-
ica 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
$250,000,000; (v) repurchase obligations with a term of not
more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meet-
ing the qualifications specified in clause (iv) above; and
(vi) investments in money market funds which invest substan-
tially all their assets in securities of the types described in
clauses (i) through (v) above.
"Change of Control" means the occurrence of one or
-----------------
more of the following events: (i) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the
Company or Holdings 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 one or both of the Principals or their respective Related
Parties; (ii) the approval by the holders of Capital Stock of
the Company or Holdings, as the case may be, of any plan or
proposal for the liquidation or dissolution of the Company or
Holdings, as the case may be (whether or not otherwise in com-
pliance with the provisions of this Indenture); (iii) any Per-
son or Group (other than one or both of the Principals or their
respective Related Parties) shall become the owner, directly or
indirectly, beneficially or of record, of shares representing
more than 40% of the aggregate ordinary voting power repre-
sented by the issued and outstanding Capital Stock (the "Voting
Stock") of the Company or Holdings and the Principals and their
respective Related Parties beneficially own, directly or
5
indirectly, in the aggregate a lesser percentage of the Voting
Stock of the Company or Holdings, as the case may be, than such
other Person or Group; or (iv) the replacement of a majority of
the Board of Directors of the Company or Holdings over a
two-year period from the directors who constituted the Board of
Directors of the Company or Holdings, as the case may be, at
the beginning of such period, and such replacement shall not
have been approved by a vote of at least a majority of the
Board of Directors of the Company or Holdings, as the case may
be, then still in office who either were members of such Board
of Directors at the beginning of such period or whose election
as a member of such Board of Directors was previously so
approved or who were nominated by, or designees of, either of
the Principals or their respective Related Parties.
"Change of Control Date" has the meaning provided in
----------------------
Section 4.15.
"Change of Control Offer" has the meaning provided in
-----------------------
Section 4.15.
"Change of Control Payment Date" has the meaning pro-
------------------------------
vided in Section 4.15.
"Common Stock" of any Person means any and all
------------
shares, interests or other participations in, and other equiva-
▇▇▇▇▇ (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 the party named as such in this
-------
Indenture until a successor replaces it pursuant to this Inden-
ture and thereafter means such successor.
"Consolidated EBITDA" means, with respect to any Per-
-------------------
son, for any period, the sum (without duplication) of (i) Con-
solidated Net Income and (ii) 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, (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.
6
"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 on or prior to the date of the transac-
tion giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (the "Transaction Date") to Consol-
idated Fixed Charges of such Person for the Four Quarter
Period. In addition to and without 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 (i) the incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the applica-
tion 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 pursu-
ant 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 (ii) any Asset Sales or Asset
Acquisitions (including, without limitation, any Asset Acquisi-
tion 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 other-
wise 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 Regula-
tion S-X under the Securities Act) attributable to the assets
which are the subject of the Asset Acquisition or Asset Sale
during the Four Quarter Period) occurring during the Four Quar-
ter 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 Asset Acquisition (including the incur-
rence, assumption or liability for any such Indebtedness or
Acquired Indebtedness) occurred on the first day of the Four
Quarter Period. If such Person or any of its Restricted Subsid-
iaries 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
7
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 deter-
mined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Indebted-
ness 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.
"Consolidated Fixed Charges" means, with respect to
--------------------------
any Person for any period, the sum, without duplication, of
(i) Consolidated Interest Expense (excluding amortization or
write-off of deferred financing costs), plus (ii) the product
of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person (other than dividends paid in
Qualified Capital Stock) 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:
(i) the aggregate of the interest expense of such Person and
its Restricted Subsidiaries for such period determined on a
consolidated basis in conformity 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 (ii) 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; pro-
---
vided that there shall be excluded therefrom (a) after-tax
-----
gains and losses from Asset Sales (without regard to the
$500,000 limitation set forth in the definition thereof) or
8
abandonments or reserves relating thereto, (b) after-tax items
classified as extraordinary or nonrecurring gains, (c) the net
income of any Person acquired in a "pooling of interests"
transaction accrued 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, (d) 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 contract,
operation of law or otherwise, (e) the net income of any Per-
son, other than a Wholly-Owned Restricted Subsidiary of the
referent Person, except to the extent of cash dividends or dis-
tributions paid to the referent Person or a Wholly Owned
Restricted Subsidiary of the referent Person by such Person,
(f) 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, (g) income or loss attributable to discontinued
operations (including, without limitation, operations disposed
of during such period whether or not such operations were clas-
sified as discontinued), and (h) in the case of a successor to
the referent Person by consolidation or merger or as a trans-
feree of the referent Person's assets, any earnings of the suc-
cessor corporation prior to such consolidation, merger or
transfer of assets. Notwithstanding the foregoing, "▇▇▇▇▇▇▇-
dated Net Income" shall be calculated without giving effect to
(i) the amortization of any premiums, fees or expenses incurred
in connection with the Acquisition and related financings and
(ii) the amortization or depreciation of any amounts required
or permitted by Accounting Principles Board Opinion Nos. 16
(including non-cash write-ups and non-cash charges relating to
inventory and fixed assets, in each case arising in connection
with the Acquisition) and 17 (including non-cash charges relat-
ing to intangibles and goodwill arising in connection with the
Acquisition).
"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 non-cash charge which requires an accrual
of or a reserve for cash charges for any future period).
9
"Covenant Defeasance" has the meaning provided in
-------------------
Section 8.02.
"Credit Agreement" means the Credit Agreement dated
----------------
as of the Issue Date, among Holdings, the Company, the lenders
party thereto in their capacities as lenders thereunder and
Bankers Trust Company, as agent, together with the related doc-
uments thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agree-
ments may be amended (including 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 limi-
tation, increasing the amount of available borrowings thereun-
der (provided that such increase in borrowings is permitted by
--------
Section 4.12) or adding Restricted Subsidiaries of the Company
as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any succes-
sor or replacement agreement and whether by the same or any
other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange con-
------------------
tract, 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.
"Custodian" means any receiver, trustee, assignee,
---------
liquidator, sequestrator or similar official under any Bank-
ruptcy Law.
"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.
"Default Notice" has the meaning provided in
--------------
Section 10.02.
"Depository" means The Depository Trust Company, its
----------
nominees and successors.
"Designated Senior Debt" means (i) Indebtedness under
----------------------
or in respect of the Credit Agreement and (ii) any other
Indebtedness constituting Senior Debt which, at the time of
determination, has an aggregate principal amount of at least
$25.0 million and is specifically designated in the instrument
10
evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"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), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obliga-
tion or otherwise, or is redeemable at the sole option of the
holder thereof on or prior to the final maturity date of the
Notes.
"Event of Default" has the meaning provided in Sec-
----------------
tion 6.01.
"Exchange Act" means the Securities Exchange Act of
------------
1934, as amended, or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the pre-
--------------
amble to this Indenture.
"Exchange Offer" means the registration by the Com-
--------------
pany under the Securities Act pursuant to a registration state-
ment of the offer by the Company to each Holder of the Initial
Notes to exchange all the Initial Notes held by such Holder for
the Exchange Notes in an aggregate principal amount equal to
the aggregate principal amount of the Initial Notes held by
such Holder, all in accordance with the terms and conditions of
the Registration Rights Agreement.
"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 shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"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 approved by a significant segment of the
11
accounting profession of the United States, which are in effect
as of the Issue Date.
"Global Note" has the meaning provided in
-----------
Section 2.01.
"Guarantee" has the meaning provided in Section 4.19.
---------
"Holder" or "Noteholder" means the Person in whose
------ ----------
name a Note is registered on the Registrar's books.
"Holdings" means CAF Holdings, Inc., a Virginia cor-
--------
poration, and the parent corporation of the Company.
"incur" has the meaning provided in Section 4.12.
-----
"Indebtedness" means with respect to any Person,
------------
without duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person,
(iv) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obli-
gations and all obligations under any title retention agreement
(but excluding trade accounts payable and other accrued liabil-
ities 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), (v) all obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar
credit transaction, (vi) guarantees and other contingent obli-
gations in respect of Indebtedness referred to in clauses (i)
through (v) above and clause (viii) below, (vii) all obliga-
tions of any other Person of the type referred to in clauses
(i) through (vi) 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 prop-
erty or asset or the amount of the obligation so secured,
(viii) all obligations under currency swap agreements and
interest swap agreements of such Person and (ix) all Disquali-
fied Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any. For purposes hereof,
the "maximum fixed repurchase price" of any Disqualified Capi-
tal Stock which does not have a fixed repurchase price shall be
12
calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were pur-
chased 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 Dis-
qualified Capital Stock, such fair market value shall be deter-
mined reasonably and in good faith by the Board of Directors of
the issuer of such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or sup-
---------
plemented from time to time in accordance with the terms
hereof.
"Independent Financial Advisor" means a firm (i)
-----------------------------
which does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest
in the Company and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent and quali-
fied to perform the task for which it is to be engaged.
"Initial Notes" has the meaning provided in the pre-
-------------
amble to this Indenture.
"Initial Purchaser" means BT Securities Corporation.
-----------------
"Institutional Accredited Investor" means an institu-
---------------------------------
tion that is an "accredited investor" as that term is defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Interest Payment Date" means the stated maturity of
---------------------
an installment of interest on the Notes.
"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 float-
ing rate of interest on the same notional amount and shall
include, without limitation, interest rate swaps, caps, floors,
collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue
---------------------
Code of 1986, as amended to the date hereof and from time to
time hereafter.
13
"Investment" means, with respect to any Person, any
----------
direct or indirect loan or other extension of credit (includ-
ing, without limitation, a guarantee) or capital contribution
to (by means of any transfer of cash or other property to oth-
ers 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 securi-
ties or evidences of Indebtedness issued by, any Person.
"Investment" shall exclude extensions of trade credit by the
Company and its Restricted Subsidiaries on commercially reason-
able terms in accordance with normal trade practices of the
Company or such Restricted Subsidiary, as the case may be. For
the purposes of Section 4.10, (i) "Investment" shall include
and be valued at the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsid-
iary is designated an Unrestricted Subsidiary and shall exclude
the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary and (ii) the amount of any
Investment shall be the original cost of such Investment plus
the cost of all additional Investments by the Company or any of
its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment, reduced by the pay-
ment of dividends or distributions in connection with such
Investment or any other amounts received in respect of such
Investment; provided that no such payment of dividends or dis-
--------
tributions or receipt of any such other amounts shall reduce
the amount of any Investment if such payment of dividends or
distributions or receipt of any such amounts would be included
in Consolidated Net Income. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any
Common Stock of any direct or indirect Restricted Subsidiary of
the Company such that, after giving effect to any such sale or
disposition, the Company no longer owns, directly or indi-
rectly, 100% of the outstanding Common Stock of such Restricted
Subsidiary, the Company shall be deemed to have made an Invest-
ment 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.
"Issue Date" means the date of original issuance of
----------
the Notes.
"Legal Defeasance" has the meaning provided in Sec-
----------------
tion 8.02.
14
"Legal Holiday" has the meaning provided in
-------------
Section 11.07.
"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 agree-
ment, any lease in the nature thereof and any agreement to give
any security interest).
"Maturity Date" means January 15, 2007.
-------------
"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 (a) reasonable
out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid
or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements, (c) repayment of
Indebtedness that is required to be repaid in connection with
such Asset Sale and (d) 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.
"Net Proceeds Offer" has the meaning provided in
------------------
Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning
-------------------------------
provided in Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning
-------------------------------
provided in Section 4.16.
"Non-U.S. Person" means a person who is not a U.S.
---------------
person, as defined in Regulation S.
15
"Notes" means the Initial Notes and the Exchange
-----
Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal,
-----------
premium, interest, penalties, fees, indemnifications, ▇▇▇▇-
bursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum
-------------------
dated January 29, 1997, pursuant to which the Initial Notes
were offered, and any supplement thereto.
"Officer" means, with respect to any Person, the
-------
Chairman of the Board, the Chief Executive Officer, the Presi-
dent, any Vice President, the Chief Financial Officer, the
Treasurer, the Controller, or the Secretary of such Person, or
any other officer designated by the Board of Directors serving
in a similar capacity.
"Officers' Certificate" means, with respect to any
---------------------
Person, a certificate signed by two Officers or by an Officer
and either an Assistant Treasurer or an Assistant Secretary of
such Person and otherwise complying with the requirements of
Sections 11.04 and 11.05, as they relate to the making of an
Officers' Certificate.
"Offshore Physical Notes" has the meaning provided in
-----------------------
Section 2.01.
"Opinion of Counsel" means a written opinion from
------------------
legal counsel, who may be counsel for the Company, and who is
reasonably acceptable to the Trustee and not rendered by any
employee of the Company or any of its Affiliates or Subsidiar-
ies complying with the requirements of Sections 11.04 and
11.05, as they relate to the giving of an Opinion of Counsel.
"Paribas Related Party" means Paribas Principal Inc.
---------------------
and any of its Affiliates.
"Paying Agent" has the meaning provided in
------------
Section 2.03.
