<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1998.
REGISTRATION NO. 333-47973
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
THE CERPLEX GROUP, INC.
(Exact name of Registrant as specified in its charter)
---------------------
<TABLE>
<S> <C>
DELAWARE 75-1539534
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
</TABLE>
---------------------
9477 WAPLES STREET, SUITE 150
SAN DIEGO, CALIFORNIA 92121
(619) 552-1213
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
GEORGE L. MCTAVISH
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
1382 BELL AVENUE
TUSTIN, CALIFORNIA 92780
(714) 258-5301
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
KENNETH G. HAWARI
HUGHES & LUCE, L.L.P.
1717 MAIN STREET, SUITE 2800
DALLAS, TEXAS 75201
(214) 939-5500
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
---------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION FEE
REGISTERED REGISTERED PER UNIT OFFERING PRICE (1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10% Series B Senior Subordinated Notes Due
December 31, 2004....................... $2,747,890 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Senior Cumulative Convertible Preferred
Stock, $.01 par value................... 32,976 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Units of Senior Subordinated Notes and
Senior Cumulative Convertible Preferred
Stock................................... 32,976 $183.33 $6,045,490 $1,785(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.03 par value.............. 13,190,400 N/A N/A N/A
=================================================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457 of the Securities Act of 1933, as amended.
(2) $1,785 of the Registration Fee was previously paid by the Registrant in
connection with the filing of the Form S-3 on March 13, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
BECOMES EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
SUPPLEMENT TO PROSPECTUS DATED MARCH 27, 1998 OF
THE CERPLEX GROUP, INC. (FORMERLY KNOWN AS AURORA ELECTRONICS, INC.)
THE CERPLEX GROUP, INC.
(FORMERLY KNOWN AS AURORA ELECTRONICS, INC.)
RIGHTS TO PURCHASE
32,976 UNITS
EACH CONSISTING OF
$83.33 PRINCIPAL AMOUNT OF 10% SERIES B SENIOR SUBORDINATED NOTES DUE DECEMBER
31, 2004 AND
ONE SHARE OF 7% SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK, PAR VALUE $.01
PER SHARE
SUBSCRIPTION PRICE OF $183.33 PER UNIT
The Effective Time of the Merger was 10:00 a.m., Pacific time, on April 30,
1998 and, accordingly, the Rights Offering also expired at such time. Prior to
the Effective Time, Aurora made certain amendments to the terms of the Aurora
Senior Subordinated Notes and the New Aurora Preferred Stock comprising each
Unit. As a result of such changes, Aurora is offering to the Public Stockholders
who subscribed for Units in the Rights Offering the opportunity to rescind their
subscriptions. Public Stockholders wishing to rescind their subscriptions must
do so in the manner described below.
The changes to the terms of the Aurora Senior Subordinated Notes were made
to satisfy the requirements of Greyrock Business Credit, a division of
NationsCredit Commercial Corporation ("Greyrock"), the senior lender providing
the New Senior Loan, and the Trustee. The New Senior Loan provided by Greyrock
was required under the Merger Agreement and was a condition to the consummation
of the Merger and, as a consequence, the Rights Offering. The changes to the
terms of the New Aurora Preferred Stock were made in response to comments Aurora
received from the California Department of Corporations in connection with the
qualification of the Units for sale in the State of California.
The following is a summary of the changes to the terms of the Aurora Senior
Subordinated Notes and the New Aurora Preferred Stock and is qualified in its
entirety by reference to the form of Indenture and the form of Aurora Senior
Subordinated Note attached thereto and the Certificate of Designations, amended
copies of which have been filed with the Registration Statement of which this
Prospectus Supplement is a part:
(a) The subordination provisions of the Indenture and the Aurora Senior
Subordinated Notes have been amended:
(i) to add to the term "Senior Indebtedness" any loans made to the
Company as a debtor in possession in any bankruptcy proceeding by any
persons who were the holders of any Senior Indebtedness on the date such
bankruptcy proceeding was commenced;
(ii) to redefine the term "Credit Agreement" to refer to the Loan and
Security Agreement, dated as of April 30, 1998, among Aurora and certain of
its affiliates as borrowers and Greyrock;
(iii) to provide that notwithstanding any default or event of default
with respect to the subordinated debt evidenced by the Aurora Senior
Subordinated Notes, the holders of said Notes will take no action to
accelerate or enforce said Notes or any rights or remedies relating thereto
against Aurora until the expiration of six months after written notice of
default is given by such holders to Greyrock;
(iv) to expressly provide that obligations of the holders of the
Aurora Senior Subordinated Notes under the subordination provisions of the
Indenture shall continue to be effective, or be reinstated, as the case may
be, if at any time any payment in respect of any Senior Indebtedness, or
any other payment to any holder of any Senior Indebtedness in its capacity
as such, is rescinded or must otherwise be restored or returned by the
holder of such Senior Indebtedness upon the occurrence of any insolvency,
bankruptcy, liquidation, reorganization or other similar proceedings, or
any receivership proceedings in connection therewith, relative to Aurora or
its creditors or its property or upon or as a result of the appoint of a
receiver, intervenor or conservator of, or trustee or similar officer for,
Aurora or any substantial part of its property or otherwise, all as though
such payment had not been made;
(v) to provide that Aurora shall not at any time offer (and the holder
hereof shall not at any time accept) (A) any pledge of collateral or (B)
any guaranty by any parent or subsidiary of Aurora, in each case with
respect to the obligations of Aurora under the Aurora Senior Subordinated
Notes.
<PAGE> 3
(b) The prepayment provisions of the Indenture and the Aurora Senior
Subordinated Notes have been amended:
(i) to provide that any notice of an optional or mandatory redemption
of Aurora Senior Subordinated Notes (other than a redemption in connection
with a holder's failure to consent to a waiver of any covenant, condition,
default or Event of Default under the Indenture requested by Aurora) shall
be delivered, (A) if from Aurora to the Trustee, not less than 45 days (as
opposed to 30 days), and (B) if from the Trustee to the holders of Aurora
Senior Subordinated Notes, not less than 30 days (as opposed to 20 days),
prior to the scheduled redemption date;
(ii) to provide that the date of a redemption shall (A) if required in
connection with the existence of Excess Cash Flow in any fiscal year, be
150 days (as opposed to 105 days), and (B) if required in connection with
the consummation of any Sale or Issuance Transaction, be 50 days (as
opposed to 5 days), after the end of such fiscal year; and
(iii) to provide that if a mandatory redemption of the Aurora Senior
Subordinated Notes shall be required, Aurora will deposit with the Trustee
(at the same time Aurora provides notice of such redemption), an amount in
immediately available funds sufficient to pay all outstanding principal and
accrued interest through the scheduled redemption date on such Notes to be
redeemed. Until disbursed by the Trustee, such funds shall be invested, for
the account of Aurora, by the Trustee in certain permitted investments
described in the Indenture.
(c) The consent rights of the holders of New Aurora Preferred Stock have
been amended so that upon the consummation of a registered public offering of
Aurora Common Stock (other than on Form S-4 or S-8) for cash for the account of
Aurora, such consent rights will automatically terminate with respect to
Aurora's ability to (i) effect, validate or permit a Change of Control and (ii)
effect or validate the amendment, alteration or repeal of any provision of the
Aurora Charter or Aurora Bylaws.
Subscriptions may be rescinded by completing and signing a Notice of
Rescission substantially in the form provided with this Prospectus Supplement
and forwarding such Notice of Rescission to the Subscription Agent. Public
Stockholders whose shares are held in the name of a bank or broker must contact
their bank or broker if they wish to rescind their subscriptions. Notices of
Rescission must be received by the Subscription Agent on or prior to May 29,
1998 (the "Rescission Expiration Date"). Any Notice of Rescission received by
the Subscription Agent after the Rescission Expiration Date will not be
accepted.
Certificates representing the securities comprising the Units purchased
(and not rescinded), will be delivered to the purchasers thereof as soon as
practicable after the Rescission Expiration Date. It is expected that such
certificates will be available for delivery five business days following the
Rescission Expiration Date.
Any questions or requests for assistance concerning the recission of a
subscription for Units should be directed to the Subscription Agent, American
Stock Transfer & Trust Company, at the following telephone number: (800)
937-5449.
<PAGE> 4
THE CERPLEX GROUP, INC.
(FORMERLY KNOWN AS AURORA ELECTRONICS, INC.)
RIGHTS OFFERING FOR 10% SERIES B SENIOR SUBORDINATED NOTES
DUE DECEMBER 31, 2004 AND SHARES OF 7% SENIOR CUMULATIVE
CONVERTIBLE PREFERRED STOCK, PAR VALUE $0.01 PER SHARE, OF
NOTICE OF RECISSION
To: American Stock Transfer & Trust Company, as Subscription Agent
Subject to the terms and conditions set forth in the related Prospectus
dated March 27, 1998, as supplemented by a Prospectus Supplement dated May 13,
1998, the undersigned hereby rescinds his, her or its prior exercise of rights
to purchase units ("Units"), each consisting of (i) $83.33 principal amount of
10% Series B Senior Subordinated Notes Due December 31, 2004 and (ii) one share
of 7% Senior Cumulative Convertible Preferred Stock, par value $0.01 per share,
of The Cerplex Group, Inc. (formerly known as Aurora Electronics, Inc.), as
follows:
<TABLE>
<S> <C>
- - Please rescind my purchase of the
following number of Units purchased
by exercise of the Basic
Subscription Privilege:
--------------- Units
- - Please rescind my purchase of the
following number of Units purchased
by exercise of the Additional
Subscription Privilege:
--------------- Units
(NOTE: IN NO EVENT MAY THE NUMBER OF UNITS PURCHASED PURSUANT TO THE ADDITIONAL
SUBSCRIPTION
PRIVILEGE EXCEED THE NUMBER OF UNITS PURCHASED PURSUANT TO THE BASIC
SUBSCRIPTION PRIVILEGE.
DATE AND SIGN HERE:
===================
Signature(s)
Please type or
print name(s) below
-------------------
Date: ------------ , 1998 -------------------
</TABLE>
Please return to: American Stock Transfer & Trust Company
40 Wall Street -- 46th Floor
New York, New York 10005
Facsimile: (718) 234-5001
<PAGE> 5
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 16. EXHIBITS
The Exhibits to this Registration Statement are listed on the Index to
Exhibits of this Registration Statement, which Index is incorporated herein by
reference.
II-1
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irvine, State of California, on May 12, 1998.
THE CERPLEX GROUP, INC.
By: /s/ GEORGE L. MCTAVISH
----------------------------------
George L. McTavish,
Chairman and Chief Executive
Officer
By: /s/ STEVEN L. KORBY
----------------------------------
Steven L. Korby,
Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act, this Amendment has been
signed by the following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GEORGE L. MCTAVISH Chairman of the Board May 12, 1998
- -----------------------------------------------------
George L. McTavish
/s/ ROBERT A. FINZI Director May 12, 1998
- -----------------------------------------------------
Robert A. Finzi
/s/ WILLIAM A. KLEIN Director May 12, 1998
- -----------------------------------------------------
William A. Klein
* Director May 12, 1998
- -----------------------------------------------------
Thomas E. McInerney
* Director May 12, 1998
- -----------------------------------------------------
Richard H. Stowe
* /s/ George L. McTavish, attorney-in-fact.
</TABLE>
II-2
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------- -------------------
<C> <S>
+4.1 The Restated Certificate of Incorporation of the Registrant,
as amended to March 27, 1998 (incorporated by reference from
Exhibit 3.1 to the Registrant's Transition Report on Form
10-K for the transition period from December 31, 1991 to
September 30, 1992).
4.1.1. The Certificate of Amendment of the Registrant filed April
28, 1998.
4.1.2. The Certificate of Amendment of the Registrant filed April
30, 1998.
+4.2 Bylaws of the Registrant, as amended (incorporated by
reference from Exhibit 4.2 to the Registrant's Registration
Statement on Form S-8 (Registration No. 33-79426)).
4.2.1 Resolution adopted April 30, 1998 by the Board of Directors,
amending the Bylaws of the Registrant.
4.3 Certificate of Designations, Preferences and Rights of
Senior Cumulative Convertible Preferred Stock of the
Registrant filed April 29, 1998.
4.4 Form of Indenture between the Registrant and U.S. Trust
Corporation.