"Permitted Indebtedness" means, without duplication,
----------------------
each of the following:
16
(i) Indebtedness under the Notes and this
Indenture;
(ii) Indebtedness incurred pursuant to the
Credit Agreement in an aggregate principal amount at any
time outstanding not to exceed $85 million (A) less the
amount of all mandatory principal payments actually made
by the Company in respect of term loans thereunder
(excluding any such payments to the extent refinanced at
the time of payment under a replaced Credit Agreement) and
(B) in the case of a revolving credit facility, reduced by
any required permanent repayments (which are accompanied
by a corresponding permanent commitment reduction)
thereunder;
(iii) other Indebtedness of the Company and
its Restricted Subsidiaries outstanding on the Issue Date
reduced by the amount of any scheduled amortization pay-
ments or mandatory prepayments when actually paid or per-
manent reductions thereon;
(iv) Interest Swap Obligations of the
Company covering Indebtedness of the Company or any of its
Restricted Subsidiaries and Interest Swap Obligations of
any Restricted Subsidiary of the Company covering
Indebtedness of such Restricted Subsidiary; provided,
--------
however, that such Interest Swap Obligations are entered
-------
into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with this Indenture to
the extent the notional principal amount of such Interest
Swap Obligation does not exceed the principal amount of
the Indebtedness to which such Interest Swap Obligation
relates;
(v) 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;
(vi) Indebtedness of a Wholly Owned
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 held by a Person other than the
Company or a Wholly Owned Restricted Subsidiary of the
Company;
17
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 in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such
Indebtedness;
(vii) 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, in each case subject
to no Lien; 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 any
Person holds a Lien in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the Company;
(viii) 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;
(ix) Indebtedness of the Company or any of
its Restricted Subsidiaries represented by letters of
credit for the account of the Company or such Restricted
Subsidiary, as the case may be, in order to provide
security for workers' compensation claims, payment
obligations in connection with self-insurance, performance
bonds, surety bonds or similar requirements in the
ordinary course of business;
(x) Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its
Restricted Subsidiaries incurred in the ordinary course of
business not to exceed $5.0 million at any one time
outstanding;
(xi) Indebtedness of foreign Restricted
Subsidiaries of the Company not to exceed $10.0 million at
any one time outstanding; provided that at the time of any
--------
incurrence
18
of such Indebtedness by any such foreign
Restricted Subsidiary of the Company, the Company could
have incurred such Indebtedness in accordance with the
Consolidated Fixed Charge Coverage Ratio test in
Section 4.12;
(xii) Refinancing Indebtedness;
(xiii) guarantees by the Company and its
Wholly Owned Restricted Subsidiaries of each other's
Indebtedness; provided that such Indebtedness is permitted
--------
to be incurred under this Indenture, including, with
respect to guarantees by Wholly Owned Restricted
Subsidiaries of the Company, the provisions of Section
4.19; and
(xiv) additional Indebtedness of the Company
and its Restricted Subsidiaries in an aggregate principal
amount not to exceed $15.0 million at any one time
outstanding (which amount may, but need not, be incurred
in whole or in part under the Credit Agreement).
"Permitted Investments" means: (i) Investments by
---------------------
the Company or any Restricted Subsidiary of the Company in any
Person that is or will become immediately after such Investment
a Wholly Owned Restricted Subsidiary of the Company or that
will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary of the Company, provided that such Wholly
--------
Owned Restricted Subsidiary is not restricted from making divi-
dends or similar distributions by contract, operation of law or
otherwise; (ii) Investments in the Company by any Restricted
Subsidiary of this Company; provided that any Indebtedness evi-
--------
dencing such Investment is unsecured and subordinated, pursuant
to a written agreement, to the Company's obligations under the
Notes and this Indenture; (iii) Investments in cash and Cash
Equivalents; (iv) loans and advances to employees and officers
of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes not in
excess of $1.0 million at any one time outstanding; (v) Cur-
rency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or its Restricted Subsid-
iaries' businesses and otherwise in compliance with this Inden-
ture; (vi) additional Investments not to exceed $5.0 million at
any one time outstanding; (vii) 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; (viii) Invest-
ments made by the Company or its Restricted Subsidiaries as a
result of consideration received in connection with an Asset
19
Sale made in compliance with Section 4.16; and (ix) guarantees
permitted by Section 4.19.
"Permitted Liens" means the following types of Liens:
---------------
(i) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries shall
have set aside on its books such reserves as may be required pursuant to GAAP;
(ii) 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;
(iii) 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 consistent with past practice 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);
(iv) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall not
have been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(v) 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;
(vi) any interest or title of a lessor under any
Capitalized Lease Obligation; provided that such Liens do not
--------
20
extend to any property or assets which is not leased property
subject to such Capitalized Lease Obligation;
(vii) Liens securing Capitalized Lease Obligations and Purchase
Money Indebtedness permitted under clause (x) of the definition of "Permitted
Indebtedness"; provided, however, that in the case of Purchase Money
Indebtedness (A) the Indebtedness shall not exceed the cost of such property or
assets being acquired or constructed and shall not be secured by any property or
assets of the Company or any Restricted Subsidiary of the Company other than the
property and assets being acquired or constructed and (B) the Lien securing such
Indebtedness shall be created within 90 days of such acquisition or
construction;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;
(ix) 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;
(x) 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;
(xi) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens securing Indebtedness under Currency Agreements; and
(xiii) Liens securing Acquired Indebtedness incurred in
accordance with Section 4.12; 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
21
Company or a Restricted Subsidiary of the Company and (B) such Liens do not
extend to or cover any property or assets of the Company or 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.
"Person" means an individual, partnership, corpora-
------
tion, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Notes" has the meaning provided in
--------------
Section 2.01.
"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.
"principal" of any Indebtedness (including the Notes)
---------
means the principal amount of such Indebtedness plus the pre-
mium, if any, on such Indebtedness.
"Principals" means Quad-C, Inc. and Paribas Principal
----------
Inc.
"Private Placement Legend" means the legend initially
------------------------
set forth on the Notes in the form set forth in Section 2.15.
"Proceeds Purchase Date" has the meaning provided in
----------------------
Section 4.16.
"pro forma" means, with respect to any calculation
---------
made or required to be made pursuant to the terms of this
Indenture, a calculation in accordance with Article 11 of Regu-
lation S-X under the Securities Act, as determined by the Board
of Directors of the Company.
"Public Equity Offering" means an underwritten public
----------------------
offering of Qualified Capital Stock of Holdings or the Company
pursuant to a registration statement filed with the SEC in
accordance with the Securities Act; provided that, in the event
--------
22
of a Public Equity Offering by Holdings, Holdings contributes
to the capital of the Company the portion of the net cash pro-
ceeds of such Public Equity Offering necessary to pay the
aggregate redemption price (plus accrued interest to the
redemption date) of the Notes to be redeemed pursuant to
Paragraph 6(b) of the Notes.
"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.
"Quad-C Related Party" means Quad-C, Inc. and any of
--------------------
its Affiliates.
"Qualified Capital Stock" means any Capital Stock
-----------------------
that is not Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have
----------------------------- ---
the meaning specified in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the
-----------
Notes, whether or not a Legal Holiday.
"Redemption Date," when used with respect to any Note
---------------
to be redeemed, means the date fixed for such redemption pursu-
ant to this Indenture and the Notes.
"Redemption Price," when used with respect to any
----------------
Note to be redeemed, means the price fixed for such redemption
pursuant to this Indenture and the Notes.
"Reference Date" has the meaning provided in
--------------
Section 4.10.
"Refinance" means, in respect of any security or
---------
Indebtedness, to refinance, extend, renew, refund, repay, pre-
pay, 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 "Refinanc-
ing" 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 4.12 (other
than pursuant to clauses (ii), (iv), (v), (vi), (vii), (viii),
23
(ix), (x), (xi), (xiii) or (xiv) of the definition of
Permitted Indebtedness), in each case that does not (1) result
in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed
Refinancing (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 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 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.
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" means the Registra-
-----------------------------
tion Rights Agreement dated February 6, 1997 among the Company
and the Initial Purchaser for the benefit of themselves and the
Holders, as the same may be amended or modified from time to
time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securi-
------------
ties Act.
"Related Party" means, with respect to Quad-C, Inc.,
-------------
any Quad-C Related Party and with respect to Paribas Principal
Inc., any Paribas Related Party.
"Replacement Assets" has the meaning provided in Sec-
------------------
tion 4.16.
"Representative" means the indenture trustee or other
--------------
trustee, agent or representative in respect of any Designated
Senior Debt; provided that if, and for so long as, any Desig-
--------
nated Senior Debt lacks such a representative, then the Repre-
sentative for such Designated Senior Debt shall at all times
constitute the holders of a majority in outstanding principal
amount of such Designated Senior Debt in respect of any Desig-
nated Senior Debt. As of the date first written above, the only
representative in respect of Designated Senior Debt is Bankers
Trust Company, as agent under the Credit Agreement.
24
"Restricted Payment" has the meaning provided in
------------------
Section 4.10.
"Restricted Security" has the meaning assigned to
-------------------
such term in Rule 144(a)(3) under the Securities Act; provided
--------
that the Trustee shall be entitled to request and conclusively
rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Sub-
---------------------
sidiary of such Person which at the time of determination is
not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"Sale and Leaseback Transaction" means any direct or
------------------------------
indirect arrangement with any Person or to which any such Per-
son is a party, providing for the leasing to the Company or a
Restricted Subsidiary of any property, whether owned by the
Company or any Restricted Subsidiary 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.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means, the Securities Act of 1933,
--------------
as amended, or any successor statute or statutes thereto.
"Senior Debt" means the principal of, premium, if
-----------
any, and interest (including any interest accruing subsequent
to the filing of a petition of bankruptcy at the rate provided
for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the
case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstand-
ing expressly provides that such Indebtedness shall not be
senior in right of payment to the Notes. Without limiting the
generality of the foregoing, "Senior Debt" shall also include
the principal of, premium, if any, interest (including any
interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed
claim under applicable law) on, and all other amounts owing in
25
respect of, (x) all monetary obligations (including guarantees
thereof) of every nature of the Company under the Credit Agree-
ment, including, without limitation, obligations to pay princi-
pal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations (including guarantees thereof) and (z) all obliga-
tions (including guarantees thereof) under Currency Agreements,
in each case whether outstanding on the Issue Date or there-
after incurred. Notwithstanding the foregoing, Senior Debt
shall not include (i) any Indebtedness of the Company to a Sub-
sidiary of the Company, (ii) Indebtedness to, or guaranteed on
behalf of, any shareholder, director, officer or employee of
the Company or any Subsidiary of the Company (including, with-
out limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other amounts
incurred in connection with obtaining goods, materials or ser-
vices, (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other
taxes owed or owing by the Company, (vi) that portion of any
Indebtedness incurred in violation of the provisions set forth
under Section 4.12 (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause
(vi) if the holder(s) of such obligation or their representa-
tive and the Trustee shall have received an Officers' Certifi-
cate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit
Indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing
thereunder is made would not) violate such provisions of this
Indenture) and (vii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebted-
ness of the Company.
"Significant Subsidiary" shall have the meaning set
----------------------
forth in Rule 1.02(w) of Regulation S-X under the Securities
Act.
"Subsidiary", with respect to any Person, means
----------
(i) any corporation of which the outstanding Capital Stock hav-
ing 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
(ii) any other Person of which at least a majority of the vot-
ing interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person.
26
"Surviving Entity" has the meaning provided in Sec-
----------------
tion 5.01.
"Tax Allocation Agreement" means the tax allocation
------------------------
agreement between the Company and Holdings as in effect on the
Issue Date.
"TIA" means the Trust Indenture Act of 1939 (15
---
U.S.C. SS 77aaa-77bbbb), as amended, as in effect on the date
of this Indenture, except as otherwise provided in Section
9.04.
"Trust Officer" means any officer of the Trustee
-------------
assigned by the Trustee to administer this Indenture, or in the
case of a successor trustee, an officer assigned to the depart-
ment, division or group performing the corporation trust work
of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this
-------
Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such
successor.
"Unrestricted Subsidiary" of any Person means (i) any
-----------------------
Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsid-
iary by the Board of Directors of such Person in the manner
provided below and (ii) any Subsidiary of an Unrestricted Sub-
sidiary. The Board of Directors of the Company may designate
any Subsidiary (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Sub-
sidiary 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 (x) the Company certifies to the
--------
Trustee that such designation complies with Section 4.10 and
(y) each Subsidiary to be so designated and each of its Subsid-
iaries has not at the time of designation, and does not there-
after, 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 Subsid-
iaries. The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary only
if (x) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebted-
ness (other than Permitted Indebtedness) in compliance with
27
Section 4.12 and (y) immediately before and immediately after
giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing. Any such desig-
nation 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 Obligations" means direct obliga-
---------------------------
tions of, and obligations guaranteed by, the United States of
America for the payment of which the full faith and credit of
the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of
-----------------
the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
"U.S. Physical Notes" has the meaning provided in
-------------------
Section 2.01.
"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 princi-
pal 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 (cal-
culated 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 Restricted Subsidiary of such Person of which all the
outstanding voting securities (other than in the case of a for-
eign Restricted Subsidiary, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Per-
sons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the
TIA, such 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:
28
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a
Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Com-
pany or any other obligor on the Notes.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise
defined has the meaning assigned to it in accordance with
GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the
plural, and words in the plural include the singular; and
(5) "herein," "hereof" and other words of
similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
---------------
The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A
29
hereto. The Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B
hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or depository rule or
usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them.
Each Note shall be dated the date of its issuance and shall
show the date of its authentication.
The terms and provisions contained in the Notes,
annexed hereto as Exhibits A and B, shall constitute, and are
hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execu-
tion 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 one or more permanent global
Notes in registered form, substantially in the form set forth
in Exhibit A (the "Global Note"), deposited with the Trustee,
as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Notes offered and sold in offshore transactions in
reliance on Regulation S shall be issued in the form of perma-
nent certificated Notes in registered form in substantially the
form set forth in Exhibit A (the "Offshore Physical Notes").
Notes offered and sold in reliance on any other exemption from
registration under the Securities Act other than as described
in the preceding paragraph shall be issued, and Notes offered
and sold in reliance on Rule 144A may be issued, in the form of
permanent certificated Notes in registered form, in substan-
tially the form set forth in Exhibit A (the "U.S. Physical
Notes"). The Offshore Physical Notes and the U.S. Physical
Notes are sometimes collectively herein referred to as the
"Physical Notes." Physical Notes shall initially be registered
in the name of the Depository or the nominee of such Depository
and be delivered to the Trustee as custodian for such Deposi-
tory. Beneficial owners of Physical Notes, however, may
request registration of such Physical Notes in their names or
the names of their nominees.
30
SECTION 2.02. Execution and Authentication;
Aggregate Principal Amount.
----------------------------
Two Officers, or an Officer and an Assistant Secre-
tary, shall sign, or one Officer shall sign and one Officer or
an Assistant Secretary (each of whom shall, in each case, have
been duly authorized by all requisite corporate actions) shall
attest to, the Notes for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the
Notes.
If an Officer or Assistant Secretary whose signature
is on a Note was an Officer or Assistant Secretary at the time
of such execution but no longer holds that office or position
at the time the Trustee authenticates the Note, the Note shall
nevertheless be valid.
A Note shall not be valid until an authorized signa-
tory of the Trustee manually signs the certificate of authenti-
cation on the Note. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for
original issue in the aggregate principal amount not to exceed
$100,000,000, and (ii) Exchange Notes from time to time for
issue only in exchange for a like principal amount of Initial
Notes, in each case upon written orders of the Company in the
form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Notes to be authenticated, the date
on which the Notes are to be authenticated and the aggregate
principal amount of Notes outstanding on the date of authenti-
cation, whether the Notes are to be Initial Notes or Exchange
Notes, and shall further specify the amount of such Notes to be
issued as the Global Note, Offshore Physical Notes or U.S.
Physical Notes. The aggregate principal amount of Notes out-
standing at any time may not exceed $100,000,000, except as
provided in Section 2.07.
The Trustee shall not be required to authenticate
Notes if the issuance of such Notes pursuant to this Indenture
will affect the Trustee's own rights, duties or immunities
under the Notes and this Indenture in a manner which is not
reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent (the
"Authenticating Agent") reasonably acceptable to the Company to
authenticate Notes. Unless otherwise provided in the
31
appointment, an Authenticating Agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Inden-
ture to authentication by the Trustee includes authentication
by such Authenticating Agent. An Authenticating Agent has the
same rights as an Agent to deal with the Company and Affiliates
of the Company.
The Notes shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 and any inte-
gral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which
shall be located in the Borough of Manhattan in the City of New
York, State of New York) where (a) Notes may be presented or
surrendered for registration of transfer or for exchange ("Reg-
istrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the
Company in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company, upon prior writ-
ten notice to the Trustee, may have one or more co-Registrars
and one or more additional paying agents reasonably acceptable
to the Trustee. The term "Paying Agent" includes any addi-
tional Paying Agent. Neither the Company nor any Affiliate of
the Company may act as Paying Agent.
The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which
agreement shall incorporate the provisions of the TIA and
implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee, in advance, of
the name and address of any such Agent. If the Company fails
to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Regis-
trar, Paying Agent and agent for service of demands and notices
in connection with the Notes, until such time as the Trustee
has resigned or a successor has been appointed. The Paying
Agent or Registrar may resign upon 30 days notice to the
Company.
32
SECTION 2.04. Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other
than the Trustee to agree in writing that each Paying Agent
shall hold in trust for the benefit of the Holders or the Trus-
tee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets
have been distributed to it by the Company or any other obligor
on the Notes), and the Company and the Paying Agent shall
notify the Trustee of any Default by the Company (or any other
obligor on the Notes) in making any such payment. The Company
at any time may require a Paying Agent to distribute all assets
held by it to the Trustee and account for any assets disbursed
and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it
to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent
shall have no further liability for such assets.
SECTION 2.05. Noteholder 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 the Holders. If the Trustee is not
the Registrar, the Company shall furnish or cause the Registrar
to furnish to the Trustee before each Record Date and at such
other times as the Trustee may request in writing a list as of
such date and in such form as the Trustee may reasonably
require of the names and addresses of the Holders, which list
may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.16 and 2.17,
when Notes are presented to the Registrar or a co-Registrar
with a request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes of
other authorized denominations, the Registrar or co-Registrar
shall register the transfer or make the exchange as requested
if its requirements for such transaction are met; provided,
--------
however, that the Notes presented or surrendered for registra-
-------
tion of transfer or exchange shall be duly endorsed or accompa-
▇▇▇▇ by a written instrument of transfer in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in
33
writing. To permit registrations of transfer and exchanges,
the Company shall execute and the Trustee shall authenticate
Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum suffi-
cient 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 exchanges or
transfers pursuant to Sections 2.10, 3.06, 4.15, 4.16 or 9.06,
in which event the Company shall be responsible for the payment
of such taxes).
The Registrar or co-Registrar shall not be required
to register the transfer of or exchange of any Note (i) during
a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Notes and ending at
the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to
Article Three, except the unredeemed portion of any Note being
redeemed in part.
Any Holder of the Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interests
in such Global Notes may be effected only through a book entry
system maintained by the Holder of such Global Note (or its
agent), and that ownership of a beneficial interest in the Note
shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or
if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Com-
pany, such Holder must provide an affidavit of lost certificate
and an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Agent from any loss which any of
them may suffer if a Note is replaced. The Company may charge
such Holder for its reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of
counsel. Every replacement Note shall constitute an additional
obligation of the Company.
34
SECTION 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that
have been authenticated by the Trustee except those cancelled
by it, those delivered to it for cancellation and those
described in this Section as not outstanding. Subject to the
provisions of Section 2.09, a Note does not cease to be out-
standing because the Company or any of its Affiliates holds the
Note.
If a Note is replaced pursuant to Section 2.07 (other
than a mutilated Note surrendered for replacement), it ceases
to be outstanding unless the Trustee receives an Opinion of
Counsel that the replaced Note is held by a bona fide pur-
---- ----
chaser. A mutilated Note ceases to be outstanding upon surren-
der of such Note and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Maturity Date the Pay-
ing Agent holds U.S. Legal Tender or U.S. Government Obliga-
tions sufficient to pay all of the principal and interest due
on the Notes payable on that date and is not prohibited from
paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction,
waiver, consent or notice, Notes owned by the Company or any of
its Affiliates shall be considered as though they are not out-
standing, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direc-
tion, waiver or consent, only Notes which a Trust Officer of
the Trustee actually knows are so owned shall be so considered.
The Company shall notify the Trustee, in writing, when it or
any of its Affiliates repurchases or otherwise acquires Notes,
of the aggregate principal amount of such Notes so repurchased
or otherwise acquired.
SECTION 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate tempo-
rary Notes upon receipt of a written order of the Company in
the form of an Officers' Certificate. The Officers'
35
Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to
be authenticated. Temporary Notes shall be substantially in
the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee
shall authenticate upon receipt of a written order of the Com-
pany pursuant to Section 2.02 definitive Notes in exchange for
temporary Notes.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee, or at the direc-
tion of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the
Company, shall dispose of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07,
the Company may not issue new Notes to replace Notes that it
has paid or delivered to the Trustee for cancellation. If the
Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surren-
dered to the Trustee for cancellation pursuant to this Section
2.11.
SECTION 2.12. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest, plus (to the
extent lawful) any interest payable on the defaulted interest
to the Persons who are Holders on a subsequent special record
date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest
or the next succeeding Business Day if such date is not a Busi-
ness Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder, as of a
recent date selected by the Company, with a copy to the Trus-
tee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be
paid.
36
SECTION 2.13. CUSIP Number.
------------
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 no representation is hereby deemed to be made by
the Trustee as to the correctness or accuracy of the CUSIP num-
ber 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 promptly notify the Trustee of
any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Inter-
est Payment Date and on the Maturity Date, the Company shall
have deposited with the Paying Agent in immediately available
funds money sufficient to make cash payments, if any, due on
such Interest Payment Date or Maturity Date, as the case may
be, in a timely manner which permits the Paying Agent to remit
payment to the Holders on such Interest Payment Date or Matur-
ity Date, as the case may be.
SECTION 2.15. Restrictive Legends.
-------------------
Each Global Note and Physical Note that constitutes a
Restricted Security shall bear the following legend (the "Pri-
vate Placement Legend") on the face thereof until February 6,
2000, unless otherwise agreed by the Company and the Holder
thereof:
THIS SECURITY 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 "QUALI-
FIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITU-
TIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURI-
TIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT
WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
37
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COM-
PLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
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 OR REGISTRAR), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COM-
PLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECU-
RITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURI-
TIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF
THE SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUS-
TEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANS-
FER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRA-
TION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend
on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECU-
RITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR
BY ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE
DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
38
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRE-
SENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHO-
RIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGIS-
TERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO ▇▇▇▇-
▇▇▇▇ OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANS-
FERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. Book-Entry Provisions
for Global Security.
---------------------
(a) The Global Note initially shall (i) be regis-
tered in the name of the Depository or the nominee of such
Depository, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear legends as set forth in Sec-
tion 2.15.
Members of, or participants in, the Depository
("Agent Members") shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the
Depository, or the Trustee as its custodian, or under the Glo-
bal Note, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Note 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 Depository or impair,
as between the Depository and its Agent Members, the operation
of customary practices governing the exercise of the rights of
a holder of any Note.
39
(b) Transfers of the Global Note shall be limited to
transfers in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of benefi-
cial owners in the Global Note may be transferred or exchanged
for Physical Notes in accordance with the rules and procedures
of the Depository and the provisions of Section 2.17. In addi-
tion, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global
Note if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Global
Note and a successor depositary is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a
written request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in the Global Note to bene-
ficial owners pursuant to paragraph (b), the Registrar shall
(if one or more Physical Notes are to be issued) 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 Physical Notes of
like tenor and amount.
(d) In connection with the transfer of the entire
Global Note to beneficial owners pursuant to paragraph (b), the
Global Note shall be deemed to be surrendered to the Trustee
for cancellation, and the Company shall execute, and the Trus-
tee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial
interest in the Global Note, an equal aggregate principal
amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted
Security delivered in exchange for an interest in the Global
Note pursuant to paragraph (b) or (c) shall, except as other-
wise provided by paragraphs (a)(i)(x) and (c) of Section 2.17,
bear the legend regarding transfer restrictions applicable to
the Physical Notes set forth in Section 2.15.
(f) The Holder of the Global Note may grant proxies
and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Inden-
ture or the Notes.
40
SECTION 2.17. Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited
---------------------------------------------
Investors and Non-U.S. Persons. The following provisions shall
------------------------------
apply with respect to the registration of any proposed transfer
of a Note constituting a Restricted Security to any Institu-
tional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer
of any Note constituting a Restricted Security,
whether or not such Note bears the Private
Placement Legend, if (x) the requested transfer is
after February 6, 2000 or (y) (1) in the case of a
transfer to an Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. Persons),
the proposed transferee has delivered to the
Registrar a certificate substantially in the form
of Exhibit C hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed
transferor has delivered to the Registrar a cer-
tificate substantially in the form of Exhibit D
hereto and such other information that the Trustee
may reasonably request in order to confirm that
such transaction is being made pursuant to an
exemption from or in a transaction not subject to
the registration requirements of 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
certificate, if any, required by paragraph (i)
above and (y) instructions given in accordance with
the Depository's and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and
records the date and (if the transfer does not involve a trans-
fer of outstanding Physical Notes) 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 (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Notes of
like tenor and amount.
(b) Transfers to QIBs. The following provisions
-----------------
shall apply with respect to the registration of any proposed
transfer of a Note constituting a Restricted Security to a QIB
(excluding transfers to Non-U.S. Persons):
41
(i) the Registrar shall register the transfer
if such transfer is being made by a proposed
transferor who has checked the box provided for on
the form of Note 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 has
signed the certification provided for on the form
of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is
purchasing the Note for its own account or an
account with respect to which it exercises sole
investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as
it has requested pursuant to Rule 144A or has
determined not to request such information and that
it is aware that the transferor is relying upon its
foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
and
(ii) if the proposed transferee is an Agent
Member, and the Notes to be transferred consist of
Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon
receipt by the Registrar of instructions given in
accordance with the Depository'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 Global Note in an
amount equal to the principal amount of the
Physical Notes to be transferred, and the Trustee
shall cancel the Physical Notes so transferred.