4.5 Form of the Registrant's 10% Series B Senior Subordinated
Notes Due December 31, 2004 (included as Exhibit A to the
form of Indenture filed as Exhibit 4.4).
+4.6 Form of Letter to Stockholders of the Registrant.
+4.7 Form of Subscription Certificate.
+4.8 Form of Instructions as to Use of Subscription Certificates.
+4.9 Form of Letter to Brokers.
+4.10 Form of Letter to Clients.
+4.11 Form of Notice of Guaranteed Delivery
+4.12 Form of Nominee Holder Certification
+4.13 Guidelines to Form W-9.
+5 Opinion of Hughes & Luce, L.L.P. concerning legality of
securities being registered.
+12 Statement Regarding Computation of Ratio of Earnings to
Fixed Charges.
+23.1 Consent of Hughes & Luce, L.L.P. (included in Exhibit 5)
23.2 Consent of Arthur Andersen LLP
23.3 Consent of KPMG Peat Marwick LLP
+24 Power of Attorney
</TABLE>
- ---------------
+ Filed previously
<PAGE> 1
EXHIBIT 4.1.1
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
AURORA ELECTRONICS, INC.
---------------------------
AURORA ELECTRONICS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
FIRST: That the following resolutions were duly adopted by the
Board of Directors of the Corporation, setting forth a proposed amendment to the
Restated Certificate of Incorporation of the Corporation, declaring such
amendment to be advisable and directing that such amendment be submitted to the
stockholders of the Corporation for their approval. The resolutions are as
follows:
"RESOLVED, that in connection with the Merger, and as further
contemplated by the Merger Agreement, there is hereby adopted an
amendment to the Corporation's Restated Certificate of Incorporation
pursuant to which the authorized capital stock of the Corporation shall
be changed from 51,000,000 shares, consisting of 50,000,000 shares of
Common Stock, $.03 par value ("Common Stock"), and 1,000,000 shares of
Preferred Stock, $.01 par value ("Preferred Stock"), to 301,000,000
shares, consisting of 300,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock, and, in connection with such change,
paragraph (A) of Article FOURTH of the Corporation's Restated
Certificate of Incorporation shall be amended to read in its entirety
as follows:
'(A) The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 301,000,000 shares,
consisting of 300,000,000 shares of Common Stock, $.03 par value and
1,000,000 shares of Preferred Stock, $.01 par value.'
<PAGE> 2
FURTHER RESOLVED, that the Board of Directors of the
Corporation hereby declares that the foregoing amendment to the
Corporation's Restated Certificate of Incorporation is desirable and in
the best interests of the Corporation, and hereby recommends that the
amendment be submitted to the stockholders of the Corporation for their
approval pursuant to Section 242(b) of the General Corporation Law of
the State of Delaware."
SECOND: That thereafter the amendment to the Restated
Certificate of Incorporation of the Corporation effected by this Certificate was
duly authorized by the affirmative vote of the holders of not less than a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote thereon, after having been declared advisable by the Board of Directors
of the Corporation, all in accordance with the provisions of Sections 228 and
242 of the General Corporation Law of the State of Delaware.
2
<PAGE> 3
IN WITNESS WHEREOF, AURORA ELECTRONICS, INC. has caused this
Certificate to be signed by Steven L. Korby, its Executive Vice President and
Chief Financial Officer, who hereby acknowledges under penalties of perjury that
the facts herein stated are true and that this Certificate is his act and deed,
as of the 29th day of April 1998.
AURORA ELECTRONICS, INC.
By /s/ STEVEN L. KORBY
-----------------------------
Steven L. Korby,
Executive Vice President and
Chief Executive Officer
<PAGE> 1
EXHIBIT 4.1.2
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
AURORA ELECTRONICS, INC.
---------------------------
AURORA ELECTRONICS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
FIRST: That the following resolutions were duly adopted by the
Board of Directors of the Corporation, setting forth a proposed amendment to the
Restated Certificate of Incorporation of the Corporation, declaring such
amendment to be advisable and directing that such amendment be submitted to the
stockholders of the Corporation for their approval. The resolutions are as
follows:
"RESOLVED, that as further contemplated by the Merger
Agreement, there is hereby adopted an amendment to the Corporation's
Restated Certificate of Incorporation pursuant to which the name of the
Corporation shall be changed to "The Cerplex Group, Inc.", and, in
connection with such change, Article FIRST of the Corporation's
Restated Certificate of Incorporation shall be amended to read in its
entirety as follows:
'The name of the Corporation is The Cerplex Group, Inc.'
FURTHER RESOLVED, that the Board of Directors of the
Corporation hereby declares that the foregoing amendment to the
Corporation's Restated Certificate of Incorporation is desirable and in
the best interests of the Corporation, and hereby recommends that the
amendment be submitted to the stockholders of the Corporation for their
approval pursuant to Section 242(b) of the General Corporation Law of
the State of Delaware."
<PAGE> 2
SECOND: That thereafter the amendment to the Restated
Certificate of Incorporation of the Corporation effected by this Certificate was
duly authorized by the affirmative vote of the holders of not less than a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote thereon, after having been declared advisable by the Board of Directors
of the Corporation, all in accordance with the provisions of Sections 228 and
242 of the General Corporation Law of the State of Delaware.
2
<PAGE> 3
IN WITNESS WHEREOF, AURORA ELECTRONICS, INC. has caused this
Certificate to be signed by Steven L. Korby, its Executive Vice President and
Chief Financial Officer, who hereby acknowledges under penalties of perjury that
the facts herein stated are true and that this Certificate is his act and deed,
as of the 30th day of April 1998.
AURORA ELECTRONICS, INC.
By /s/ STEVEN L. KORBY
---------------------------------
Steven L. Korby,
Executive Vice President and
Chief Financial Officer
<PAGE> 1
EXHIBIT 4.2.1
On April 30, 1998, the Board of Directors adopted the following resolution by
unanimous written consent:
"RESOLVED, that pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Corporation,
Article II, Section 3 of the By-Laws of the Corporation is hereby amended
by deleting such section in its entirety and inserting the following in
its place:
'SECTION 3. Special Meetings. Special Meetings of the
stockholders, for any purpose, unless otherwise prescribed by statute
or by the Restated Certificate of Incorporation, may be called by the
chief executive officer or the president and shall be called by the
chief executive officer, president or secretary at the request in
writing of at least 25% of the directors or stockholders entitled to
vote. A call for a special meeting of stockholders shall be in
writing, filed with the secretary, and shall specify the time and
place of holding of such meeting and the purpose or purposes for which
it is called.'"
<PAGE> 1
Exhibit 4.3
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
AURORA ELECTRONICS, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-------------------------------------------
AURORA ELECTRONICS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies
that, pursuant to authority vested in the Board of Directors of the Corporation
by Article Fourth of the Restated Certificate of Incorporation, as amended, of
the Corporation, the following resolution was adopted as of by the Board of
Directors of the Corporation pursuant to Section 141 of the Delaware General
Corporation Law:
"RESOLVED that, pursuant to authority vested in the Board of
Directors of the Corporation by Article Fourth of the Corporation's Restated
Certificate of Incorporation, as amended, of the total authorized number of
1,000,000 shares of Preferred Stock, par value $.01 per share, of the
Corporation, there shall be designated a series of 230,000 shares which shall be
issued in and constitute a single series to be known as "7% Senior Cumulative
Convertible Preferred Stock" (hereinafter called the "Senior Preferred Stock").
The shares of Senior Preferred Stock shall have the voting powers, designations,
preferences and other special rights, and qualifications, limitations and
restrictions thereof set forth below:
1. Dividends. (a) The holders of shares of Senior Preferred
Stock shall be entitled to receive, out of funds legally available for such
purpose, cash dividends at the rate of $7.00 per share per annum, and no more,
payable as provided herein. Such dividends shall be cumulative and shall accrue
from and after the date of issue whether or not declared and whether or not
there are any funds of the Corporation legally available for the payment of
dividends. Accrued but unpaid dividends shall not bear interest. The Board of
Directors of the Corporation may fix a record date for the determination of
holders of Senior Pre-
<PAGE> 2
ferred Stock entitled to receive payment of a dividend declared thereon, which
record date shall be no more than 60 days prior to the date fixed for the
payment thereof.
(b) As long as any shares of Senior Preferred Stock shall
remain outstanding, in no event shall any dividend be declared or paid upon, nor
shall any distribution be made upon, any Junior Capital Stock (as defined
herein), other than a dividend or distribution payable solely in shares of
common stock of the Corporation, nor shall any shares of Junior Capital Stock be
purchased or redeemed by the Corporation, nor shall any moneys be paid to or
made available for a sinking fund for the purchase or redemption of shares of
any Junior Capital Stock, unless, in each such case, (i) full cumulative
dividends on the outstanding shares of Senior Preferred Stock shall have been
declared and paid and (ii) any arrears or defaults in any redemption of shares
of Senior Preferred Stock shall have been cured. The term "Junior Capital Stock"
as used herein means any shares of capital stock of the Corporation, including
the Corporation's Common Stock, par value $.03 per share (the "Common Stock"),
and the Corporation's Convertible Preferred Stock (including Series B, Series C
and Series D thereof), par value $.01 per share (the "Junior Preferred Stock"),
other than shares of the Corporation's capital stock permitted to rank on a
parity with or senior to the Senior Preferred Stock pursuant to paragraph 6
hereof.
2. Redemption. The shares of Senior Preferred Stock shall be
redeemable as follows:
(a) Mandatory Redemption. (1) Except as and to the extent
expressly prohibited by applicable law, the Corporation shall redeem (i) one
half of the outstanding shares of Senior Preferred Stock on December 31, 2006
and (ii) all of the remaining shares of Senior Preferred Stock on December 31,
2007 (in the manner and with the effect provided in subparagraphs 2(c) through
2(e) below).
(b) Redemption at the Option of the Holder. Upon the
occurrence of any of the following (each a "Change of Control"):
(i) ( the sale, lease or transfer, whether direct or indirect,
of all or substantially all the assets of the Corporation and its
subsidiaries, taken as a whole, in one transaction or a series of
related transactions, to any person or group other than the WCAS Group
(as hereinafter defined), or
(ii) the acquisition of beneficial ownership by any person or
group other than the WCAS Group, of voting stock of the Corporation
representing more than 50% of the voting
2
<PAGE> 3
power of all outstanding shares of such voting stock, whether by way of
merger or consolidation or otherwise,
then each holder of any share or shares of Senior Preferred Stock shall have the
right, at such holder's option, to require the Corporation to redeem (a
"Redemption at the Option of the Holder"), any or all of such holder's shares of
Senior Preferred Stock (any such redemption of less than all a holder's shares
to be in integral multiples of 1,000 shares) on or prior to the effective date
of such Change of Control, at a redemption price of $100 plus all accrued but
unpaid dividends to which the holders of the Senior Preferred Stock are then
entitled pursuant to paragraph 1 above as of such date. Such option shall be
exercised by written notice to the Corporation given within fifteen days of the
date of receipt of the Redemption Notice (as defined herein) to be delivered
pursuant to paragraph 2(c) below.
For purposes of this Certificate of Designations: (i) the
terms "person" and "group" shall have the meaning set forth in paragraph
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether or not applicable, (ii) the term "beneficial owner" shall have
the meaning set forth in Rules 13d-3 and 13d-5 under the Exchange Act, whether
or not applicable, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time or upon
the occurrence of certain events, (iii) any "person" or "group" will be deemed
to beneficially own any voting stock of the Corporation so long as such person
or group beneficially owns, directly or indirectly, in the aggregate a majority
of the voting stock of a registered holder of the voting stock of the
Corporation, and (iv) the term "WCAS Group" shall mean Welsh, Carson, Anderson &
Stowe VII, L.P., a Delaware limited partnership ("WCAS VII"), WCAS Capital
Partners II, L.P., a Delaware limited partnership ("WCAS CP II"), any general
partners thereof and any other investment limited partnerships or other
investment entities under common control therewith.
Any date on which any shares of Senior Preferred Stock are to
be redeemed as provided in this paragraph 2 is hereinafter called a "Senior
Preferred Redemption Date." The price at which any shares of Senior Preferred
Stock are to be redeemed as herein provided is hereinafter called the "Senior
Preferred Redemption Price."
(c) Notice of Redemption. At least 20 days (and not more than
60 days) prior to any Senior Preferred Redemption Date (which in the case of any
Redemption at the Option of the Holder shall be prior to the effective date of
any Change of Control), written notice thereof (a "Senior Preferred Redemption
Notice")
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shall be mailed, by first class or registered mail, postage prepaid, to each
holder of record of Senior Preferred Stock, at his, her or its address last
shown on the records of the transfer agent of the Senior Preferred Stock (or the
records of the Corporation, if it serves as its own transfer agent). The Senior
Preferred Redemption Notice shall set forth (i) the Senior Preferred Redemption
Date, (ii) the Senior Preferred Redemption Price, (iii) in the case of a
Mandatory Redemption, the total number of shares to be redeemed from all holders
and the number of shares to be redeemed from such holder, and (iv) in the case
of a Redemption at the Option of the Holder, a description of the events which
will, upon the occurrence thereof, constitute a Change of Control, including a
summary description of the terms thereof, and such holder's right to exercise
its option to require a redemption under paragraph 2(b) hereof. In the case of a
Mandatory Redemption, the Senior Preferred Redemption Notice shall call upon
such holder to surrender to the Corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing any shares
of Senior Preferred Stock to be redeemed.
(d) Redeemed or Otherwise Acquired Shares to be Retired. On or
prior to a Senior Preferred Redemption Date, all holders of shares of Senior
Preferred Stock to be redeemed shall surrender their certificates representing
such shares to the Corporation, in the manner and at the place designated in the
Senior Preferred Redemption Notice, and against such surrender the Senior
Preferred Redemption Price of such shares shall be paid to the order of the
person whose name appears on each such certificate as the owner thereof. Each
surrendered certificate shall be canceled. From and after the Senior Preferred
Redemption Date, unless there shall have been a default in payment of the Senior
Preferred Redemption Price, all rights of the holders of the shares of redeemed
Senior Preferred Stock as holders of such shares of Senior Preferred Stock
(except the right to receive the Senior Preferred Redemption Price without
interest against surrender of their certificate or certificates) shall cease
with respect to such shares, and such shares shall not thereafter be transferred
on the books of the Corporation (or its transfer agent, if any) or be deemed to
be outstanding for any purpose whatsoever.
(e) Shares to be Redeemed or Purchased. If the funds of the
Corporation legally available for redemption of Senior Preferred Stock on any
Senior Preferred Redemption Date are insufficient, after redemption of any other
shares ranking senior thereto, to redeem the full number of shares of Senior
Preferred Stock to be redeemed on such date, those funds which are legally
available shall be used to redeem the maximum possible number of such shares of
Senior Preferred Stock ratably from each holder whose shares are otherwise
required to be redeemed. At any time
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thereafter when additional funds of the Corporation become legally available for
the redemption of Senior Preferred Stock, such funds will be used, at the end of
the next succeeding fiscal quarter, to redeem the balance of the shares which
the Corporation was theretofore obligated to redeem, ratably on the basis set
forth in the preceding sentence.
3. Liquidation, Dissolution or Winding Up. (a) In the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Senior Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, before any payment shall be made to the
holders of any shares of Junior Capital Stock by reason of their ownership
thereof, an amount equal to $100 per share of Senior Preferred Stock, plus all
accrued but unpaid dividends to which the holders of the Senior Preferred Stock
are then entitled pursuant to paragraph 1 above as of such date, and no more. If
upon any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to its
stockholders (after making all distributions to which holders of capital stock
ranking senior to the Senior Preferred Stock shall be entitled) shall be
insufficient to pay the holders of shares of Senior Preferred Stock the full
amount to which they shall be entitled pursuant to this paragraph 3(a), the
holders of shares of Senior Preferred Stock, and any other shares ranking on a
parity therewith, shall share ratably in any distribution of the remaining
assets and funds of the Corporation in proportion to the respective amounts
which would otherwise be payable in respect of the shares of Senior Preferred
Stock held by them upon such distribution if all amounts payable on or with
respect to such shares were paid in full.
(b) After the payment of all amounts required to be paid
pursuant to paragraph 3(a) to the holders of shares of Senior Preferred Stock,
and any other shares ranking on a parity therewith, upon the dissolution,
liquidation or winding up of the Corporation, the holders of shares of Junior
Capital Stock then outstanding shall share in any distribution of the remaining
assets and funds of the Corporation in the manner provided by law, in the
Restated Certificate of Incorporation of the Corporation, as amended, or as
provided in any pertinent Certificate of Designations of the Corporation, as the
case may be.
(c) No Change of Control shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this paragraph 3.
4. Conversion. The shares of Senior Preferred Stock shall be
convertible as follows:
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<PAGE> 6
(a) Right to Convert. Subject to the terms and conditions of
this paragraph 4, the holder of any share or shares of Senior Preferred Stock
shall have the right, at his, her or its option, at any time, to convert any
such shares of Senior Preferred Stock (except that upon any liquidation of the
Corporation the right of conversion shall terminate as to all shares at the
close of business 15 days after notice thereof has been given to the holders of
Senior Preferred Stock as provided in paragraph 4(h) hereof) into such number of
fully paid and nonassessable whole shares of Common Stock as is obtained by (i)
multiplying the number of shares of Senior Preferred Stock so to be converted by
$100, (ii) adding the Additional Conversion Amount (as defined in paragraph 4(c)
herein), if any, and (iii) dividing the result by the conversion price of $0.25
or, if there has been an adjustment of the conversion price, by the conversion
price as last adjusted and in effect at the date any share or shares of Senior
Preferred Stock are surrendered for conversion (such price, or such price as
last adjusted, being referred to herein as the "Senior Preferred Conversion
Price"). Such right of conversion shall be exercised by the holder thereof by
giving written notice that the holder elects to convert a stated number of
shares of Senior Preferred Stock into Common Stock and by surrender of a
certificate or certificates for the shares so to be converted to the Corporation
at its principal office (or such other office or agency of the Corporation as
the Corporation may designate by notice in writing to the holder or holders of
the Senior Preferred Stock) at any time during its usual business hours on the
date set forth in such notice, together with a statement of the name or names
(with address), subject to compliance with applicable laws to the extent such
designation shall involve a transfer, in which the certificate or certificates
for shares of Common Stock shall be issued.
(b) Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt by the Corporation of the written notice referred to
in paragraph 4(a) above and surrender of the certificate or certificates for the
share or shares of the Senior Preferred Stock to be converted, the Corporation
shall issue and deliver, or cause to be issued and delivered, to the holder,
registered in such name or names as such holder may direct, subject to
compliance with applicable laws to the extent such designation shall involve a
transfer, a certificate or certificates for the number of whole shares of Common
Stock issuable upon the conversion of such share or shares of Senior Preferred
Stock. To the extent permitted by law, such conversion shall be deemed to have
been effected and the Senior Preferred Conversion Price shall be determined as
of the close of business on the date on which such written notice shall have
been received by the Corporation and the certificate or certificates for such
share or shares shall have been surrendered as aforesaid, and at such time the
rights of the holder of such share or shares of Senior Pre-
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ferred Stock shall cease, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby.
(c) Fractional Shares; Dividends; Partial Conversion.
(i) No fractional shares shall be issued upon conversion of
the Senior Preferred Stock into Common Stock and the number of shares
of Common Stock to be issued shall be rounded to the nearest whole
share. If any fractional interest in a share of Common Stock would,
except for the provisions of this paragraph 4(c), be deliverable upon
any such conversion, the Corporation, in lieu of delivering the
fractional share thereof, shall pay to the holder surrendering the
Senior Preferred Stock for conversion an amount in cash equal to the
current fair market value of such fractional interest as determined in
good faith by the Board of Directors of the Corporation.
(ii) Upon the conversion of any shares of Senior Preferred
Stock, the Corporation will pay the holder thereof, out of funds
legally available for such purpose, any accrued but unpaid dividends
thereon to the date of such conversion. In the event that the
Corporation is for any reason unable to pay some or all of such accrued
but unpaid dividends, any amount not so paid shall (for purposes of
paragraph 4(a) hereof) constitute the "Additional Conversion Amount."
No other payment or adjustment shall be made upon any conversion on
account of the Senior Preferred Stock so converted or the Common Stock
issued upon such conversion.
(iii) In case the number of shares of Senior Preferred Stock
represented by the certificate or certificates surrendered pursuant to
paragraph 4(a) exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder thereof,
at the expense of the Corporation, a new certificate or certificates
for the number of shares of Senior Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted.
(d) Adjustment of Price Upon Issuance of Common Shares. Except
as provided in paragraph 4(e) hereof, if and whenever (after the date the shares
of Senior Preferred Stock shall have been issued and be outstanding) the
Corporation shall issue or sell, or is, in accordance with subparagraphs (d)(i)
through (d)(vii), deemed to have issued or sold, any shares of its Common Stock
without consideration or for a consideration per share less than the Senior
Preferred Conversion Price in effect
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immediately prior to the time of such issue or sale, then, forthwith upon such
issue or sale, the Senior Preferred Conversion Price shall be adjusted to the
price (calculated to the nearest cent) determined by dividing (x) an amount
equal to the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issue or sale (including as outstanding all shares of
Common Stock issuable upon conversion of outstanding Senior Preferred Stock or
upon conversion of outstanding Convertible Securities (as defined in
subparagraph (i) below)) multiplied by the then existing Senior Preferred
Conversion Price, and (B) the consideration, if any, received by the Corporation
upon such issue or sale, by (y) the total number of shares of Common Stock
outstanding immediately after such issue or sale (including as outstanding all
shares of Common Stock issuable upon conversion of outstanding Senior Preferred
Stock or outstanding Convertible Securities, in each case without giving effect
to any adjustment in the number of shares so issuable by reason of such issue
and sale).
No adjustment of the Senior Preferred Conversion Price,
however, shall be made in an amount less than $.01 per share, and any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any adjustments
so carried forward shall amount to $.01 per share or more.
For purposes of this paragraph 4(d), the following
subparagraphs (i) through (vii) shall also be applicable:
(i) Issuance of Rights or Options. Subject to paragraph 4(e)
hereof, in case at any time the Corporation shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any rights
to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock (other than shares of Senior Preferred Stock)
or securities convertible into or exchangeable for Common Stock (such
rights or options being herein called "Options" and such convertible or
exchangeable stock or securities being herein called "Convertible
Securities") whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such
Convertible Securities (determined by dividing (A) the total amount, if
any, received or receivable by the Corporation as consideration for the
granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon the exercise
of all such Options, plus, in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or
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<PAGE> 9
sale of such Convertible Securities and upon the conversion or exchange
thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such Options) shall be less than the Senior Preferred Conversion
Price in effect immediately prior to the time of the granting of such
Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been
issued for such price per share as of the date of granting of such
Options and thereafter shall be deemed to be outstanding. Except as
otherwise provided in subparagraph (iii) below, no adjustment of the
Senior Preferred Conversion Price shall be made upon the actual issue
of such Common Stock or of such Convertible Securities upon exercise of
such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.
(ii) Issuance of Convertible Securities. Subject to paragraph
4(e) hereof, in case the Corporation shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (A) the total amount received or receivable by
the Corporation as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion
or exchange thereof, by (B) the total maximum number of shares of
Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Senior Preferred
Conversion Price in effect immediately prior to the time of such issue
or sale, then the total maximum number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible Securities
shall be deemed to have been issued for such price per share as of the
date of the issue or sale of such Convertible Securities and thereafter
shall be deemed to be outstanding, provided that (x) except as
otherwise provided in subparagraph (iii) below, no adjustment of the
Senior Preferred Conversion Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issue or sale of such Convertible
Securities is made upon exercise of any Option to purchase any such
Convertible Securities for which adjustments of the Senior Preferred
Conversion Price have been or are to be made pursuant to
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<PAGE> 10
other provisions of this paragraph 4(d), no further adjustment of the
Senior Preferred Conversion Price shall be made by reason of such issue
or sale.