(c) Private Placement Legend. Upon the transfer,
------------------------
exchange or replacement of Notes not bearing the Private Place-
ment Legend, the Registrar shall deliver Notes that do not bear
the Private Placement Legend. Upon the transfer, exchange or
replacement of Notes bearing the Private Placement Legend, the
Registrar shall deliver only Notes that bear the Private Place-
ment Legend unless (i) the circumstance contemplated by para-
graph (a)(i)(x) of this Section 2.17 exist or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provi-
sions of the Securities Act.
42
(d) General. By its acceptance of any Note
-------
bearing the Private Placement Legend, each Holder of such a Note
acknowledges the restrictions on transfer of such Note set
forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to
Section 2.16 or this Section 2.17. The Company shall have the
right to inspect and make copies of all such letters, notices
or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to
Paragraph 6 of the Notes, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the princi-
pal amount of the Notes to be redeemed.
The Company shall give each notice provided for in
this Section 3.01 at least 60 days before the Redemption Date
(unless a shorter notice period shall be satisfactory to the
Trustee, as evidenced in a writing signed on behalf of the
Trustee), together with an Officers' Certificate stating that
such redemption shall comply with the conditions contained
herein and in the Notes.
SECTION 3.02 Selection of Notes To Be Redeemed.
---------------------------------
If fewer than all of the Notes are to be redeemed,
selection of the Notes to be redeemed will be made by the Trus-
tee 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 secu-
rities exchange, on a pro rata basis, by lot or in such other
--- ----
fair and reasonable manner chosen at the discretion of the
Trustee; provided, however, that if a partial redemption is
-------- -------
made with the proceeds of a Public Equity Offering, selection
of the Notes or portion thereof for redemption shall be made by
43
the Trustee only on a pro rata basis, unless such method is
--- ----
otherwise prohibited. The Company shall promptly notify the
Trustee and the Paying Agent in writing of the date of listing
and the name of the securities exchange if and when the Notes
are listed on a principal national securities exchange. The
Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify
the Company in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption,
the principal amount thereof to be redeemed. Notes in
denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or
any integral multiple thereof) of the principal of Notes that
have denominations larger than $1,000. Provisions of this
Indenture that apply to Notes called for redemption also apply
to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first class mail, postage prepaid, to
each Holder whose Notes are to be redeemed, with a copy to the
Trustee and any Paying Agent. At the Company's written
request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes
to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which
such redemption is being made;
(5) that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price
plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases 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 plus accrued
44
interest, if any, upon surrender to the Paying Agent of the
Notes redeemed;
(7) 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, and upon
surrender of such Note, a new Note or Notes in the
aggregate principal amount equal to the unredeemed portion
thereof will be issued; and
(8) if fewer than all the Notes are to be
redeemed, the identification of the particular Notes (or
portion thereof) to be redeemed, as well as the aggregate
principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such
partial redemption.
SECTION 3.04. Effect of Notice of Redemption.
-------------------------------
Once notice of redemption is mailed in accordance
with Section 3.03, Notes called for redemption become due and
payable on the Redemption Date and at the Redemption Price plus
accrued interest, if any. Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at
the Redemption Price (which shall include accrued interest
thereon to the Redemption Date), but installments of interest,
the maturity of which is on or prior to the Redemption Date,
shall be payable to Holders of record at the close of business
on the relevant record dates referred to in the Notes.
SECTION 3.05 Deposit of Redemption Price.
---------------------------
On or before 11:00 a.m. New York City time on the
Redemption Date, the Company shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price
plus accrued interest, if any, of all Notes to be redeemed on
that date. The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited which is not
required for that purpose, except with respect to monies owed
as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price plus accrued interest, if any, interest on the
Notes to be redeemed will cease to accrue on and after the
applicable Redemption Date, whether or not such Notes are pre-
sented for payment.
45
SECTION 3.06 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in
part, the Company shall execute and the Trustee shall authenti-
cate for the Holder a new Note or Notes equal in principal
amount to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Notes.
----------------
The Company shall pay the principal of and interest
on the Notes on the dates and in the manner provided in the
Notes and in this Indenture. An installment of principal of or
interest on the Notes shall be considered paid on the date it
is due if the Trustee or Paying Agent (other than the Company
or an Affiliate of the Company) holds on that date U.S. Legal
Tender designated for and sufficient to pay the installment in
full and is not prohibited from paying such money to the Hold-
ers pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments
are lawful, interest on overdue principal and on overdue
installments of interest (without regard to any applicable
grace periods) from time to time on demand at the rate borne by
the Notes plus 2% per annum. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
Notwithstanding anything to the contrary contained in
this Indenture, the Company may, to the extent it is required
to do so by law, deduct or withhold income or other similar
taxes imposed by the United States of America from principal or
interest payments hereunder.
SECTION 4.02 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency
required under Section 2.03. The Company shall give prior
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
46
may be made or served at the address of the Trustee set forth
in Section 11.02.
SECTION 4.03. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five and
Section 4.16, the Company shall do or cause to be done, at its
own cost and expense, all things necessary to preserve and keep
in full force and effect its corporate existence and the corpo-
rate existence of each of its Restricted Subsidiaries in accor-
dance with the respective organizational documents of each such
Restricted Subsidiary and the material rights (charter and
statutory) and franchises of the Company and each such
Restricted Subsidiary.
SECTION 4.04. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be
paid or discharged, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and
additions to taxes) levied or imposed upon it or any of its
Subsidiaries or properties of it or any of its Subsidiaries and
(ii) all lawful claims for labor, materials and supplies that,
if unpaid, might by law become a Lien upon the property of it
or any of its Subsidiaries; provided, however, that the Company
-------- -------
shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good
faith by appropriate proceedings properly instituted and dili-
gently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties
and Insurance.
--------------
(a) The Company shall, and shall cause each of its
Restricted Subsidiaries to, maintain its material properties in
good working order and condition (subject to ordinary wear and
tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively
conduct and carry on its business; provided, however, that
-------- -------
nothing in this Section 4.05 shall prevent the Company or any
of its Restricted Subsidiaries from discontinuing the operation
and maintenance of any of its properties, if such discontinu-
ance is, in the good faith judgment of the Board of Directors
of the Company or the Restricted Subsidiary, as the case may
47
be, desirable in the conduct of their respective businesses and
is not disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be pro-
vided, for itself and each of its Restricted Subsidiaries,
insurance (including appropriate self-insurance) against loss
or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate
for the conduct of the business of the Company and such
Restricted 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 customary, in
the good faith judgment of the Board of Directors of the Com-
pany, for companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate;
Notice of Default.
------------------
(a) The Company shall deliver to the Trustee, within
90 days after the end of the Company's fiscal year, an Officers'
Certificate stating that a review of its activities and
the activities of its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers
with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing
such certificate, that to the best of such Officer's knowledge
the Company during such preceding fiscal year has kept,
observed, performed and fulfilled each and every such covenant
and no Default or Event of Default occurred during such year
and at the date of such certificate there is no Default or
Event of Default that has occurred and is continuing or, if
such signers do know of such Default or Event of Default, the
certificate shall describe the Default or Event of Default and
its status with particularity. The Officers' Certificate shall
also notify the Trustee should the Company elect to change the
manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursu-
ant to Section 4.08 shall be accompanied by a written report of
the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit
of such financial statements nothing has come to their atten-
tion that would lead them to believe that the Company has vio-
lated any provisions of Article Four, Five or Six of this
Indenture insofar as they relate to accounting matters or, if
48
any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such
violation.
(c) (i) If any Default or Event of Default has
occurred and is continuing or (ii) if any Holder seeks to exer-
cise any remedy hereunder with respect to a claimed Default
under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 11.02 hereof,
by registered or certified mail or by telegram, telex or fac-
simile transmission followed by hard copy by registered or cer-
tified mail an Officers' Certificate specifying such event,
notice or other action within five Business Days of its becom-
ing aware of such occurrence.
SECTION 4.07. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its
Restricted Subsidiaries to comply, with all applicable stat-
utes, rules, regulations, orders and restrictions of the United
States of America, all states and municipalities thereof, and
of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing,
in respect of the conduct of their respective businesses and
the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to
have a material adverse effect on the financial condition or
results of operations of the Company and its Restricted Subsid-
iaries, taken as a whole.
SECTION 4.08. SEC Reports.
-----------
(a) So long as the Notes are outstanding, the Com-
pany (at its own expense) shall file with the SEC and shall
file with the Trustee within 15 days after it files them with
the SEC copies of the quarterly and annual reports and of the
information, documents, and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and
regulations prescribe) to be filed pursuant to Section 13 or
15(d) of the Exchange Act (without regard to whether the Com-
pany is subject to the requirements of such Section 13 or 15(d)
of the Exchange Act); provided that prior to the consummation
--------
of the Exchange Offer and the issuance of the Exchange Notes,
the Company (at its own expense) will mail to the Trustee and
Holders in accordance with paragraph (b) of this Section 4.08
49
substantially the same information that would have been
required by the foregoing documents within 15 days of when any
such document would otherwise have been required to be filed
with the SEC. Upon qualification of this Indenture under the
TIA, the Company shall also comply with the provisions of TIA
314(a).
(b) At the Company's expense, the Company shall
cause an annual report if furnished by it to stockholders gen-
erally and each quarterly or other financial report if fur-
nished by it to stockholders generally to be filed with the
Trustee and mailed to the Holders at their addresses appearing
in the register of Notes maintained by the Registrar at the
time of such mailing or furnishing to stockholders.
(c) The Company shall provide to any Holder any
information reasonably requested by such Holder concerning the
Company (including financial statements) necessary in order to
permit such Holder to sell or transfer Notes in compliance with
Rule 144A under the Securities Act.
SECTION 4.09. Waiver of Stay, Extension
or Usury Laws.
-------------------------
The Company covenants (to the extent that it may law-
fully do so) that it will not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advan-
tage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Notes as
contemplated herein, wherever enacted, now or at any time here-
after in force, or which may affect the covenants or the per-
formance of this Indenture; and (to the extent that it may law-
fully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hin-
der, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not cause or permit
any of its Restricted Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend or make any distribution (other
than dividends or distributions payable in Qualified Capital
Stock of the Company) on or in respect of shares of the Compa-
ny's Capital Stock to holders of such Capital Stock, (b) pur-
50
chase, redeem or otherwise acquire or retire for value any Cap-
ital Stock of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock,
(c) 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 Indebtedness of the Company
that is subordinate or junior in right of payment to the Notes
or (d) make any Investment (other than Permitted Investments)
(each of the foregoing actions set forth in clauses (a), (b)
(c) and (d) 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 or (ii) the Company is not able to
incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 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 deter-
mined reasonably and in good faith by the Board of Directors of
the Company) shall exceed the sum of: (w) 50% of the cumula-
tive Consolidated Net Income (or if cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss) of the Company
earned subsequent to the Issue Date and on or prior to the date
the Restricted Payment occurs (the "Reference Date") (treating
such period as a single accounting period); plus (x) 100% of
the aggregate net cash proceeds received by the Company from
any Person (other than a 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 Com-
pany; plus (y) without duplication of any amounts included in
clause (iii)(x) 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; plus (z) without dupli-
cation, the sum of (1) the aggregate amount returned in cash on
or with respect to Investments (other than Permitted Invest-
ments) made subsequent to the Issue Date whether through inter-
est payments, principal payments, dividends or other distribu-
tions or payments, (2) the net cash proceeds received by the
Company or any Restricted Subsidiary from the disposition of
all or any portion of such Investments (other than to a Subsid-
iary of the Company) and (3) upon redesignation of an Unre-
stricted Subsidiary as a Restricted Subsidiary, the fair market
value of such Subsidiary; provided, however, that with respect
-------- -------
to all Investments made in any Unrestricted Subsidiary or joint
venture, the sum of clauses (1), (2) and (3) above with respect
51
to such Investment shall not exceed the aggregate amount of
all such Investments made subsequent to the Issue Date in such
Unrestricted Subsidiary or joint venture.
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 acquisition of
any shares of Capital Stock of the Company, either (i) solely
in exchange for shares of Qualified Capital Stock of the Com-
pany or (ii) through the application of net proceeds of a sub-
stantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the
Company; (3) if no Default or Event of Default shall have
occurred and be continuing, the acquisition of any Indebtedness
of the Company that is subordinate or junior in right of pay-
ment to the Notes 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 Subsidiary of the Company) of (A)
shares of Qualified Capital Stock of the Company or (B) Refi-
nancing Indebtedness; (4) so long as no Default or Event of
Default shall have occurred and be continuing, payments for the
purpose of and in an amount equal to the amount required to
permit Holdings to redeem or repurchase Common Stock of Hold-
ings or options in respect thereof from employees or officers
of Holdings or any of its Subsidiaries or their estates or
authorized representatives upon the death, disability or termi-
nation of the employment of such employees or officers in an
aggregate amount not to exceed $3.0 million; (5) the making of
distributions, loans or advances in an amount not to exceed
$250,000 per annum sufficient to permit Holdings to pay the
ordinary operating expenses of Holdings related to Holdings'
ownership of Capital Stock of the Company (other than to the
Principals or their Related Parties); and (6) the payment of
any amounts pursuant to the Tax Allocation Agreement. In
determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of
the immediately preceding paragraph, amounts expended pursuant
to clauses (1), (2) and (4) shall be included in such
calculation and amounts expended pursuant to clauses (3), (5)
and (6) shall be excluded from such calculation.
Not later than the date of making any Restricted Pay-
ment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment complies with
52
this Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available
internal quarterly financial statements.