(iii) Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any Option referred to in subparagraph (i), the
additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subparagraph (i)
or (ii), or the rate at which any Convertible Securities referred to in
subparagraph (i) or (ii) are convertible into or exchangeable for
Common Stock shall change at any time (in each case other than under or
by reason of provisions designed to protect against dilution), the
Senior Preferred Conversion Price in effect at the time of such event
shall forthwith be readjusted to the Senior Preferred Conversion Price
which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or the termination of any such right to
convert or exchange such Convertible Securities, the Senior Preferred
Conversion Price then in effect hereunder shall forthwith be increased
to the Senior Preferred Conversion Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to
such expiration or termination, never been issued, and the Common Stock
issuable thereunder shall no longer be deemed to be outstanding. If the
purchase price provided for in any such Option referred to in
subparagraph (i) or the rate at which any Convertible Securities
referred to in subparagraph (i) or (ii) are convertible into or
exchangeable for Common Stock shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then, in case of the delivery of Common Stock upon the
exercise of any such Option or upon conversion or exchange of any such
Convertible Securities, the Senior Preferred Conversion Price then in
effect hereunder shall forthwith be adjusted to such respective amount
as would have been obtained had such Option or Convertible Securities
never been issued as to such Common Stock and had adjustments been made
upon the issuance of the shares of Common Stock delivered as aforesaid,
but only if as a result of such adjustment the Senior Preferred
Conversion Price then in effect hereunder is thereby reduced.
(iv) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon the
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Common Stock of the Corporation payable in Common Stock, Options or
Convertible Securities, the Senior Preferred Conversion Price shall be
reduced as if the Corporation had subdivided its outstanding shares of
Common Stock into a greater number of shares, as provided in
subparagraph 4(d)(v) hereof.
(v) Subdivision or Combination of Stock. In case the
Corporation shall at any time subdivide its outstanding shares of
Common Stock into a greater number of shares, the Senior Preferred
Conversion Price in effect immediately prior to such subdivision shall
be proportionately reduced, and conversely, in case the outstanding
shares of Common Stock of the Corporation shall be combined into a
smaller number of shares, the Conversion Price in effect immediately
prior to such combination shall be proportionately increased.
(vi) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor, without deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in connection therewith.
In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for a consideration other than cash, the amount
of the consideration other than cash received by the Corporation shall
be deemed to be the fair value of such consideration as determined in
good faith by the Board of Directors of the Corporation, without
deduction of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Corporation in connection therewith.
The amount of consideration deemed to be received by the Corporation
pursuant to the foregoing provisions of this subparagraph (vi) upon any
issuance and/or sale of shares of Common Stock, Options or Convertible
Securities, pursuant to an established compensation plan of the
Corporation, to directors, officers or employees of the Corporation in
connection with their employment shall be increased by the amount of
any tax benefit realized by the Corporation as a result of such
issuance and/or sale, the amount of such tax benefit being the amount
by which the Federal and/or state income or other tax liability of the
Corporation shall be reduced by reason of any deduction or credit in
respect of such issuance and/or sale. In case any Options shall be
issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the parties
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thereto, such Options shall be deemed to have been issued without
consideration.
(vii) Record Date. In case the Corporation shall take a record
of the holders of its Common Stock for the purpose of entitling them
(A) to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities, or (B) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase,
as the case may be.
(e) Certain Issues of Stock Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not make any adjustment of the
Senior Preferred Conversion Price in the case of (i) the issuance of shares of
Common Stock upon conversion of Senior Preferred Stock; (ii) the issuance of
Options or shares of Common Stock to employees of the Corporation or its
subsidiaries, either directly or pursuant to Options, pursuant to plans or
arrangements approved by the Board of Directors of the Corporation; (iii) the
issuance of shares of Common Stock in respect of any Convertible Securities or
Options issued by the Corporation prior to the date of this Certificate of
Designations; (iv) the issuance of Common Stock or Options or Convertible
Securities as consideration in the acquisition by assumption or otherwise by the
Corporation of substantially all of the assets of any other entity or more than
50% of the voting power of any other entity, including by way of merger or
consolidation; or (v) the issuance of Options or Convertible Securities (or the
shares of Common Stock issuable upon conversion or exercise thereof) to banks or
other lenders as consideration for providing debt financing to the Corporation.
(f) Reorganization or Reclassification. If any capital
reorganization or reclassification of the capital stock of the Corporation (a
"Reorganization") shall be effected in such a way (including, without
limitation, by way of consolidation or merger) that holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such Reorganization, lawful
and adequate provision (in form satisfactory to the holders of a majority of the
then outstanding shares of Senior Preferred Stock) shall be made whereby each
holder of a share or shares of Senior Preferred Stock shall thereafter have the
right to receive, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock of the Corporation immediately
theretofore receivable upon the conversion of such share or shares of the Senior
Preferred Stock, such shares
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of stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately theretofore so receivable had such
Reorganization not taken place, and in any such case appropriate provision shall
be made with respect to the rights and interests of such holder to the end that
the provisions hereof (including without limitation provisions for adjustments
of the Senior Preferred Conversion Price) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such conversion rights (including an
immediate adjustment, by reason of such Reorganization, of the Senior Preferred
Conversion Price to the value for the Common Stock reflected by the terms of
such Reorganization if the value so reflected is less than the Senior Preferred
Conversion Price in effect immediately prior to such Reorganization). In the
event of a merger or consolidation of the Corporation as a result of which a
greater or lesser number of shares of common stock (or other equity interests,
of the case may be) of the surviving corporation or business entity are issuable
to holders of Common Stock of the Corporation outstanding immediately prior to
such merger or consolidation, the Senior Preferred Conversion Price in effect
immediately prior to such merger or consolidation shall be adjusted in the same
manner as though there were a subdivision or combination of the outstanding
shares of Common Stock of the Corporation. The Corporation will not effect any
Change of Control unless prior to the consummation thereof the acquiring
corporation or other business entity, or successor corporation or other business
entity (if other than the Corporation) resulting from such Change of Control, as
the case may be, shall assume by written instrument (in form reasonably
satisfactory to the holders of a majority of the shares of Senior Preferred
Stock at the time outstanding) executed and mailed or delivered to each holder
of a share or shares of Senior Preferred Stock at the last address of such
holder appearing on the books of the Corporation (or its transfer agent, if
any), the obligation to deliver to such holder such shares of stock, securities
or assets as, in accordance with the foregoing provisions, such holder may be
entitled to receive.
(g) Notice of Adjustment. Upon any adjustment of the Senior
Preferred Conversion Price, then and in each such case the Corporation shall
give written notice thereof, by first class mail, postage prepaid, addressed to
each holder of shares of Senior Preferred Stock at the address of such holder as
shown on the books of the Corporation (or its transfer agent, if any), which
notice shall state the Senior Preferred Conversion Price resulting from such
adjustment, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
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(h) Other Notices. In case at any time:
(i) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(ii) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any
class or other rights;
(iii) there shall be any Reorganization or Change of Control
or the Corporation shall become aware of any event or events that could
reasonably be expected to result in a Reorganization or Change of
Control; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, addressed to each holder of any shares of Senior
Preferred Stock at the address of such holder as shown on the books of the
Corporation (or its transfer agent, if any), (A) at least 15 days' prior written
notice of the date on which the books of the Corporation (or its transfer agent)
shall close or a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any such
Reorganization or Change of Control, and (B) in the case of any such
Reorganization or Change of Control, at least 15 days' prior written notice of
the date when the same shall take place. Such notice in accordance with the
foregoing clause (A) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (B) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such Reorganization or Change of Control, as the case
may be.
(i) Conversion at Corporation's Option. All outstanding shares
of Senior Preferred Stock shall, on or after June 30, 1999, at the option of the
Corporation, be automatically converted into Common Stock if at any time (i) the
Corporation shall effect a firm commitment public offering of Common Stock or
Convertible Securities registered pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), resulting in proceeds to the Corporation and/or
selling stockholders of not less than $20,000,000, after deduction of
underwriting discounts and commissions but before deduction of other expenses of
issuance, and in which the offering price to the public (or, in the case of a
sale of Convertible Securities, the price per share of Common
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Stock payable upon conversion thereof) is greater than the Senior Preferred
Conversion Price or (ii) the average closing sales price of Common Stock on one
or more national securities exchanges on which the Common Stock is listed or
quoted by NASDAQ or the OTC Bulletin Board over any period of twenty consecutive
trading days equals or exceeds 300% of the Senior Preferred Conversion Price and
the average daily trading volume for the Common Stock over such period equals or
exceeds 10,000,000 shares per week (as adjusted for stock splits, stock
dividends and other recapitalizations after the date of the first issuance of
Senior Preferred Stock). Such conversion shall be effected at the time of and
subject to the closing of the sale of such shares of Common Stock or on the
first trading day succeeding such trading period, as the case may be.
(j) Stock to be Reserved. The Corporation will at all times
reserve and keep available out of its authorized but unissued Common Stock,
solely for the purpose of issuance upon the conversion of the Senior Preferred
Stock as herein provided, such number of shares of Common Stock as shall then be
issuable upon the conversion of all outstanding shares of Senior Preferred
Stock. All shares of Common Stock which shall be so issued shall be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens
and charges arising out of or by reason of the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that the
par value per share of the Common Stock is at all times equal to or less than
the effective Senior Preferred Conversion Price. The Corporation will take all
such action within its control as may be necessary on its part to assure that
all such shares of Common Stock may be so issued without violation of any
applicable law or regulation, or of any requirements of any national securities
exchange upon which the Common Stock of the Corporation may be listed. The
Corporation will not take any action which results in any adjustment of the
Senior Preferred Conversion Price if after such action the total number of
shares of Common Stock issued and outstanding and thereafter issuable upon
exercise of all options and conversion of Convertible Securities, including upon
conversion of the Senior Preferred Stock, would exceed the total number of
shares of Common Stock then authorized by the Corporation's Restated Certificate
of Incorporation.
(k) No Reissuance of Senior Preferred Stock. Shares of Senior
Preferred Stock that are converted into shares of Common Stock as provided
herein shall not be reissued.
(l) Issue Tax. The issuance of certificates for shares of
Common Stock upon conversion of the Senior Preferred Stock shall be made without
charge to the holders thereof for any
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issuance tax in respect thereof, provided that the Corporation shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
holder of the Senior Preferred Stock which is being converted.
(m) Closing of Books. The Corporation will at no time close
its transfer books against the transfer of any Senior Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Senior Preferred Stock in any manner which interferes with the timely conversion
of such Senior Preferred Stock.
(n) Definition of Common Stock. As used in this paragraph 4,
the term "Common Stock" shall mean and include the Corporation's authorized
Common Stock, par value $.03 per share, as constituted on the date of filing of
this Certificate of Designations and shall also include any capital stock of any
class of the Corporation thereafter authorized that shall not be limited to a
fixed sum or percentage of par value in respect of the rights of the holders
thereof to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; provided, however, that such term, when used to describe the
securities receivable upon conversion of shares of the Senior Preferred Stock of
the Corporation, shall include only shares designated as Common Stock of the
Corporation on the date of filing of this Certificate of Designations, any
shares resulting from any combination or subdivision thereof referred to in
subparagraph (v) of paragraph 4(d), or in case of any reorganization or
reclassification of the outstanding shares thereof, the stock, securities or
assets provided for in paragraph 4(f).
5. Voting. Except as otherwise provided by law or in paragraph
6 below, the holders of Senior Preferred Stock shall vote together with the
holders of Common Stock on all matters to be voted on by the stockholders of the
Corporation, and each holder of Senior Preferred Stock shall be entitled to one
vote for each share of Common Stock that would be issuable to such holder upon
the conversion of all the shares of Senior Preferred Stock held by such holder
on the record date for the determination of stockholders entitled to vote.
6. Restrictions. So long as any shares of Senior Preferred
Stock are outstanding (except, with respect to clause (i) below, so long as at
least 25,000 shares of Senior Preferred Stock are outstanding), without the
consent of the holders of a majority of the Senior Preferred Stock at the time
outstanding given in person or by proxy, either in writing or at a special
meeting called for that purpose at which the holders of the Senior Preferred
Stock shall vote separately as a class, the
16
<PAGE> 17
Corporation may not (i) effect, validate or permit a Change of Control; (ii)
effect or validate the amendment, alteration or repeal of any provision hereof
which would amend or repeal the dividend, voting, conversion, redemption or
liquidation rights of the Senior Preferred Stock set forth herein; (iii) effect
or validate the amendment, alteration or repeal of any provision of the Restated
Certificate of Incorporation or the By-laws of the Corporation; or (iv) (A)
create or authorize any additional class or series of stock ranking senior to or
on a parity with the Senior Preferred Stock as to dividends or as to rights upon
redemption, liquidation, dissolution or winding up, or (B) increase the
authorized number of shares of the Senior Preferred Stock or of any other class
or series of capital stock of the Corporation ranking senior to or on a parity
with the Senior Preferred Stock as to dividends or as to rights upon redemption,
liquidation, dissolution or winding up, whether any such creation or
authorization or increase shall be by means of amendment hereof, amendment of
the Restated Certificate of Incorporation of the Corporation, Certificate of
Designations or amendment thereof, merger, consolidation or otherwise; provided,
however, that the restrictions set forth in clauses (i) and (iii) above shall
automatically terminate and be of no force and effect at the time the
Corporation shall consummate a public offering of Common Stock for cash for the
account of the Corporation registered under the Securities Act on a Form other
than Form S-4 or S-8 (or successor forms).
7. Reacquired Shares. Any shares of Senior Preferred Stock,
which are redeemed or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof
and the number of authorized shares of Senior Preferred Stock shall be reduced
accordingly.
17
<PAGE> 18
IN WITNESS WHEREOF, this Certificate of Designations has been
executed by the Corporation by its Chairman and Chief Executive Officer this
29th day of April, 1998.
AURORA ELECTRONICS, INC.
By /s/ STEVEN L. KORBY
---------------------------------
Steven L. Korby
Executive Vice President and
Chief Financial Officer
18
<PAGE> 1
EXHIBIT 4.4
FORM OF INDENTURE BETWEEN
THE REGISTRANT AND U.S. TRUST CORPORATION
THE CERPLEX GROUP, INC.
AND
U.S. TRUST CORPORATION
Trustee
------------------------
Indenture
Dated as of [ ], 1998
------------------------
Up to $2,747,890 Aggregate Principal Amount of
10% Series B Senior Subordinated Notes Due 2004
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 2
THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.05. Noteholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.07. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.08. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.09. Certain Notes Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.10. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 3
REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.01. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.02. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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SECTION 3.03. Mandatory Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.04. Selection of Notes to be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.05. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.07. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.08. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.09. Payment of Notes Called for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 4
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.01. Payment of Principal and Interest on the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.03. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.04. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.05. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.06. Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.08. Keeping of Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.09. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.10. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.11. Limitation on Indebtedness and Disqualified Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.12. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.13. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.14. Repurchase of Notes Upon a Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 5
SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.01. When Company May Merge, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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SECTION 5.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 6
DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.03. Waiver of Trial by Jury; Submission to Jurisdiction; Other Remedies. . . . . . . . . . . . . . . . . . . .
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.05. Waiver of Stay, Extension and Usury Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.06. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.08. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.09. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.10. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.11. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.12. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.13. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.14. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 7
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.05. Notice of Defaults or Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 8.01. Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 8.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 8.03. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 8.04. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.03. Interest Payment Postponements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.04. Revocation and Effect of Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 9.05. Notation on or Exchange of Notes
SECTION 9.06. Trustee to Sign Amendments, Etc.
SECTION 9.07. Conformity with Trust Indenture Act
ARTICLE 10
SUBORDINATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.01. Notes Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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SECTION 10.02. Payment Permitted if No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.03. Subrogation to Rights of Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.04. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.05. No Impairment of Rights of
Senior Indebtedness . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.06. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.07. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.08. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.09. Reliance on Judicial Order or Certificate of
Liquidation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 10.12. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.02. Communications by Holders With
Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.03. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.04. Record Date for Vote or Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.05. Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.06. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.08. No Adverse Interpretation of
Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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SECTION 11.09. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.10. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.11. Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.12. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 11.13. Table of Contents, Headings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
___________________
Note: This Table of Contents shall not, for any purpose, be
deemed to be a part of this Indenture.
7
<PAGE> 8
INDENTURE dated as of [ ], 1998 between THE CERPLEX GROUP,
INC., a Delaware corporation (the "Company"), and U.S. TRUST CORPORATION, as
Trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and
for the equal and ratable benefit of the Holders of the Company's 10% Series B
Senior Subordinated Notes due 2004.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control" when used with respect to any person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar or Paying Agent.
"Available Cash Proceeds" means the gross cash proceeds
received by the Company from any Sale or Issuance Transaction, less all fees
and expenses incurred in connection therewith, including, without limitation,
legal expenses, customary commissions, and all federal, state, local and
foreign taxes assessed in connection therewith.
"Blockage Notice" means a written notice from the holders of
Senior Indebtedness (or, in the case of the Credit Agreement, any Agent
thereunder) of a Nonmonetary Default pursuant to Section 10.02 of this
Indenture.
"Blockage Period" means a period of time commencing on the
earlier of the date of receipt of a Blockage Notice or the date of the
acceleration of the Notes and ending 179 days thereafter, provided that not more
than one Blockage Period may be commenced with respect to the Notes during any
period of 360 consecutive days.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
1
<PAGE> 9
"Change of Control" means (i) the sale, lease or transfer, whether
direct or indirect, of all or substantially all of the assets of the Company
and its subsidiaries, taken as a whole, in one transaction or a series of
related transactions, to any "person" or "group" (other than the WCAS Group),
(ii) the liquidation or dissolution of the Company or the adoption of a plan of
liquidation or dissolution of the Company, (iii) the acquisition of "beneficial
ownership" by any "person" or "group" (other than the WCAS Group) of voting
stock of the Company representing more than 50% of the voting power of all
outstanding shares of such voting stock, whether by way of merger or
consolidation or otherwise, or (iv) during any period of two consecutive years,
the failure of those individuals who at the beginning of such period
constituted the Company's Board of Directors (together with any new directors
whose election or appointment by such Board or whose nomination for election or
appointment by the shareholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) to constitute a majority of the Company's Board of
Directors then in office; provided, however, that in no event shall a
foreclosure on any collateral pledged by the Company in respect of obligations
arising under or in connection with the Credit Agreement constitute a Change of
Control. For purposes of this definition, the terms "person" and "group" shall
have the meaning set forth in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), whether or not applicable, (ii) the
term "beneficial owner" shall have the meaning set forth in Rules 13d-3 and
13d-5 under the Exchange Act, whether or not applicable, except that a person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time or upon the occurrence of certain events and
(iii) any "person" or "group" will be deemed to beneficially own any voting
stock of the Company so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the voting stock of a
registered holder of the voting stock of the Company.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Convertible Preferred Stock" means the 7% Senior Cumulative
Convertible Preferred Stock, $.01 par value, of the Company.
"Credit Agreement" means the Loan and Security Agreement among
the Company and certain of its affiliates as borrowers and the Senior Lender,
dated April 30, 1998,
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<PAGE> 10
together with any agreement entered into in connection with the restatement,
renewal, extension, restructuring, refunding or refinancing of any of the
obligations under such credit agreement.
"default" means any event which is, or after notice or passage
of time, or both, would be, an Event of Default.
"Excess Cash Flow" means, for any fiscal period of the
Company, an amount, computed in accordance with GAAP, which is equal to the sum
of (i) the excess of (I) the sum (without duplication) of (A) net income for
such fiscal period; (B) expenses for such fiscal period for depreciation,
amortization and other similar non-cash charges, to the extent that the same are
deducted from net revenues in determining net income for such fiscal period; (C)
the difference between (1) the amount of taxes imposed on the Company deducted
from net revenues to determine net income for such fiscal period and (2) the
amount of taxes actually paid by the Company during such fiscal period; and (D)
the difference between (1) any extraordinary or non-recurring items of expense
deducted from net revenues to determine net income for such fiscal period and
(2) the aggregate amount of all cash payments made by the Company during such
period on account of extraordinary or non-recurring items of expense, whether or
not accrued in such period; over (II) the sum (without duplication) of (A) the
aggregate amount during such fiscal period of scheduled payments of principal on
(x) the Notes and the WCAS VII Notes, (y) the indebtedness under the Credit
Agreement and (z) any indebtedness permitted under the Credit Agreement; (B) the
amount of actual payments by the Company in cash during such fiscal period for
capital expenditures; (C) the amount of the payments required to be made with
respect to such fiscal period under the Credit Agreement under provisions
thereof having the same purpose and effect of Section 3.03 hereof; and (D) the
difference between (1) any extraordinary or non-recurring items of income added
to net revenues to determine net income and (2) the aggregate amount of all cash
receipts received by the Company during such period on account of extraordinary
or non-recurring items of income, whether or not accrued in such period; and
(ii) plus (in the case of a decrease) or minus (in the case of an increase) the
change in the amount of working capital as at the end of such fiscal period as
compared with the amount of working capital as at the end of the immediately
preceding fiscal period.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP means generally accepted accounting principles in the
United States of America as in effect as of the Closing Date.
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<PAGE> 11
"Holder" or "Noteholder" means the person in whose name a Note
is registered on the Registrar's books.
"indebtedness" means indebtedness for money borrowed.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Lien" means any pledge, charge, security interest or
encumbrance.
"Notes" means the 10% Series B Senior Subordinated Notes due
2004, or any of them, as amended or supplemented from time to time, that are
issued under this Indenture.
"Offer to Purchase" means an offer, made pursuant to a writing
(an "Offer Document") sent by the Company by first class mail, postage prepaid,
to each Holder at his address appearing in the register of Holders of Notes
maintained by the Registrar on the date of the Offer Document, to purchase up to
the principal amount of Notes specified in such Offer Document at the purchase
price specified in such Offer Document (as determined pursuant to this
Indenture). The Offer Document shall specify an expiration date (the
"Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 20 days or more than 60
days after the date of such Offer Document and a settlement date (the "Purchase
Date") for purchase of Notes within five Business Days after the Expiration
Date. The Company shall notify the Trustee at least 15 Business Days (or such
shorter period as is acceptable to the Trustee) prior to the mailing of the
Offer Document of the Company's obligation to make an Offer to Purchase, and the
Offer Document shall be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company. The Offer Document
shall contain information concerning the business of the Company and its
Subsidiaries which the Company in good faith believes will enable such Holders
to make an informed decision with respect to the Offer to Purchase (which at a
minimum will include (i) the most recent annual and quarterly financial
statements and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the documents required to be filed with the
Trustee pursuant to Section 4.02 (which requirements may be satisfied by
delivery of such documents together with the Offer Document), (ii) a description
of material developments in the Company's business subsequent to the date of the
latest of financial statements referred to in clause (i) (including a
description of the events requiring the Company to make the Offer to Purchase),
(iii) if applicable,
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<PAGE> 12
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring the Company to make the Offer to Purchase and (iv) any
other information required by applicable law to be included therein. The Offer
Document shall contain all instructions and materials necessary to enable such
Holder to tender Notes pursuant to the Offer to Purchase. The Offer Document
shall also state:
(1) the Section of this Indenture pursuant to which the
Offer to Purchase us being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding
Notes offered to be purchased from such Holder by the Company pursuant to the
Offer to Purchase;
(4) the purchase price to be paid by the Company for each
$83.33 aggregate principal amount of Notes accepted for payment (as specified
pursuant to this Indenture);
(5) that the Holder may tender all or any portion of the
Notes registered in the name of such Holder and that any portion of a Note
tendered must be tendered in the integral multiple of $83.33 of principal
amount;
(6) the place or places where Notes are to be surrendered
pursuant to the Offer to Purchase;
(7) that interest on any Note (or portion thereof) not
tendered or tendered but not purchased by the Company pursuant to the Offer to
Purchase will continue to accrue;
(8) that on the Purchase Date the purchase price will
become due and payable upon each Note (or portion thereof) accepted for payment
pursuant to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(9) that each Holder electing to tender a Note pursuant
to the Offer to Purchase will be required to surrender such Note at the place
or places specified in the Offer Document prior to the close of business on the
Expiration Date (such Note being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing);
(10) each Holder will be entitled to withdraw all or any
portion of the Notes tendered by it if the Company (or its Paying Agent)
receives, not later than the close of business on the
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<PAGE> 13
Expiration Date, a telegram, telex, facsimile transmission or letter setting
forth the name of such Holder, the amount of the Notes such Holder tendered, the
certificate numbers of the Notes the Holder tendered and a statement that such
Holder is withdrawing all or a portion of such Holder's tender;
(11) that in case of any Holder whose Note is purchased
only in part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of the
Notes so tendered.