SECTION 4.11. Limitation on Transactions
with Affiliates.
--------------------------
(a) The Company shall not, and shall 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 pur-
chase, sale, lease or exchange of any property or the rendering
of any service) with, or for the benefit of, any of its Affili-
ates (each an "Affiliate Transaction"), other than (x) Affili-
ate Transactions permitted under paragraph (b) below and
(y) Affiliate Transactions on terms that are no less favorable
than those that might reasonably have been obtained in a compa-
rable 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 $250,000 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 or
payments to an Affiliate, as the case may be, of more than
$2.5 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, from an Independent Financial Advisor and file
the same with the Trustee.
(b) The foregoing restrictions shall not apply to
(i) reasonable fees, compensation and out-of-pocket expenses
paid to and indemnity provided on behalf of, officers, direc-
tors, 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; (ii)
53
transactions between or among the Company and any of its
Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries, provided that such transactions are
not otherwise prohibited by this Indenture; (iii) any 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 dis-
advantageous to the Holders in any material respect than the
original agreement as in effect on the Issue Date; (iv) any
Paribas Related Party acting as a lender under the Credit
Agreement or purchasing or holding any Notes; and (v)
Restricted Payments and Permitted Investments permitted by this
Indenture.
SECTION 4.12. Limitation on Incurrence
of Additional Indebtedness.
--------------------------
The Company shall not, and shall 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 continu-
ing at the time or as a consequence of the incurrence of any
such Indebtedness, the Company may incur Indebtedness (includ-
ing, without limitation, Acquired Indebtedness) and the
Restricted Subsidiaries of the Company 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 greater than 2.0 to 1.0.
SECTION 4.13. Limitation on Dividend and
Other Payment Restrictions
Affecting Subsidiaries.
--------------------------
The Company shall not, and shall not cause or permit
any of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or permit to exist or become effec-
tive any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (a) pay dividends or
make any other distributions on or in respect of its Capital
Stock; (b) 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 (c) transfer any of its property
54
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: (1) applicable law; (2) this
Indenture; (3) customary non-assignment provisions of any con-
tract or lease governing a leasehold or ownership interest of
any Restricted Subsidiary of the Company; (4) any instrument
governing Acquired Indebtedness, which encumbrance or restric-
tion 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; (5) agreements existing on
the Issue Date (including, without limitation, the Credit
Agreement) to the extent and in the manner such agreements are
in effect on the Issue Date; or (6) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in
clause (2), (4) or (5) above; provided, however, that the pro-
-------- -------
visions 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 con-
tained in agreements referred to in such clause (2), (4) or
(5).
SECTION 4.14. Prohibition on Incurrence of
Senior Subordinated Debt.
----------------------------
The Company shall not incur or suffer to exist
Indebtedness that is senior in right of payment to the Notes
and subordinate in right of payment to any other Indebtedness
of the Company.
SECTION 4.15. Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, the
Company shall make an offer to purchase all outstanding Notes
pursuant to the offer described in paragraph (b) below (the
"Change of Control Offer") at a purchase price equal to 101% of
the principal amount thereof plus accrued interest, if any, to
the date of purchase. Prior to the mailing of the notice
referred to below, but in any event within 30 days following
any Change of Control, the Company shall (i) repay in full and
terminate all commitments under Indebtedness under the Credit
Agreement and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full
and terminate all commitments under all Indebtedness under the
Credit Agreement and all other such Senior Debt and to repay
55
the Indebtedness owed to each lender which has accepted such
offer or (ii) obtain the requisite consents under the Credit
Agreement and all other Senior Debt to permit the repurchase of
the Notes as provided below. The Company shall first comply
with the covenant in the immediately preceding sentence before
it shall be required to repurchase Notes pursuant to the provi-
sions described in this Section 4.15. The Company's failure to
comply with the immediately preceding sentence shall constitute
an Event of Default under Section 6.01(3) and not under
Section 6.01(2).
(b) Within 30 days following the date upon which the
Change of Control occurred (the "Change of Control Date"), the
Company shall send, by first class mail, a notice to each
Holder, with a copy to the Trustee, which notice shall govern
the terms of the Change of Control Offer. The notice to the
Holders shall contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Change
of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered and not withdrawn will be accepted
for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 45
days from the date such notice is mailed, other than as may be required by
law) (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making pay-ment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Change of
Control Payment Date;
56
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall
--------
be in an original principal amount of $1,000 or integral multiples thereof;
and
(8) the circumstances and relevant facts regarding such Change
of Control.
On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Notes or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Notes so
tendered and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price plus accrued
interest, if any, and the Trustee shall promptly authenticate
and mail to such Holders new Notes equal in principal amount to
any unpurchased portion of the Notes surrendered. Any Notes
not so accepted shall be promptly mailed by the Company to the
Holder thereof. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes
pursuant to a Change of Control Offer shall be returned by the
Trustee to the Company.
The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regula-
tions are applicable in connection with the repurchase of Notes
pursuant to a Change of Control Offer. To the extent the pro-
visions of any securities laws or regulations conflict with
this Section 4.15, the Company shall comply with the applicable
57
securities laws and regulations and shall not be deemed to
have breached its obligations under this Section 4.15 by virtue
thereof.
SECTION 4.16. Limitation on Asset Sales.
-------------------------
(a) The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) 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); (ii) 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 (provided that the
--------
amount of any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Com-
pany 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 shall be deemed to
be cash for the purposes of this provision) and is received at
the time of such disposition; and (iii) upon the consummation
of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating
to such Asset Sale within 360 days of receipt thereof either
(A) to prepay any Senior Debt and, in the case of any Senior
Debt under any revolving credit facility, effect a permanent
reduction in the availability under such revolving credit
facility, (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
in the business of the Company and its Restricted Subsidiaries
as existing on the Issue Date or in businesses the same, simi-
lar or reasonably related thereto ("Replacement Assets"), or
(C) a combination of prepayment and investment permitted by the
foregoing clauses (iii)(A) and (iii)(B). Subject to the last
sentence of this paragraph, on the 361st 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 clause (iii)(A), (iii)(B) or (iii)(C) of the next pre-
ceding sentence (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 (iii)(A), (iii)(B) and (iii)(C) of the
next preceding sentence (each a "Net Proceeds Offer Amount")
58
shall be applied by the Company or such Restricted Subsidiary
to make an offer to purchase (the "Net Proceeds Offer") on a
date (the "Net Proceeds Offer Payment Date") not less than 30
nor more than 45 days following the applicable Net Proceeds
Offer Trigger Date, from all Holders on a pro rata basis, that
amount of Notes equal to the Net Proceeds Offer Amount at a
price equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, if any, to
the date of purchase; provided, however, that 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 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 covenant. 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 paragraph).
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 trans-
action permitted under Section 5.01, 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 Subsid-
iaries deemed to be sold shall be deemed to be Net Cash Pro-
ceeds for purposes of this Section 4.16
Each Net Proceeds Offer will be mailed to the record
Holders as shown on the register of Holders within 25 days fol-
lowing 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. To the
extent Holders properly tender Notes in an amount exceeding the
Net Proceeds Offer Amount, Notes of tendering Holders will be
purchased on a pro rata basis (based on amounts tendered). To
--- ----
59
the extent that the aggregate amount of Notes tendered
pursuant to a Net Proceeds Offer is less than the Net Proceeds
Offer Amount, the Company may use such excess Net Proceeds
Offer Amount for general corporate purposes or for any other
purpose not prohibited by this Indenture. Upon completion of
any such Net Proceeds Offer, the Net Proceeds Offer Amount
shall be reset at zero. A Net Proceeds Offer shall remain open
for a period of 20 business days or such longer period as may
be required by law.
(b) Subject to the deferral of the Net Proceeds
Offer Trigger Date contained in the second paragraph of subsec-
tion (a) above, each notice of a Net Proceeds Offer pursuant to
this Section 4.16 shall be mailed or caused to be mailed, by
first class mail, by the Company not more than 25 days after
the Net Proceeds Offer Trigger Date to all Holders at their
last registered addresses as of a date within 15 days of the
mailing of such notice, with a copy to the Trustee. The notice
shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Net Pro-
ceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.16
and that all Notes tendered will be accepted for payment; provided, however,
-------- -------
that if the aggregate principal amount of Notes tendered in a Net Proceeds
Offer exceeds the aggregate amount of the Net Proceeds Offer, the Company
shall select the Notes to be purchased on a pro rata basis (with such
--- ----
adjustments as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or multiples thereof shall be purchased);
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be 20 Business Days from the date of mailing
of notice of such Net Proceeds Offer, or such longer period as required by
law) (the "Proceeds Purchase Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Proceeds Purchase Date;
60
(5) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall
be in an original principal amount of $1,000 or integral multiples thereof;
On or before the Proceeds Purchase Date, the Company shall (i) accept
for payment Notes or portions thereof tendered pursuant to the Net Proceeds
Offer which are to be purchased in accordance with item (b)(1) above, (ii)
deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase
price plus accrued interest, if any, of all Notes to be purchased and (iii)
deliver to the Trustee Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to the Holders of Notes so accepted payment in an
amount equal to the purchase price plus accrued interest, if any. For purposes
of this Section 4.16, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Net
Proceeds Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
61
provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
SECTION 4.17 Limitation on Preferred Stock
of Restricted Subsidiaries.
-----------------------------
The Company shall not permit any of its Restricted Subsidiaries 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.
SECTION 4.18. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of its 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 (i) in the case of Liens securing
Indebtedness that is expressly subordinate or junior in right of payment to the
Notes, the Notes are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Liens and (ii) in all other cases, the Notes are
equally and ratably secured, except for (A) Liens existing as of the Issue Date
to the extent and in the manner such Liens are in effect as of the Issue Date;
(B) Liens securing Senior Debt and Liens on assets of Restricted Subsidiaries
securing guarantees of Senior Debt; (C) Liens securing the Notes; (D) Liens of
the Company or a Wholly Owned Restricted Subsidiary of the Company on assets of
any Restricted Subsidiary of the Company; (E) Liens securing Refinancing
Indebtedness which is incurred to Refinance 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 (A) are no less favorable to the Holders and are no more favorable to the
lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced and (B) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced; and (F) Permitted Liens.
62
SECTION 4.19. Limitation of Guarantees
by Restricted Subsidiaries.
--------------------------
The Company shall not permit any of its domestic Restricted
Subsidiaries, directly or indirectly, by way of the pledge of any intercompany
note or otherwise, to assume, guarantee or in any other manner become liable
with respect to any Indebtedness of the Company or any other Restricted
Subsidiary (other than (A) Indebtedness and other obligations under the Credit
Agreement, (B) Permitted Indebtedness of a Restricted Subsidiary, (C) Senior
Debt that is incurred in reliance on clause (xiv) of the definition of
"Permitted Indebtedness" and that is secured, (D) Indebtedness under Currency
Agreements incurred in reliance on clause (v) of the definition of Permitted
Indebtedness or (E) Interest Swap Obligations incurred in reliance on clause
(iv) of the definition of Permitted Indebtedness), unless, in any such case (a)
such Restricted Subsidiary executes and delivers a supplemental indenture to
this Indenture, providing a guarantee of payment of the Notes by such Restricted
Subsidiary (the "Guarantee") and (b) (x) if any such assumption, guarantee or
other liability of such Restricted Subsidiary is provided in respect of Senior
Debt, the guarantee or other instrument provided by such Restricted Subsidiary
in respect of such Senior Debt may be superior to the Guarantee pursuant to
subordination provisions no less favorable to the Holders of the Notes than
those contained in this Indenture and (y) if such assumption, guarantee or other
liability of such Restricted Subsidiary is provided in respect of Indebtedness
that is expressly subordinated to the Notes, the guarantee or other instrument
provided by such Restricted Subsidiary in respect of such subordinated
Indebtedness shall be subordinated to the Guarantee pursuant to subordination
provisions no less favorable to the Holders of the Notes than those contained in
this Indenture.
Notwithstanding the foregoing, any such Guarantee of the Notes by a
Restricted Subsidiary of the Company shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon: (i) the
unconditional release of such Restricted Subsidiary from its liability in
respect of the Indebtedness in connection with which such Guarantee was executed
and delivered pursuant to the preceding paragraph; or (ii) any sale or other
disposition (by merger or otherwise) to any Person which is not a Restricted
Subsidiary of the Company, of all of the Company's Capital Stock in, or all or
substantially all of the assets of,
63
such Restricted Subsidiary; provided that (a) such sale or disposition of such
Capital Stock or assets is otherwise in compliance with the terms of this
Indenture and (b) such assumption, guarantee or other liability of such
Restricted Subsidiary has been released by the holders of the other Indebtedness
so guaranteed.
SECTION 4.20. Conduct of Business.
-------------------
The Company and its Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or reasonably related to the
businesses in which the Company and its Restricted Subsidiaries are engaged on
the Issue Date.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation
and Sale of Assets.
---------------------
(a) The Company shall not, in a single transaction or a series of
related transactions, consolidate with 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 its Restricted
Subsidiaries) to any Person whether as an entirety or substantially as an
entirety 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 its 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), executed and delivered to the Trustee, the due
and punctual payment of the principal of and premium, if
64
any, and interest on all of the Notes and the performance of every covenant
of the Notes, this Indenture and, if applicable, the Registration Rights
Agreement on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(B)(y) above (including giving effect to
any Indebtedness and 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, shall be able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.12; and
(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 and
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 and be continuing; and
(4) the Company or the Surviving Entity, as the case may be, 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.