Any Offer to Purchase shall be governed by and effected in
accordance with the Offer Document for such Offer to Purchase.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two
Officers of the Company. One of the officers signing an Officers' Certificate
pursuant to Section 11.04 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"person" means any individual, corporation, partnership, joint
venture, limited liability entity, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of a debt security, including the Notes and the
WCAS VII Notes, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
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<PAGE> 14
"Purchase Agreement" means the Securities Purchase and
Exchange Agreement dated as of January 30, 1998, among the Company, WCAS VII,
WCAS CP II and the several purchasers named on Schedule I thereto.
"redemption date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"redemption price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption by or pursuant to this
Indenture.
"Sale or Issuance Transaction" means (i) any sale, transfer,
lease, sale and leaseback or other disposition by the Company to any person of
all or any part of its property or assets, in any case in a single transaction
or a series of related transactions (other than any of the foregoing for fair
value of property that (x) is of inventory in the ordinary course of business or
(y) is of worn-out or obsolete assets); or (ii) the issuance (other than by
dividend or upon the exercise of employee stock options) of any capital stock or
other ownership interest of the Company pursuant to an offering or offerings
registered under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Indebtedness" 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 and including any loans made to the Company as a debtor in
possession in any bankruptcy proceeding by any persons who were holders of any
Senior Indebtedness on the date such bankruptcy proceeding was commenced) on,
and all reasonable fees, reimbursement and indemnity obligations, and all other
obligations arising in connection with, any indebtedness for borrowed money of
the Company, contingent or otherwise, now outstanding or created, incurred,
issued, assumed or guaranteed in the future, arising under the Credit Agreement
or, in the case of any other indebtedness, if the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such indebtedness shall not be subordinate in right of payment to
any other indebtedness of the Company, including without limitation, all
"Obligations" (as such term is defined in the Credit Agreement) under the Credit
Agreement. Notwithstanding the foregoing, Senior Indebtedness shall include
only such Obligations (as defined in the Credit Agreement) until such time as
the same are indefeasibly paid in full in cash and all obligations to provide
financial accommodations under the Credit Agreement have terminated.
"Senior Lender" means Greyrock Business Credit, a division of
NationsCredit Commercial Corporation.
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<PAGE> 15
"Subsidiary" means, with respect to any person, any
corporation, association or other business entity (a) of which more than 50% of
the voting power of the outstanding capital stock is owned, directly or
indirectly, by such person or by such person and one or more other Subsidiaries
of such person or (b) which is consolidated in such person's consolidated
financial statements in accordance with GAAP.
"TIA" means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990 and as in effect on the date of this
Indenture, except as provided in Section 9.03 hereof.
"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 the successor.
"Trust Officer" means any Account Manager or officer within
the Corporate Trust Services Department (or any successor group) of the
Trustee, including without limitation any Vice President, Assistant Vice
President, any trust officer, any Assistant Secretary or any other officer
customarily performing functions similar to those performed by any of the
above-designated officers who shall, in any case, be responsible for the
administration of this Indenture or have familiarity with it, and also means,
with respect to a particular corporate matter, any other officer of the Trustee
to whom corporate trust matters are referred because of his knowledge of and
familiarity with the particular subject.
"U.S. Government Obligations" means direct non-callable
obligations of, or non-callable obligations guaranteed by, the United States of
America for the payment of which guarantee or obligation the full faith and
credit of the United States is pledged.
"WCAS VII" means Welsh, Carson, Anderson & Stowe VII, L.P., a
Delaware limited partnership.
"WCAS CP II" means WCAS Capital Partners II, L.P., a Delaware
limited partnership.
"WCAS Group" means WCAS VII, WCAS CP II, any general partners
thereof and any other investment limited partnerships or other investment
entities under common control therewith.
"WCAS VII Notes" means the 10% Series A Senior Subordinated
Notes due 2004, or any of them, as amended or supplemented from time to time,
that have been acquired by WCAS VII pursuant to the Purchase Agreement.
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<PAGE> 16
SECTION 1.02. OTHER DEFINITIONS
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"Bankruptcy Law"...................................... 6.01
"Custodian"........................................... 6.01
"Event of Default".................................... 6.01
"Legal Holiday"....................................... 11.06
"Nonmonetary Default"................................. 10.02
"Paying Agent"......................................... 2.03
"Registrar"............................................ 2.03
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other terms used in this Indenture that are defined in 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 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
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<PAGE> 17
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words
in the plural include the singular;
(4) provisions apply to successive events and
transactions; 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.
(6) all computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition
of GAAP set forth in Section 1.01.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, which are incorporated in and
made part of this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rules or agreements to which the
Company is subject or by usage. The Company shall approve the form of the
Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its authentication.
The Notes shall be issued only in denominations of $83.33 and
integral multiples thereof. The face of the Notes shall be and the reverse of
the Notes shall contain terms and provisions substantially in the form set
forth in Exhibit A hereof. The Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
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<PAGE> 18
SECTION 2.02. EXECUTION AND AUTHENTICATION
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue in the
aggregate principal amount of up to $2,747,890, upon a written order or orders
of the Company signed by an Officer of the Company. The order shall specify
the amount of Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated. The aggregate principal amount of Notes
outstanding at any time may not exceed $2,747,890, except as provided in
Section 2.07.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
The Notes shall be issuable only in registered form, without
coupons.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency at the office of
the Trustee in New York City where Notes may be presented for registration of
transfer or for exchange ("Registrar"), where Notes may be presented for payment
("Paying Agent"), and an where 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 may
have one or more co-Registrars and one or more additional Paying Agents. The
term "Registrar" includes any co-Registrar and the term "Paying Agent" includes
any additional Paying Agent. Except for purposes of Article 8, the Company or
any Affiliate of the Company may act as Paying Agent.
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<PAGE> 19
The Company shall enter into an appropriate agency agreement
with any Agent who is not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company fails to maintain a Registrar, Paying
Agent, or agent for service of notices and demands, or fails to give the
foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar,
Paying Agent, and agent for service of notices and demands. The Company may
remove any Agent upon written notice to such Agent and the Trustee; provided
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
On or prior to each due date of the principal of or interest
on any Notes, the Company shall deposit with the Paying Agent a sum sufficient
to pay such principal or interest so becoming due. The Paying Agent shall hold
in trust for the benefit of Noteholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Notes, and
shall notify the Trustee of any default by the Company (or any other obligor on
the Notes) in making any such payment. If the Company or an Affiliate of the
Company acts as Paying Agent, it shall on or before each due date of the
principal of or interest on any Notes segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and the Trustee may at any time during the
continuance of any default, upon written request to a Paying Agent, require
such Paying Agent to forthwith pay to the Trustee all sums so held in trust by
such Paying Agent. Upon doing so, the Paying Agent (other than the Company)
shall have no further liability for the money.
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 Noteholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least seven days prior to each interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Noteholders.
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<PAGE> 20
SECTION 2.06. TRANSFER AND EXCHANGE
When a Note is presented to the Registrar with a request to
register a transfer thereof, the Registrar shall register the transfer as
requested and when Notes are presented to the Registrar with a request to
exchange them for an equal principal amount of Notes of other authorized
denominations, the Registrar shall make the exchange as requested; provided
that every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's request. Any exchange or
transfer shall be without charge, except that the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto, but this provision shall not apply to any exchange
pursuant to Section 2.10, 3.06 or 9.05.
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, and neither the Company nor the Trustee has received notice that such
Note has been acquired by a bona fide purchaser, the Company shall issue and
the Trustee shall authenticate a replacement Note if the requirements of
Section 8-405 of the New York Uniform Commercial Code, as in effect on the date
of this Indenture, are met, and there shall have been delivered to the Company
and the Trustee evidence to their satisfaction of the loss, destruction or
theft of any Note if such is the case. An indemnity bond may be required that
is sufficient in the judgment of 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 for its expenses in replacing a
Note. Every replacement Note is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING NOTES
Notes outstanding at any time are all Notes authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to
be outstanding until the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
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<PAGE> 21
If the Paying Agent (other than the Company or an Affiliate of
the Company) holds on a redemption date or maturity date money sufficient to
pay the principal of and accrued interest on Notes payable on that date, then
on and after that date such Notes cease to be outstanding and interest on them
ceases to accrue.
A Note does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Note.
SECTION 2.09. CERTAIN NOTES DISREGARDED
In determining whether the Holders of the required principal
amount of Notes have concurred in any notice, direction, waiver or consent,
Notes owned by the Company or any other obligor on the Notes or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Notes which the
Trustee knows are so owned shall be so disregarded. Notes so owned which have
been pledged in good faith shall not be disregarded if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect
to the Notes and that the pledgee is not the Company or any other obligor upon
the Notes or any Affiliate of the Company or of such other obligor.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and, upon the order of the Company, the Trustee shall authenticate
temporary Notes. 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 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 Paying Agent shall forward to the Trustee any
Notes surrendered to them for transfer, exchange, or payment. The Trustee and
no one else shall cancel all Notes surrendered for transfer, exchange, payment
(including redemption), or cancellation and shall dispose of cancelled Notes as
the Company shall direct. The Company may not issue new Notes to replace Notes
it has paid or delivered to the Trustee for cancellation.
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<PAGE> 22
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest to the persons who are Note holders on a
subsequent special record date, and such term as used in this Section 2.12 with
respect to the payment of any defaulted interest, shall mean the fifteenth day
next preceding the special payment date fixed by the Company, whether or not
such day is a Business Day. At least 15 days before the special record date,
the Company shall mail to each Noteholder and the Trustee a notice that states
the special record date, the special payment date and the amount of defaulted
interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. OPTIONAL REDEMPTION.
(a) Notes may be redeemed, at the Company's option, in whole
or in part at any time and from time to time at the principal amount thereof,
together with accrued interest to the redemption date.
(b) The Company may redeem, upon prior written notice of not
less than five business days, all or any portion of the Notes of any Holder who
has withheld its consent to the waiver of any covenant, condition, default or
Event of Default under this Indenture requested by the Company. The redemption
price of any Notes so redeemed shall equal the principal amount thereof,
together with accrued interest to the redemption date.
SECTION 3.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to
Section 3.01 shall be evidenced by a resolution of the Board of Directors of the
Company. In case of a redemption at the election of the Company, the Company
shall, if the election is pursuant to paragraph (a) of Section 3.01 not less
than 20 nor more than 60 days prior to the redemption date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such redemption date and the principal amount of the Notes to be
redeemed.
SECTION 3.03. MANDATORY REDEMPTIONS.
Subject to the terms of the Credit Agreement, (a) within 150
days after the end of each fiscal year of the Company, the Company shall apply
100% of the Excess Cash Flow of the Company to the redemption of the Notes and
the WCAS Notes; and (b) within 50 days after the consummation of any Sale or
Issuance Transaction by the Company, the Company shall apply 100% of its
Available Cash Proceeds of such Sale or Issuance Transaction to the redemption
of the Notes and the WCAS VII Notes. The Company shall, not less than 45 nor
more than 60 days prior to the date of any redemption required pursuant to this
Section 3.03, notify the Trustee of any such redemption, its associated
redemption date and the principal amount of the Notes to be redeemed and the
accrued interest thereon through such redemption date. To the extent that any
redemption pursuant to this Section 3.03 is of less than all of the Notes and
WCAS VII Notes then outstanding, such redemption shall be made on a pro rata
basis with respect to the Notes and the WCAS VII Notes, based on the aggregate
principal amount of Notes and the WCAS VII Notes then outstanding.
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SECTION 3.04. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed pursuant to
Section 3.01(a) at any time, the Trustee shall select the Notes to be redeemed
from the outstanding Notes not previously called for redemption on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate and which may provide for the selection for
redemption of portions equal to $83.33 in principal amount or any integral
multiple thereof.
The Trustee shall promptly notify the Company and the Registrar
in writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of the Notes,
shall relate, in the case of any Notes redeemed or to be redeemed only in part,
to the portion of the principal amount of such Notes which has been or is to be
redeemed.
SECTION 3.05. NOTICE OF REDEMPTION
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed (if pursuant to paragraph (a) of Section 3.01 or Section
3.03) not less than 30 nor more than 60 days prior to the redemption date, to
each Holder of Notes to be redeemed, at his address appearing in the Register of
Notes.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for complete redemption must be
surrendered to the Paying Agent in order to collect the redemption price;
(v) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed (equal to $83.33 in principal
amount or any integral multiple thereof) and that, on and after the redemption
date, upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion thereof will be reissued and authenticated at
no expense to the Holder;
(vi) that, unless the Company defaults in making the
redemption payment, interest on Notes (or any portion thereof) called for
redemption ceases to accrue on and after the redemption
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date and the only remaining right of the Holders with respect to such Notes (or
the portion thereof called for redemption) is to receive payment of the
redemption price plus accrued and unpaid interest to the redemption date upon
surrender thereof to the Paying Agent; and
(vii) the aggregate principal amount of Notes being redeemed.
SECTION 3.06. NOTES REDEEMED IN PART.
If any Note is being redeemed in part, upon surrender of such
Note, the Company shall execute and issue and the Trustee shall authenticate
and deliver to the Holder of such Note, without service charge, a new Note or
Notes, in principal amount equal to the unredeemed portion thereof.
SECTION 3.07. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption has been made, Notes called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender of any Notes to the Paying Agent, such Notes shall be
paid at the redemption price, plus accrued and unpaid interest to the redemption
date. In any event, failure to give notice to a Holder, or any defect therein,
shall not affect the validity of the proceedings for the redemption of Notes
held by Holders to whom such notice was properly given.
SECTION 3.08. DEPOSIT OF REDEMPTION PRICE.
In connection with any redemption pursuant to this Article 3,
the Company shall deposit with the Paying Agent money in immediately available
funds sufficient to pay the redemption price of and accrued and unpaid interest
on all Notes to be redeemed on the scheduled redemption date other than Notes or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation. Such funds to be deposited by the
Company with the Paying Agent shall be deposited: (i) if in connection with the
redemption pursuant to Section 3.01, on or prior to 10:00 a.m., New York time on
the scheduled redemption date; (ii) if in connection with a redemption pursuant
to Section 3.03 due to the existence of Excess Cash Flow, within 105 days after
the end of the fiscal year in which such Excess Cash Flow existed; and (iii) if
in connection with a redemption pursuant to Section 3.03 due to a Sale or
Issuance Transaction, within 50 days after the consummation of such transaction.
Until disbursed to the Holder on the scheduled redemption date,
funds received by the Paying Agent in connection with clauses (ii) and (iii)
above, shall be invested by the Paying Agent in U.S. Government Obligations and
all interest and income with respect thereto shall be for the account of the
Company.
SECTION 3.09. PAYMENT OF NOTES CALLED FOR REDEMPTION.
If notice of redemption has been given in the manner provided
above, the Notes or portion of Notes specified in such notice to be redeemed
shall become due and payable on the redemption date at the redemption price
stated therein, together with accrued and unpaid interest to such redemption
date, and on and after such date (unless the Company shall default in the
payment of such Notes at the redemption price and accrued and unpaid interest
to the redemption date, in which case the principal, until paid, shall bear
interest from the Redemption Date at the rate prescribed in the Notes), such
Notes shall cease to accrue interest. Upon surrender of any Note for redemption
in accordance with a notice of redemption, such Note shall be paid and redeemed
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by the Company at the redemption price, together with accrued and unpaid
interest to the redemption date; provided that installments of interest whose
record date is prior to the redemption date shall be payable to the Holders
registered as such at the close of business such record date, if any.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST ON THE NOTES.
The Company will use its best efforts, subject to the
provisions of applicable credit arrangements (including the Credit Agreement),
contractual obligations of the Company and/or its subsidiaries and any
applicable law restricting the same, to provide funds from its Subsidiaries to
the Company, by dividend, advance or otherwise, sufficient to permit payment by
the Company of the principal of and interest on this Note in accordance with
its terms. Subject to any applicable provisions in the Credit Agreement and
documents executed and delivered in connection therewith, the Company will not,
and will not permit any Subsidiary to, directly or indirectly create or
otherwise cause to exist any encumbrance or restriction on the ability of any
Subsidiary to pay dividends or make any other distributions to the Company or
any wholly-owned Subsidiary of the Company in respect of its capital stock.
SECTION 4.02. SEC REPORTS.
Whether or not the Company is then required to file reports
with the SEC, the Company shall file all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act as if it were subject thereto, and within 15 days
after it files them with the SEC, the Company shall file copies of all such
reports, information and other documents with the Trustee. The Company will
cause copies of such reports and other information to be mailed to the Holders
of the Notes.
SECTION 4.03. COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee, within 45 days
after the end of each fiscal quarter (90 days after the end of the last fiscal
quarter of each year), an Officers' Certificate stating whether or not the
signers know of any default or Event of Default that occurred during such fiscal
quarter. In the case of the Officers' Certificate delivered within 90 days of
the end of the Company's fiscal year, such certificate shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer of the Company that a review has been conducted
of the activities of the Company
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and its Subsidiaries and the Company's and its Subsidiaries' performance under
this Indenture and that the Company has complied with all conditions and
covenants under this Indenture. For purposes of this Section 4.03, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If any of the signers of
the Officers' Certificate have knowledge of such a Default or Event of Default,
the certificate shall describe any such Default or Event of Default and its
status. The first certificate to be delivered pursuant to this Section 4.03
shall be for the first fiscal quarter beginning after the execution of this
Indenture.
(b) The Company shall deliver to the Trustee, within 90 days after the
end of each of the Company's fiscal years, a certificate signed by the Company's
independent certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and the Notes
as they relate to accounting matters, (ii) that they have read the most recent
Officers' Certificate delivered to the Trustee pursuant to paragraph (a) of this
Section 4.03 and (iii) whether, in connection with their audit examination,
anything came to their attention that caused them to believe that the Company
was not in compliance with any of the terms, covenants, provisions or conditions
of Article Four and Section 5.01 of this Indenture as they pertain to accounting
matters and, if any Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; provided that such
independent certified public accountants shall not be liable in respect of such
statement by reason of any failure to obtain knowledge of any such Default or
Event of Default that would not be disclosed in the course of an audit
examination conducted in accordance with generally accepted auditing standards
in effect at the date of such examination.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.
SECTION 4.04. PAYMENT OF TAXES.
The Company will promptly pay and discharge or cause to be
paid and discharged, before the same shall become in default, all material
lawful taxes and assessments imposed upon the Company or any of its
Subsidiaries or upon the income and profits of the Company or any of its
Subsidiaries, or upon any property, real, personal or mixed, belonging to the
Company or any of its Subsidiaries, or upon any part thereof by the United
States or any State thereof, as well as all material lawful claims for labor,
materials and supplies which, if unpaid, would become a
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lien or charge upon such property or any part thereof; provided, however, that
neither the Company nor any of its Subsidiaries shall be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as both (x) the Company has established adequate
reserves for such tax, assessment, charge, levy or claim and (y)(i) the Company
or a Subsidiary shall be contesting the validity thereof in good faith by
appropriate proceedings or (ii) the Company shall, in its good faith judgment,
deem the validity thereof to be questionable and the party to whom such tax,
assessment, charge, levy or claim is allegedly owed shall not have made written
demand for the payment thereof.
SECTION 4.05. CORPORATE EXISTENCE.
Subject to Article 5, the Company will do or cause to be done
all things necessary and lawful to preserve and keep in full force and effect
(i) its corporate existence and the corporate existence of each of its
Subsidiaries and (ii) the material rights and franchises of the Company and
each of its Subsidiaries under the laws of the United States or any state
thereof, or, in the case of Subsidiaries organized and existing outside the
United States, under the laws of the applicable jurisdiction; provided,
however, that nothing in this Section 4.05 shall prevent the abandonment or
termination of any rights or franchises of the Company, or the liquidation or
dissolution of, or a sale, transfer or disposition (whether through merger,
consolidation, sale or otherwise) of all or any substantial part of the
property and assets of, any Subsidiary or the abandonment or termination of the
corporate existence, rights and franchises of any Subsidiary if such
abandonment, termination, liquidation, dissolution, sale, transfer or
disposition is, in the good faith business judgment of the Company, in the best
interests of the Company and not disadvantageous to the holders of the Notes.
SECTION 4.06. MAINTENANCE OF PROPERTY.
The Company will at all times maintain and keep, or cause to
be maintained and kept, in good repair, working order and condition (reasonable
wear and tear excepted) all significant properties of the Company and its
Subsidiaries used in the conduct of the business of the Company and its
Subsidiaries, and will from time to time make or cause to be made all needful
and proper repairs, renewals, replacements, betterments and improvements
thereto, so that the business of the Company and its Subsidiaries may be
conducted at all times in the ordinary course consistent with past practice.
SECTION 4.07. INSURANCE.
The Company will, and will cause each of its Subsidiaries to,
(i) keep adequately insured, by financially sound and
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reputable insurers, all property of a character usually insured by corporations
engaged in the same or a similar business similarly situated against loss or
damage of the kinds customarily insured against by such corporations and (ii)
carry, with financially sound and reputable insurers, such other insurance
(including without limitation liability insurance) in such amounts as are
available at reasonable expense and to the extent believed advisable in the
good faith business judgment of the Company.
SECTION 4.08. KEEPING OF BOOKS.
The Company will at all times keep, and cause each of its
Subsidiaries to keep, proper books of record and account in which proper
entries will be made of its transactions in accordance with generally accepted
accounting principles consistently applied.
SECTION 4.09. TRANSACTIONS WITH AFFILIATES.
The Company shall not enter into, or permit any of its
Subsidiaries to enter into, any transaction with any of its or any Subsidiary's
officers, directors, employees or any person related by blood or marriage to
any such person or any entity in which any such person owns any beneficial
interest, except for (i) normal employment arrangements, benefit programs and
employee incentive option programs on reasonable terms, (ii) any transaction
approved by the Board of Directors of the Company in accordance with the
provisions of Section 144 of the Delaware General Corporation Law, or otherwise
permitted by such Section, (iii) customer transactions in the ordinary course
of business and on arm's length terms and (iv) the transactions contemplated by
the Purchase Agreement.
SECTION 4.10. NOTICE OF CERTAIN EVENTS.
The Company shall, immediately after it becomes aware of the
occurrence of (i) any default or Event of Default (as hereinafter defined), or
(ii) any action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or agency which, if adversely determined, would
materially impair the right of the Company to carry on its business
substantially as now or then conducted, or would have a material adverse effect
on the properties, assets, financial condition, prospects, operating results or
business of the Company and its subsidiaries taken as a whole, give notice to
the Holders of the Notes, specifying the nature of such event.
SECTION 4.11. LIMITATION ON INDEBTEDNESS AND DISQUALIFIED STOCK.
The Company will not, and will not permit any of its
Subsidiaries to, (i) incur or permit to remain outstanding any
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indebtedness, except (A) Senior Indebtedness, (B) indebtedness existing on the
date of original issuance of the Notes, (C) indebtedness permitted to be
incurred under the Credit Agreement as in effect from time to time after the
original issuance of the Notes (other than indebtedness that is subordinate or
junior in right of payment (to any extent) to any Senior Indebtedness and
senior or pari passu in right of payment (to any extent) to the Notes and the
WCAS VII Notes), or (D) in the event that the Credit Agreement has terminated,
indebtedness permitted to be incurred under any successor credit agreement of
the Company with respect to Senior Indebtedness, or if there exists no such
credit agreement, such Indebtedness as may be mutually agreed upon by the
Company and the holders of a majority of the aggregate principal amount of the
Notes and the WCAS VII Notes then outstanding, or (ii) issue any capital stock
of the Company or any of its subsidiaries (other than the Convertible Preferred
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, whether pursuant to a sinking
fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to December 31, 2004.
SECTION 4.12. RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its
Subsidiaries to: (i) declare or pay any dividends on, or make any other
distribution or payment on account of, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, any shares of any class of stock of the
Company, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash, property or
in obligations of the Company or any of its Subsidiaries, except for (X)
distributions of shares of the same class or of a different class of stock pro
rata to all holders of shares of a class of stock, (Y) the payment of cash
dividends on account of the Convertible Preferred Stock, or (Z) dividends,
distributions or payments by any Subsidiary to the Company or to any
wholly-owned Subsidiary of the Company, or (ii), except as permitted under the
Credit Agreement, make any payments of principal of, or retire, redeem,
purchase or otherwise acquire any Indebtedness other than any Senior
Indebtedness, the WCAS VII Notes or the Notes.