(b) 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 and 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.
(c) Notwithstanding the foregoing, (i) the merger of the Company with
and into ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Floorcoverings, Inc. on the Issue Date and (ii) the
merger of the Company with an
65
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction shall be permitted and in the case of (i) above, such
transaction shall not require any Opinion of Counsel.
SECTION 5.02 Successor Corporation Substituted.
---------------------------------
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 successor
Person 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.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Notes when the same becomes
due and payable and the Default continues for a period of 30 days (whether or
not such payment shall be prohibited by Article Ten of this Indenture); or
(2) the Company fails to pay the principal on any Notes 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) (whether or not such
payment shall be prohibited by Article Ten); or
(3) the Company defaults in the observance or performance of any other
covenant or agreement contained in this Indenture and which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
66
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes; or
(4) the Company fails to pay at final stated maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness for borrowed money of the Company or any Restricted
Subsidiary of the Company, and such failure continues for a period of 20 days
or more, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise
cured within 20 days of receipt by the Company or such Restricted Subsidiary
of notice of any such acceleration) 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 stated maturity
or which has been accelerated, in each case with respect to which the 20-day
period described above has passed, aggregates $5.0 million or more at any
time; or
(5) one or more judgments for the payment of money in an aggregate
amount in excess of $5.0 million shall have been rendered against the Company
or any of its Restricted Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; or
(6) the Company or any Significant Subsidiary of the Company (A)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or order
for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or for
substantially all of its property, (D) consents to or acquiesces in the
institution of a bankruptcy or an insolvency proceeding against it, (E) makes
a general assignment for the benefit of its creditors, or (F) takes any
corporate action to authorize or effect any of the foregoing; or
(7) a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company or any Significant Subsidiary of the
Company in an involuntary case or proceeding under any Bankruptcy Law, which
shall (A) approve as properly filed a petition seeking
67
reorganization, arrangement, adjustment or composition in respect of the
Company or any such Significant Subsidiary, (B) appoint a Custodian of the
Company or any such Significant Subsidiary or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs; and such
judgment, decree or order shall remain unstayed and in effect for a period of
60 consecutive days.
SECTION 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified in
Section 6.01(6) or (7) with respect to the Company) occurs and is continuing and
has not been waived pursuant to Section 6.04, then the Trustee or the Holders of
at least 25% in principal amount of outstanding Notes may declare the principal
of and accrued interest on all the Notes to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under the Credit Agreement, shall become immediately due
and payable upon the first to occur of an acceleration under the Credit
Agreement or 5 business days after receipt by the Company and the Representative
under the Credit Agreement of such Acceleration Notice but only if such Event of
Default is then continuing. Upon any such declaration, but subject to the
immediately preceding sentence, such amount shall be immediately due and
payable.
(b) If an Event of Default specified in Section 6.01(6) or (7) occurs
and is continuing with respect to the Company, all unpaid principal of and
premium, if any, and accrued and unpaid interest on all of the outstanding Notes
shall ipso facto become and be immediately due and payable without any
---- -----
declaration or other act on the part of the Trustee or any Holder.
(c) At any time after a declaration of acceleration with respect to the
Notes in accordance with Section 6.02(a), the Holders of a majority in principal
amount of the Notes may, on behalf of the Holders of all of the Notes, rescind
and cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) 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, (iii) to the extent the payment
of
68
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in Section 6.01(6) or (7), the Trustee
shall have received an Officers' Certificate and an Opinion of Counsel that such
Event of Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. The Holders of a
majority in principal amount of the Notes may waive any existing 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.
SECTION 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority
in principal amount of the outstanding Notes by notice to the Trustee may waive
an existing Default or Event of Default and its consequences, except a Default
in the payment of principal of or interest on any Note as specified in clauses
(1) and (2) of Section 6.01. When a Default or Event of Default is waived, it is
cured and ceases.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Notes may direct the time,
69
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it, including, without
limitation, any remedies provided for in Section 6.03. Subject to Section 7.01,
however, the Trustee may refuse to follow any direction that the Trustee
reasonably believes conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Holder, or that
may involve the Trustee in personal liability; provided that the Trustee may
--------
take any other action deemed proper by the Trustee which is not inconsistent
with such direction; and provided further that this provision shall not affect
-------- -------
the rights of the Trustee set forth in Section 7.01(d).
SECTION 6.06. Limitation on Suits.
-------------------
A Holder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(2) Holders of at least 25% in principal amount of the outstanding Notes
make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity in its sole discretion
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which, in
the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
70
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest
specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Notes for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest at the rate set forth in Section
4.01 and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, consultants and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings 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, taxes, disbursements and advances of the Trustee, its
agents, consultants and counsel, and any other amounts due the Trustee under
Section 7.07. The Company's payment obligations under this Section 6.09 shall be
secured in accordance with the provisions of Section 7.07
71
hereunder. 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 thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company directly
without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for principal
and interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal and interest,
respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a
72
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in
this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it
73
is proved that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not herein expressly provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note or other paper or document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate, an Opinion of Counsel or
both, which shall conform to Sections 11.04 and 11.05. 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.
74
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys and the Trustee shall not be responsible for the
misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to the
Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee in its sole discretion against the costs,
expenses and liabilities which may be incurred by it in compliance with such
request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it
75
were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The recitals contained herein and in the Notes shall be taken as
statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or on the Proceeds Purchase Date pursuant
to a Net Proceeds Offer and, except in the case of a failure to comply with
Article Five hereof, the Trustee may withhold the notice if and so long as its
Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15, the Trustee shall, to the extent
that any of the events described in TIA 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as of
such date that complies with TIA 313(a). The Trustee also shall comply with TIA
313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each stock exchange, if any, on
which the Notes are listed.
76
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA (S)313(d).
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. 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 upon request for all reasonable fees and expenses,
including out-of-pocket expenses incurred or made by it in con-nection with the
performance of its duties under this Inden-ture. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents, consultants and counsel.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the administration of this trust including
the reasonable costs and expenses of defending themselves against any claim or
liability in connec-tion with the exercise or performance of any of their
rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. At the Trustee's sole discretion, the Company shall defend the claim
and the Trustee shall cooperate and may participate in the defense; provided
that any settlement of a claim shall be approved in writing by the Trus-tee.
Alternatively, the Trustee may at its option have sepa-rate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel; provided that the Company will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its
77
capacity as Trustee, except assets or money held in trust to pay principal of or
interest on particular Notes. The Trust-ee's right to receive payment of any
amounts due under this Section 7.07 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Notes may be sub-
ordinate to such other liability or indebtedness).
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
-------- -------
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstand-ing Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Com-pany may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) 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 notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
succes-sor Trustee takes office, the Holders of a majority in princi-pal amount
of the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written accep-tance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the res-
ignation or removal of the retiring Trustee shall become effec-tive, and the
successor Trustee shall have all the rights,
78
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviv-ing or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirement
of TIA (SS)310(a)(1), (2) and (5). The Trustee (or, in the case of a corporation
included in a bank holding company system, the related bank holding company)
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition. In addition, if the
Trustee is a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital requirements
of TIA (S)310(a)(2). The Trustee shall comply with (SS)TIA 310(b); provided,
--------
however, that there shall be excluded from the operation of (SS)TIA 310(b)(1)
-------
any indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
79
outstanding, if the requirements for such exclusion set forth in (S)TIA
310(b)(1) are met. The provisions of TIA 310 shall apply to the Company, as
obligor of the Notes.
SECTION 7.11. Preferential Collection of
Claims Against Company.
--------------------------
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been removed
shall be subject to TIA (S)311(a) to the extent indicated therein. The
provisions of TIA (S)311 shall apply to the Company, as obligor on the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Termination of the
Company's Obligations.
---------------------
The Company may terminate its obligations under the Notes and this
Indenture, except those obligations referred to in the penultimate paragraph of
this Section 8.01, if all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes which have been replaced or paid or Notes
for whose payment U.S. Legal Tender has theretofore been deposited with the
Trustee or the Paying Agent in trust or segre-gated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 8.05) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(a) either (i) pursuant to Article Three, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of the
redemption of all of the Notes under arrangements satisfactory to the Trustee
for the giving of such notice or (ii) all Notes have otherwise become due and
payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be deposited
with the Trustee or a trustee satisfactory to the Trustee, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust solely for the benefit of the Holders for
that purpose, U.S. Legal Tender
80
in such amount as is sufficient without consideration of reinvestment of such
interest, to pay principal of, premium, if any, and interest on the
outstanding Notes to maturity or redemption; provided that the Trustee shall
--------
have been irrevocably instructed to apply such U.S. Legal Tender to the
payment of said principal, premium, if any, and interest with respect to the
Notes and, provided, further, that from and after the time of deposit, the
-------- -------
money deposited shall not be subject to the rights of holders of Senior Debt
pursuant to the provisions of Article Ten;
(c) no Default or Event of Default with respect to this Indenture or the
Notes shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument
to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it hereunder;
and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Company's
obligations under the Notes and this Indenture have been complied with. Such
Opinion of Counsel shall also state that such satisfaction and discharge does
not result in a default under the Credit Agreement (if then in effect) or any
other agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall
survive until the Notes are no longer outstanding pursuant to the last paragraph
of Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trus-tee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
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SECTION 8.02. Legal Defeasance and Covenant Defeasance.
----------------------------------------
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, elect to have either paragraph
(b) or (c) below be applied to all outstanding Notes upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a)
hereof of the option applicable to this paragraph (b), the Company shall,
subject to the satisfaction of the conditions set forth in Section 8.03, be
deemed to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.04 hereof and the other
Sections of this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), and Holders of the Notes and any amounts
deposited under Section 8.03 hereof shall cease to be subject to any obliga-
tions to, or the rights of, any holder of Senior Debt under Article Ten or
otherwise, except for the following provisions, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of and interest on such Notes when such payments are due, (ii) the
Company's obligations with respect to such Notes under Article Two and Section
4.02 hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in con-nection therewith and
(iv) this Article Eight. Subject to com-pliance with this Article Eight, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exer-cise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03 hereof, be released
from its obligations under the covenants contained in Sections 4.10 through 4.20
and
82
Article Five hereof with respect to the outstanding Notes on and after the date
the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
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) and Holders of the Notes and any amounts deposited under Section 8.03
hereof shall cease to be subject to any obligations to, or the rights of, any
holder of Senior Debt under Article Ten or otherwise. For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by rea son 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 or Default under Section 6.01(3) 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 paragraph
(a) hereof of the option applicable to this paragraph (c), subject to the
satisfaction of the conditions set forth in Section 8.03 hereof, Sections
6.01(3), 6.01(4) and 6.01(5) shall not constitute Events of Default.
SECTION 8.03. Conditions to Legal Defeasance
or Covenant Defeasance.
------------------------------
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment on
the Notes, U.S. Legal Tender, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a
83
nationally recognized firm of independent public accountants, 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, of such principal or installment of principal of or
interest on the Notes; provided that the Trustee shall have received an
irrevocable written order from the Company instructing the Trustee to
apply such U.S. Legal Tender or the proceeds of such U.S. Government
Obligations to said payments with respect to the Notes;
(b) in the case of an election under Section 8.02(b) hereof, 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 of the Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.02(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Notes shall have occurred and be continuing on the date
of such deposit (other than a Default or Event of Default result-ing
from the incurrence of Indebtedness all or a portion of the proceeds of
which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(6) and
6.01(7)
84
hereof are concerned, at any time in the period ending on the
91st day after the date of such deposit;
(e) 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;
(f) 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;
(g) 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
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to
any rights of any holders of Senior Debt, including, without limitation,
those arising under this Indenture, and (ii) assuming no intervening
bankruptcy or insolvency of the Company between the date of deposit and
the 91st day following the deposit and that no Holder is an insider of
the Company, after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable Bankruptcy Law.
SECTION 8.04. Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Article Eight, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Notes. The Trustee shall be under no obli-gation to invest said
U.S. Legal Tender or U.S. Government Obligations except as it may agree with the
Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed
85
against the U.S. Legal Tender or U.S. Government Obligations deposited pursuant
to Section 8.03 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 Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U. S. Government Obligations held by it as
provided in Section 8.03 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.05. Repayment to the Company.
------------------------
Subject to Article Eight, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided that the
--------
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company, Holders entitled to such money must
look to the Company for payment as general creditors unless an applicable law
designates another Person.
SECTION 8.06. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Article Eight by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and
86
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Article Eight until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Article Eight; provided that if the Company has made any payment
--------
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that such
--------
amendment or supplement does not, in the opinion of the Trustee, adversely
affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any addi-tional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder;
(6) to provide for issuance of the Exchange Notes, which will have terms
substantially identical in all material respects to the Initial Notes (except
that the transfer restrictions contained in the Initial Notes will be
modified or eliminated, as appropriate), and which will be
87
treated together with any outstanding Initial Notes, as a single issue of
securities; or
(7) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any Holders
hereunder; provided that the Company has delivered to the Trustee an Opinion
--------
of Counsel stating that such amendment or supplement complies with the
provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, may amend or supplement this Indenture or the Notes, without notice to
any other Holders. Subject to Section 6.07, the Holder or Holders of a majority
in aggregate principal amount of the outstanding Notes may waive compliance by
the Company with any provision of this Indenture or the Notes without notice to
any other Holder. No amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, shall, without the consent of each Holder of each Note
affected thereby:
(1) reduce the amount of Notes 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 repurchase, or reduce the redemption or repurchase
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 Note
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
88
Notes to waive Defaults or Events of Default, other than ones with respect to
the payment of principal of or interest on the Notes;
(6) amend, modify, change or waive any provision of this Section 9.2;
(7) amend, modify or change in any material respect the obligation of
the Company to make or consummate a Change of Control Offer in the event of a
Change of Control or make and consummate a Net Proceeds Offer in respect of
any Asset Sale that has been consummated or modify any of the provisions or
definitions with respect thereto after a Change of Control has occurred or
the subject Asset Sale has been consummated; or
(8) modify Article Ten or the definitions used in Article Ten to
adversely affect the Holders of the Notes in any material respect.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders 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 supplemental indenture.
SECTION 9.03. Effect on Senior Debt.
---------------------
No amendment of this Indenture shall adversely affect the rights of
any holder of Senior Debt under Article Ten of this Indenture, without the
consent of such holder.
SECTION 9.04. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
89
SECTION 9.05. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder 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. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (8) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every subse
▇▇▇▇▇ ▇▇▇▇▇▇ of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that any such waiver shall not impair or
--------
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
SECTION 9.06. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of such Note to deliver it to the Trustee.
The Trustee may place an
90
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
Note that reflects the changed terms. Any such notation or exchange shall be
made at the sole cost and expense of the Company.
SECTION 9.07. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided that the Trustee may, but shall not be
--------
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Inden ture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each stating that the execution
of any amendment, supplement or waiver authorized pursuant to this Article Nine
is authorized or permitted by this Indenture. Such Opinion of Counsel shall not
be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01 Notes Subordinated to Senior Debt.
---------------------------------
The Company covenants and agrees, and each Holder of the Notes, by
its acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations on the Notes by
the Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents of all Obligations on the Senior Debt; that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
91
SECTION 10.02. No Payment on Notes in
Certain Circumstances.
----------------------
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt, no
payment of any kind or character shall be made by, or on behalf of, the Company
or any other Person on its or their behalf with respect to any Obligations on
the Notes, or to acquire any of the Notes for cash or property or otherwise. In
addition, if any other event of default occurs and is continuing with respect to
any Designated Senior Debt, as such event of default is defined in the
instrument creating or evidencing such Designated Senior Debt, permitting the
holders of such Designated Senior Debt then outstanding to accelerate the
maturity thereof and if the Representative for the respective issue of
Designated Senior Debt gives notice of the event of default to the Trustee (a
"Default Notice"), then, unless and until all events of default have been cured
or waived or have ceased to exist or the Trustee receives notice thereof from
the Representative for the respective issue of Designated Senior Debt
terminating the Blockage Period (as defined below), during the 180 days after
the delivery of such Default Notice (the "Blockage Period"), neither the Company
nor any other Person on its behalf shall (x) make any payment of any kind or
character with respect to any Obligations on the Notes or (y) acquire any of the
Notes for cash or property or otherwise. Notwithstanding anything herein to the
contrary, in no event will a Blockage Period extend beyond 180 days from the
date the payment on the Notes was due and only one such Blockage Period may be
commenced within any 360 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any Blockage Period with
respect to the Designated Senior Debt shall be, or be made, the basis for the
commencement of a second Blockage Period by the Representative of such
Designated Senior Debt whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days (it being acknowledged that any subsequent action,
or any breach of any financial covenants for a period commencing after the date
of commencement of such Blockage Period that, in either case, would give rise to
an event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
92
(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by
Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Debt thereafter due or declared to be due
--------
shall first be paid in full in cash or Cash Equivalents before the Holders are
entitled to receive any payment of any kind or character with respect to
Obligations on the Notes.
SECTION 10.03. Payment Over of Proceeds
upon Dissolution, Etc.
------------------------
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, windingup, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Debt shall
first be paid in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations on
the Notes, or for the acquisition of any of the Notes for cash or property or
otherwise. Upon any such dissolution, windingup, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Notes or the Trustee under this Indenture would be
entitled, except
93
for the provisions hereof, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders or by the Trustee under this
Indenture if received by them, directly to the holders of Senior Debt (pro rata
to such holders on the basis of the respective amounts of Senior Debt held by
such holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of Senior Debt remaining unpaid until all such Senior Debt has been paid in full
in cash or Cash Equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf of
the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by this Section 10.03(c), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (pro rata to such holders on the
basis of the respective amount of Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
94
(d) The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in Article
Five hereof and as long as permitted under the terms of the Senior Debt shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04. Payments May Be Paid Prior
to Dissolution.
--------------------------
Nothing contained in this Article Ten or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Sections 10.02 and 10.03, from making payments at any time for the purpose of
making payments of principal of and interest on the Notes, or from depositing
with the Trustee any moneys for such payments, or (ii) in the absence of actual
knowledge by the Trustee that a given payment would be prohibited by Section
10.02 or 10.03, the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of, and interest on, the
Notes to the Holders entitled thereto unless at least two Business Days prior
to the date upon which such payment would otherwise become due and payable a
Trust Officer shall have actually received the written notice provided for in
the second sentence of Section 10.02(a) or in Section 10.07 (provided that,
notwithstanding the foregoing, such application shall otherwise be subject to
the provisions of the first sentence of Section 10.02(a) and Section 10.03). The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 10.05. Subrogation.
-----------
Subject to the payment in full in cash or Cash Equivalents of
all Senior Debt, the Holders of the Notes shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
Notes shall be paid in full; and, for the purposes of such subrogation, no such
payments or distributions to the holders of the Senior Debt by or on behalf of
the Company or by or on behalf of the Holders by virtue of this Article Ten
which
95
otherwise would have been made to the Holders shall, as between
the Company and the Holders of the Notes, be deemed to be a payment by the
Company to or on account of the Senior Debt, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Debt, on the other hand.
SECTION 10.06. Obligations of the Company
Unconditional.
--------------------------
Nothing contained in this Article Ten or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as among the Company,
its creditors other than the holders of Senior Debt, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and any interest on the Notes as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Holder of any Note or the Trustee on its behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Debt or a
Representative therefor, together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.
96
In the event that the Trustee determines in good faith that any evidence
is required with respect to the right of any Person as a holder of Senior Debt
to participate in any payment or distribution pursuant to this Article Ten, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amounts of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 10.08. Reliance on Judicial Order or
Certificate of Liquidating Agent.
---------------------------------
Upon any payment or distribution of assets of the Company referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
---------------------------------
The Trustee and any agent of the Company or the Trustee shall
be entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this
97
Article Ten, and no implied covenants or obligations with respect to the holders
of Senior Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt.
Whenever a distribution is to be made or a notice given to
holders or owners of Senior Debt, the distribution may be made and the notice
may be given to their Representative, if any.
SECTION 10.10 Subordination Rights Not Impaired
by Acts or Omissions of the Company
or Holders of Senior Debt.
-----------------------------------
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt, or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To
Effectuate Subordination of Notes.
---------------------------------
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take
98
such action as may be necessary or appropriate to effectuate, as between the
holders of Senior Debt and the Holders of Notes, the subordination provided in
this Article Ten, and appoints the Trustee its attorney-infact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its Notes and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Debt or their Representative 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 thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.12 This Article Ten Not To
Prevent Events of Default.
-------------------------
The failure to make a payment on account of principal of or interest on
the Notes by reason of any provision of this Article Ten will not be construed
as preventing the occurrence of an Event of Default.
SECTION 10.13 Trustee's Compensation
Not Prejudiced.
----------------------
Nothing in this Article Ten will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
99
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 11.02. Notices.
-------
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by commercial courier service, by telex, by telecopier or registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Company:
CAF Acquisition Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇▇▇▇▇
Attn: President
with a copy to:
CAF Holdings, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
if to the Trustee:
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Each of the Company and the Trustee by written notice to each
other such Person may designate additional or different addresses for notices to
such Person. Any notice or
100
communication to the Company or the Trustee shall be deemed to have been given
or made as of the date so delivered if personally delivered; when receipt is
confirmed if delivered by commercial courier service; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five (5) calendar days
after mailing if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
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, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders
with Other Holders.
-------------------------
Holders may communicate pursuant to TIA 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA (S)312(c).
SECTION 11.04. Certificate and Opinion as
to Conditions Precedent.
--------------------------
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent to be performed by the Company, if any,
provided for in this
101
Indenture relating to the proposed action have been complied with.
SECTION 11.05. Statements Required in
Certificate or Opinion.
----------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying
Agent, Registrar.
------------------------
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of payment is
a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
102
SECTION 11.08 Governing Law.
---------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO 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 INDENTURE.
SECTION 11.09. No Adverse Interpretation
of Other Agreements.
-------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or incorporator, as
such, of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. Such waiver
and release are part of the consideration for the issuance of the Notes.
SECTION 11.11 Successors.
----------
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.12 Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together shall represent
the same agreement.
SECTION 11.13. Severability.
------------
In case any one or more of the provisions in this Indenture or
in the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every
103
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
Issuer:
CAF ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title: President
Trustee:
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name:
Title: Vice President
EXHIBIT A
---------
CUSIP No.:
CAF ACQUISITION CORPORATION
10% SENIOR SUBORDINATED NOTE DUE 2007
No. $
CAF ACQUISITION CORPORATION, a Virginia corporation (the
"Company," which term includes any successor entity), for value
received promises to pay to or registered
assigns, the principal sum of Dollars, on January 15, 2007.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or
imprinted hereon.
CAF ACQUISITION CORPORATION
By:
Name:
Title:
By:
Name:
Dated: February 6, 1997 Title:
Certificate of Authentication
This is one of the 10% Senior Subordinated Notes due 2007
referred to in the within-mentioned Indenture.
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Trustee
Dated: February 6, 1997 By:
Authorized Signatory
(REVERSE OF SECURITY)
% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. CAF ACQUISITION CORPORATION, a Virginia corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from February 6, 1997. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing July 15, 1997. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and on
overdue installments of interest from time to time on demand at the rate borne
by the Notes plus 2% per annum and on overdue installments of interest (without
regard to any applicable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by its check payable in such
U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company, a New York banking corporation (the "Trustee"), will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated as of
February 6, 1997 (the "Indenture"), between the Company and the Trustee. This
Note is one of a duly authorized issue of Initial Notes of the Company
designated as its 10% Senior Subordinated Notes due 2007 (the "Initial Notes").
The Notes are limited in aggregate principal amount to $100,000,000. The Notes
include the Initial Notes and the Exchange Notes, as defined below, issued in
exchange for the Initial Notes pursuant to the Indenture. The Initial Notes and
the Exchange Notes are treated as a single class of securities under the
Indenture. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. 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 (15 U.S. Code 77aaa-77bbbb) (the "TIA"), as in effect on
the date of the Indenture. Notwithstanding anything to the contrary herein, the
Notes are subject to all such terms, and Holders of Notes are referred to the
Indenture and said Act for a statement of them. The Notes are general unsecured
obligations of the Company.
5. Subordination. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Senior Debt of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-infact for such purposes.
6. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the Company's
option, in whole at any time or in part from time to time, on and after January
15, 2002, upon not less than 30 nor more than 60 days' notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 15 of the year set
forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption:
Year Percentage
2002 105.000%
2003 103.333%
2004 101.667%
2005 and thereafter 100.000%
(b) Optional Redemption Upon Public Equity Offerings. At any time, or from
time to time, on or prior to January 15, 2000, the Company may, at its option,
use the net cash proceeds of one or more Public Equity Offerings (as defined in
the Indenture) to redeem up to 35% of the aggregate principal amount of Notes
originally issued at a redemption price equal to 110% of the principal amount
thereof plus, in each case, accrued interest to the date of redemption; provided
that at least 65% of the principal amount of Notes originally issued remains
outstanding immediately after any such redemption.
In order to effect the foregoing redemption with the proceeds of
any Public Equity Offering, the Company shall make such redemption not more than
120 days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Notes called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Notes will be to receive payment of the Redemption Price plus accrued and unpaid
interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights Agreement (as
defined in the Indenture), the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right
to exchange this Note for the Company's Series B 10% Senior Subordinated Notes
due 2007 (the "Exchange Notes"), which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects to the Initial Notes. The Holders of the Initial Notes 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.
10. Denominations; Transfer; Exchange. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be treated
as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to, among other things,
incur additional Indebtedness, make payments in respect of its Capital Stock or
certain Indebtedness, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries, merge or consolidate with
any other Person, sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
16. Successors. When a successor assumes, in accordance with the Indenture,
all the obligations of its predecessor under the Notes and the Indenture, the
predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of
Notes then outstanding may declare all the Notes to be due and payable in the
manner, at the time and with the effect provided in the Indenture. Holders of
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the Notes
unless it has received indemnity reasonably satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Notes then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer, employee
or incorporator, as such, of the Company shall have any liability for any
obligation 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 of a Note 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.
20. Authentication. This Note shall not be valid
until the Trustee or Authenticating Agent manually signs the
certificate of authentication on this Note.
21. Governing Law. The Laws of the State of New
York shall govern this Note and the Indenture, without regard
to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary
abbreviations may be used in the name of a Holder of a Note 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).
23. 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 as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the
other identification numbers printed hereon.
24. Indenture. Each Holder, by accepting a Note,
agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time.
The Company will furnish to any Holder of a Note upon
written request and without charge a copy of the Indenture,
which has the text of this Note in larger type. Requests may
be made to: CAF Acquisition Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President.
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
agent to transfer this Note on the books of the Company. The
agent may substitute another to act for him.
Date: ___________________ Signed: ____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: ____________________________
In connection with any transfer of this Note occur-
ring prior to the date which is the earlier of (i) the date of
the declaration by the SEC of the effectiveness of a registra-
tion statement under the Securities Act of 1933, as amended
(the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at
the date of the transfer) and (ii) February 6, 2000, the under-
signed confirms that it has not utilized any general solicita-
tion or general advertising in connection with the transfer and
that this Note is being transferred:
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) __ to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securi-
ties Act) that has furnished to the Trustee a signed
letter containing certain representations and agree-
ments (the form of which letter can be obtained from
the Trustee); or
(4) __ outside the United states to a "foreign person" in
compliance with Rule 904 of Regulation S under the Securities
Act; or
(5) __ pursuant to the exemption from registration provided
by Rule 144 under the Securities Act; or
(6) __ pursuant to an effective registration statement under
the Securities Act; or
(7) __ pursuant to another available exemption from the reg-
istration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the
name of any person other than the registered Holder thereof;
provided that if box (3), (4), (5) or (7) is checked, the Com-
pany or the Trustee may require, prior to registering any such
transfer of the Notes, in its sole discretion, such legal opin-
ions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or
the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of
the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Reg-
istrar shall not be obligated to register this Note in the name
of any person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth
herein and in Section 2.17 of the Indenture shall have been
satisfied.
Dated: __________________ Signed: ____________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with
respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such informa-
tion regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to
claim the exemption from registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the
Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.15 or Section
4.16 of the Indenture, state the amount you elect to have
purchased:
$___________________
Dated: __________________ ____________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: ____________________________________
EXHIBIT B
---------
CUSIP No.:
CAF ACQUISITION CORPORATION
SERIES B 10% SENIOR SUBORDINATED NOTE DUE 2007
No. $
CAF ACQUISITION CORPORATION, a Virginia corporation
(the "Company," which term includes any successor entity), for
value received promises to pay to or reg-
istered assigns, the principal sum of Dollars, on
January 15, 2007.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Reference is made to the further provisions of this
Note contained herein, which will for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized
officers and a facsimile of its corporate seal to be affixed
hereto or imprinted hereon.
CAF ACQUISITION CORPORATION
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Dated: Title:
Certificate of Authentication
This is one of the Series B 10% Senior Subordinated
Notes due 2007 referred to in the within-mentioned Indenture.
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Trustee
Dated: By:
------------------------------
Authorized Signatory
B-1
(REVERSE OF SECURITY)
SERIES B 10% SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. CAF ACQUISITION CORPORATION, a Vir-
--------
ginia corporation (the "Company"), promises to pay interest on
the principal amount of this Note at the rate per annum shown
above. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has
been paid, from February 6, 1997. The Company will pay inter-
est semi-annually in arrears on each Interest Payment Date,
commencing July 15, 1997. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal
and on overdue installments of interest from time to time on
demand at the rate borne by the Notes plus 2% per annum and on
overdue installments of interest (without regard to any appli-
cable grace periods) to the extent lawful.
2. Method of Payment. The Company shall pay inter-
-----------------
est on the Notes (except defaulted interest) to the Persons who
are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date
even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must
surrender Notes to a Paying Agent to collect principal pay-
ments. The Company shall pay principal and interest in money
of the United States that at the time of payment is legal ten-
der for payment of public and private debts ("U.S. Legal Ten-
der"). However, the Company may pay principal and interest by
its check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, IBJ
--------------------------
▇▇▇▇▇▇▇▇ Bank & Trust Company, a New York banking corporation
(the "Trustee"), will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.
4. Indenture. The Company issued the Notes under
---------
an Indenture, dated as of February 6, 1997 (the "Indenture"),
between the Company and the Trustee. This Note is one of a
duly authorized issue of Exchange Notes of the Company desig-
nated as its Series B 10% Senior Subordinated Notes due 2007
(the "Exchange Notes"). The Notes are limited in aggregate
principal amount to $100,000,000. The Notes include the Ini-
tial Notes (the 10% Senior Subordinated Notes due 2007) and the
B-2
Exchange Notes, issued in exchange for the Initial Notes
pursuant to the Indenture. The Initial Notes and the Exchange
Notes are treated as a single class of securities under the
Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code (S)(S)77aaa-77bbbb) (the "TIA"), as in effect
on the date of the Indenture. Notwithstanding anything to the
contrary herein, the Notes are subject to all such terms, and
Holders of Notes are referred to the Indenture and said Act for
a statement of them. The Notes are general unsecured obliga-
tions of the Company.
5. Subordination. The Notes are subordinated in
-------------
right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt of the Company, whether out-
standing on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by his acceptance
hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such
action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purposes.
6. Redemption.
----------
(a) Optional Redemption. The Notes will be redeem-
-------------------
able, at the Company's option, in whole at any time or in part
from time to time, on and after January 15, 2002, upon not less
than 30 nor more than 60 days' notice, at the following redemp-
tion prices (expressed as percentages of the principal amount
thereof) if redeemed during the twelve-month period commencing
on January 15 of the year set forth below, plus, in each case,
accrued interest to the date of redemption:
Year Percentage
---- ----------
2002..................................................105.000%
2003..................................................103.333%
2004..................................................101.667%
2005 and thereafter...................................100.000%
(b) Optional Redemption Upon Public Equity Offer-
---------------------------------------------
ings. At any time, or from time to time, on or prior to
----
January 15, 2000, the Company may, at its option, use the net
cash proceeds of one or more Public Equity Offerings (as
defined in the Indenture) to redeem up to 35% of the aggregate
principal amount of Notes originally issued at a redemption
B-3
price equal to 110% of the principal amount thereof plus, in
each case, accrued interest to the date of redemption; provided
--------
that at least 65% of the principal amount of Notes originally
issued remains outstanding immediately after any such
redemption.
In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering, the Company shall make
such redemption not more than 120 days after the consummation
of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will
--------------------
be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for
the redemption of the Notes called for redemption shall have
been deposited with the Paying Agent for redemption on such
Redemption Date, then, unless the Company defaults in the pay-
ment of such Redemption Price plus accrued and unpaid interest,
if any, the Notes called for redemption will cease to bear
interest from and after such Redemption Date and the only right
of the Holders of such Notes will be to receive payment of the
Redemption Price plus accrued and unpaid interest, if any.
8. Offers to Purchase. Sections 4.15 and 4.16 of
------------------
the Indenture provide that, after certain Asset Sales (as
defined in the Indenture) and upon the occurrence of a Change
of Control (as defined in the Indenture), and subject to fur-
ther limitations contained therein, the Company will make an
offer to purchase certain amounts of the Notes in accordance
with the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes
---------------------------------
are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder shall regis-
ter the transfer of or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer docu-
ments and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for
redemption.
10. Persons Deemed Owners. The registered Holder of
---------------------
a Note shall be treated as the owner of it for all purposes.
B-4
11. Unclaimed Money. If money for the payment of
---------------
principal or interest remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the
Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If
-----------------------------------------
the Company at any time deposits with the Trustee U.S. Legal
Tender or U.S. Government Obligations sufficient to pay the
principal of and interest on the Notes to redemption or matur-
ity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Notes (including certain
covenants, but excluding its obligation to pay the principal of
and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to cer-
-----------------------------
tain exceptions, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default
or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in aggregate prin-
cipal amount of the Notes then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or sup-
plement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material
respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes
---------------------
certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, incur addi-
tional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other
Person, sell, assign, transfer, lease, convey or otherwise dis-
pose of all or substantially all of its assets or adopt a plan
of liquidation. Such limitations are subject to a number of
important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such
limitations.
15. Successors. When a successor assumes, in accor-
----------
dance with the Indenture, all the obligations of its predeces-
sor under the Notes and the Indenture, the predecessor will be
released from those obligations.
B-5
16. Defaults and Remedies. If an Event of Default
---------------------
occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of Notes then outstand-
ing may declare all the Notes to be due and payable in the man-
ner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee is not obli-
gated to enforce the Indenture or the Notes unless it has
received indemnity reasonably satisfactory to it. The Inden-
ture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee
-----------------------------
under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Notes and may otherwise deal
with the Company, its Subsidiaries or their respective Affili-
ates as if it were not the Trustee.
18. No Recourse Against Others. No stockholder,
--------------------------
director, officer, employee or incorporator, as such, of the
Company shall have any liability for any obligation of the Com-
pany 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 of a Note 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.
19. Authentication. This Note shall not be valid
--------------
until the Trustee or Authenticating Agent manually signs the
certificate of authentication on this Note.
20. Governing Law. The Laws of the State of New
-------------
York shall govern this Note and the Indenture, without regard
to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary
-------------------------------
abbreviations may be used in the name of a Holder of a Note 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).
22. CUSIP Numbers. Pursuant to a recommendation
-------------
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed
B-6
on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the
other identification numbers printed hereon.
23. Indenture. Each Holder, by accepting a Note,
---------
agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time.
The Company will furnish to any Holder of a Note upon
written request and without charge a copy of the Indenture,
which has the text of this Note in larger type. Requests may
be made to: CAF Acquisition Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President.
B-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed:
I or we assign and transfer this Note to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
----------------------------------------------------
agent to transfer this Note on the books of the Company. The
agent may substitute another to act for him.
Dated: Signed:
------------------- -------------------------------------
(Sign exactly as name
appears on the other side
of this Note)
Signature Guarantee:
--------------------------------------------------------
B-8
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the
Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.15 or Section
4.16 of the Indenture, state the amount you elect to have
purchased:
$
-------------------
Dated:
----------------- -------------------------------------
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:
-------------------------------------------
B-9
Exhibit C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
___________, ____
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Securities Processing
Window Level SC1
Re: CAF Acquisition Corporation
10% Senior Subordinated Notes due 2007
--------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 10%
Senior Subordinated Notes due 2007 (the "Notes") of CAF Acqui-
sition Corporation (the "Company"), we confirm that:
1. We have received a copy of the Offering Memoran-
(the "Offering Memorandum"), dated January 29, 1997 relat-
ing to the Notes and such other information as we deem neces-
sary in order to make our investment decision. We acknowledge
that we have read and agreed to the matters stated on
pages (i)-(ii) of the Offering Memorandum and in the section
entitled "Transfer Restrictions" of the Offering Memorandum,
including the restrictions on duplication and circulation of
the Offering Memorandum.
2. We understand that any subsequent transfer of
the Notes is subject to certain restrictions and conditions set
forth in the Indenture relating to the Notes (as described in
the Offering Memorandum) 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").
3. We understand that the offer and sale of the
Notes have not been registered under the Securities Act, and
that the Notes may not be offered or sold 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 sell or otherwise transfer any Notes
prior to the date which is three years after the original issu-
ance of the Notes, we will do so only (i) to the Company or any
of its subsidiaries, (ii) inside the United States in
C-1
accordance with Rule 144A under the Securities Act to a "quali-
fied institutional buyer" (as defined in Rule 144A under the
Securities Act), (iii) inside the United States to an institu-
tional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee (as defined in the Indenture
relating to the Notes), a signed letter containing certain rep-
resentations and agreements relating to the restrictions on
transfer of the Notes, (iv) outside the United States in accor-
dance with Rule 904 of Regulation S under the Securities Act,
(v) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available), or (vi) pur-
suant to an effective registration statement under the Securi-
ties Act, and we further agree to provide to any person pur-
chasing any of the Notes from us a notice advising such pur-
chaser that resales of the Notes are restricted as stated
herein.
4. We are not acquiring the Notes for or on behalf
of, and will not transfer the Notes to, any pension or welfare
plan (as defined in Section 3 of the Employee Retirement Income
Security Act of 1974), except as permitted in the section enti-
tled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of
any Notes, we will be required to furnish to the Trustee and
the Company such certification, legal opinions and other infor-
mation as the Trustee and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) and have such knowledge and expe-
rience 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 each able
to bear the economic risk of our or their investment, as the
case may be.
7. We are acquiring the Notes purchased by us for
our 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.
C-2
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 proceeding or official inquiry with respect to the mat-
ters covered hereby.
Very truly yours,
By:
-------------------------------
Name:
Title:
C-3
Exhibit D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
______________, ____
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Securities Processing
Window Level SC1
Re: CAF Acquisition Corporation (the "Company")
10% Senior Subordinated Notes due 2007
(the "Notes")
-------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $
------------
aggregate principal amount of the Notes, we confirm that such
sale has been effected pursuant to and in accordance with Regu-
lation S under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person
in the United States;
(2) either (a) at the time the buy offer was origi-
nated, the transferee was outside the United States or we
and any person acting on our behalf reasonably believed
that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facili-
ties of a designated off-shore securities market and nei-
ther we nor any person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the
United States;
(3) no directed selling efforts have been made in
the United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
D-1
(4) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities
Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.
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 mat-
ters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------------
Authorized Signature