SECTION 4.13. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist any Liens on any asset now owned or hereafter
acquired, or on any income or profits therefrom or assign or convey any right
to receive income therefrom, except for (i) Liens permitted under the Credit
Agreement, (ii) liens for current taxes not yet due, (iii) landlord's liens,
(iv)
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purchase money liens and (v) workman's, materialman's, warehouseman's and
similar liens arising by law or statute.
SECTION 4.14. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL.
(a) Subject to the terms of the Credit Agreement, upon the
occurrence of any Change of Control, each Holder shall have the right to require
the repurchase of its Notes by the Company in cash pursuant to an Offer to
Purchase at a purchase price equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase. Subject only to
the limitations of Article Ten, the Company shall, within five (5) days
following the date of the consummation of a transaction resulting in a Change of
Control, mail an Offer Document with respect to an Offer to Purchase all
outstanding Notes. Each Holder shall be entitled to tender all or any portion
of the Notes owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Note tendered must be in an integral
multiple of $83.33 principal amount.
(b) Prior to the time required for the mailing of an Offer
Document with respect to an Offer to Purchase pursuant to paragraph (a), the
Company will in good faith (i) seek to obtain any required consent of the
holders of Senior Indebtedness so as to permit the making of the Offer to
Purchase and the purchase of the Notes pursuant to this Section 4.14, or (ii)
repay all or a portion of the holders of Senior Indebtedness to the extent
necessary (including, if necessary, payment in full of such Senior Indebtedness
and payment of any prepayment premiums, fees, expenses or penalties) to permit
the making of the Offer to Purchase and the purchase of Notes pursuant to this
Section 4.18 without such consent. Following compliance by the Company with
the requirements of the foregoing sentence, the Company shall, within the time
required for the mailing of an Offer Document with respect to an Offer to
Purchase pursuant to paragraph (a), mail such Offer. Failure to comply with
such requirements shall not relieve the Company of its obligations under
paragraph (a) of this Section 4.14.
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(c) On the Purchase Date of the Offer to Purchase, the Company
will (i) accept for payment the Notes or portions thereof validly tendered
pursuant to the offer to Purchase, (ii) promptly mail to the Holders of the
Notes so accepted for payment an amount equal to the purchase price of the
Notes (or portions thereof) accepted for payment and shall promptly mail or
deliver to such holders a new Note equal in principal amount of the portion of
the Notes surrendered. Any Notes not so accepted for payment will be promptly
mailed or delivered to the Holders.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC.
The Company will not consolidate or merge with or into, or sell or otherwise
dispose of all or substantially all of its property in one or more related
transactions to, any other corporation or other entity, unless:
(i) the Company is the surviving corporation or the
entity formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale or other disposition
shall have been made is a corporation organized or existing under the
laws of the United States of any state thereof or the District of
Columbia;
(ii) the surviving corporation or other entity (if other
than the Company) shall expressly and effectively assume in writing
the due and punctual payment of the principal of and interest on this
Note, according to its tenor, and the due and punctual performance and
observance of all the terms, covenants, agreements and conditions of
this Note to be performed or observed by the Company to the same
extent as if such surviving corporation had been the original maker of
this Note;
(iii) the Company or such other corporation or other entity
shall not otherwise be in default in the performance or observance of
any covenant, agreement or condition of this Note or this Indenture;
and
(iv) the Trustee shall have received, in connection
therewith, an opinion of counsel for the Company (or other counsel
satisfactory to the holder), in form and substance satisfactory to the
Trustee, to the effect that any such consolidation, merger, sale or
conveyance and any such assumption complies with the provisions of this
Section 5.01.
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Notwithstanding anything to the contrary herein, in no event shall a
foreclosure on any collateral pledged by the Company in respect of obligations
arising under or in connection with the Credit Agreement be deemed to
constitute a violation of the Company's obligations pursuant to this Section
5.01.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01,
the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
If any one or more of the following events, herein called
"Events of Default," shall occur (for any reason whatsoever, and whether such
occurrence shall, on the part of the Company or any of its Subsidiaries, be
voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order of a court of
competent jurisdiction or any order, rule or regulation of any administrative
or other governmental authority) and such Event of Default shall be continuing:
(i) default shall be made in the payment of the principal
of or premium, if any, on the Notes when and as the same shall become
due and payable, whether at maturity or at a date fixed for redemption
or repurchase (including default of any payment in respect of Notes
that have been called for redemption pursuant to Section 3.01 or 3.03
and any default, on the applicable payment date, in the purchase of
Notes that are required to be purchased by the Company pursuant to an
Offer to Purchase as to which an Offer Document has been mailed to
Noteholders, as the case may be) or by acceleration or otherwise; or
(ii) default shall be made in the payment of any
installment of interest on the Notes according to their terms when and
as the same shall become due and payable; or
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(iii) default shall be made in the due observance or
performance of any covenant, condition or agreement on the part of the
Company contained in Section 5.01; or
(iv) default shall be made in the due observance or
performance of any other covenant, condition or agreement on the part
of the Company to be observed or performed pursuant to the terms hereof
(other than a covenant or warranty a default in the performance of
which is specifically dealt with elsewhere in this Section), and such
default shall continue for 20 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Notes outstanding a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(v) any representation or warranty made by or on behalf
of the Company herein shall prove to have been false or incorrect in
any material respect on the date on or as of which made; or
(vi) default in the Company's observance or performance of
any covenant, condition or agreement contained in the WCAS VII Note or
the Purchase Agreement and such default is not cured or waived within
20 days after notice thereof is served by WCAS VII upon the Company; or
(vii) the entry of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Company or any
of its subsidiaries in any involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar
laws, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or any of
its subsidiaries for any substantial part of any of their property or
ordering the winding-up or liquidation of any of their affairs and the
continuance of any such decree or order unstayed and in effect for a
period of 30 consecutive days; or
(viii) the commencement by the Company or any of its
subsidiaries of a voluntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or any other applicable federal
or state bankruptcy, insolvency or other similar laws, or the consent
by any of them to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) of the Company or any of its subsidiaries for
any substantial part of any of their property, or the making by
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any of them of any general assignment for the benefit of creditors, or
the failure of the Company or of any of its subsidiaries generally to
pay its debts as such debts become due, or the taking of corporate
action by the Company or any of its subsidiaries in furtherance of or
which might reasonably be expected to result in any of the foregoing;
or
(ix) default or an event of default as defined in any
instrument evidencing or under which the Company or any of its
subsidiaries has outstanding at the time any Indebtedness in excess of
$500,000 in aggregate principal amount shall occur and as a result
thereof the maturity of any such Indebtedness shall have been
accelerated so that the same shall have become due and payable prior
to the date on which the same would otherwise have become due and
payable and such acceleration shall not have been rescinded or
annulled within 20 days; or
(x) final judgment (not reimbursed by insurance policies
of the Company or any of its subsidiaries) for the payment of money in
excess of $500,000 shall be rendered against the Company or any of its
subsidiaries and the same shall remain undischarged for a period of 30
days during which execution shall not be effectively stayed;
Subject to the provisions of Sections 7.01 and 7.02, the
Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer at the
corporate trust office of the Trustee by the Company, the Paying Agent, any
Holder or an agent of any Holder.
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SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default
specified in Section 6.01(vii) or (viii)) occurs and is continuing, the Trustee
may, by notice to the Company, or the Holders of at least 25% in principal
amount of the Notes then outstanding may, by notice to the Company and the
Trustee, and the Trustee shall, upon the request of such Holders, declare all
unpaid principal of and accrued interest to the date of acceleration on the
Notes then outstanding (if not then due and payable) to be due and payable and
upon any such declaration, the same shall become and be immediately due and
payable. If an Event of Default specified in Section 6.01(vii) or (viii)
occurs, all unpaid principal and accrued interest on the Notes then outstanding
shall ipso facto become due and payable immediately without any declaration or
other act on the part of the Trustee or any Noteholder.
At any time after any declaration of acceleration has been
made as provided in this Section 6.02, and before a judgement or decree form
payment of money due has been obtained by the Trustee as hereinafter in this
Article provided, the holders of a majority in principal amount of the Notes
then outstanding may, by notice to the Company, rescind such declaration and
its consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Notes,
(B) the principal of (and premium, if any, on) any
Notes which have become due otherwise than by such declaration
of acceleration (including any Notes required to have been
purchased on the Purchase Date pursuant to an Offer to
Purchase made by the Company) and, to the extent that payment
of such interest is lawful, interest thereon at the rate
provided by the Notes,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate provided by
the Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
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(2) all Events of Default, other than the non-payment of the
principal of Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.04.
No such rescission shall extend to or affect any subsequent default or Event of
Default or impair any right consequent thereon.
SECTION 6.03. WAIVER OF TRIAL BY JURY; SUBMISSION TO JURISDICTION; OTHER
REMEDIES.
The Company hereby waives any right to trial by jury in any
legal proceeding related in any way to this Indenture or any Note and agrees
that any such proceeding may, if the Trustee or any Holder who is entitled to
bring such proceeding so elects, be brought and enforced in the Supreme Court of
the State of New York for New York County or the United States District Court
for the Southern District of New York and the Company hereby waives any
objection to jurisdiction or venue in any such proceeding commenced in such
court. The Company further agrees that any process required to be served on it
for purposes of any such proceeding may be served on it, with the same effect as
personal service on it within the State of New York, by registered mail
addressed to it at its office or agency set forth in Section 11.02 for purposes
of notices hereunder.
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 the 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 Noteholder 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 6.02, 6.07 and 9.02, the Holders of at
least a majority in aggregate 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, premium, if any,
or interest on any Note as specified in clause (i) or (ii) of Section 6.01 or in
respect of a covenant or provision of this Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereto.
SECTION 6.05. WAIVER OF STAY, EXTENSION AND USURY DEFENSE.
The Company covenants (to the extent it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of, premium, if any, or interest on the
Notes as contemplated herein, wherever enacted, now or at any time hereafter
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in force, or that may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 6.06. CONTROL BY MAJORITY.
The Holders of at least a majority in aggregate principal
amount of the outstanding Notes, by notice to the Trustee, may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that may involve the Trustee in personal
liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Notes pursuant to this Section 6.06.
SECTION 6.07. LIMITATION ON SUITS.
A Holder may not institute any proceeding, judicial or
otherwise, with respect to this Indenture or the Notes for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless: (i) such Holder
has previously given to the Trustee written notice of a continuing Event of
Default; (ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder; (iii) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liabilities or
expenses to be incurred in compliance with such request; (iv) the Trustee for 60
days after its receipt of such notice, request and offer of indemnity has failed
to institute any such proceeding; and (v) during such 60-day period, the Holders
of a majority in aggregate principal amount of the outstanding Notes have not
given the Trustee a direction that is inconsistent with such written request.
For purposes of Section 6.06 of this Indenture and this Section 6.07, the
Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
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.
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SECTION 6.08. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of the principal of, premium,
if any, or interest on such Holder's Note on or after the respective due dates
expressed on such Note (including in a notice with respect to an Offer to
Purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.09. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in the payment of principal or interest
specified in Section 6.01(i) or (ii) 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, in each case at the rate per annum borne by the Notes
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.10. 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,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to the Company (or any
other obligor on the Notes), its creditors or its 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 proceeding is hereby authorized by each
Noteholder 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
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07, and to
the extent that such payment for the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of
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the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
Noteholders may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or the Trustee to authorize or accept or adopt on behalf of any
Noteholder 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 Noteholder in any such
proceeding.
SECTION 6.11. PRIORITIES.
Subject to Article 10, the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
7.07;
Second: to Noteholders 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
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.11.
SECTION 6.12. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as 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 defense made by the party
litigant. This Section 6.12 does not apply to a suit made by the Trustee, a
suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than
10% in principal amount of the Notes then outstanding.
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or wrongfully taken Notes in Section
2.06, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is
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intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Six or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and
use the same degree of care and skill in their
exercise as a prudent person would exercise or use
under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee need perform only those
duties as are specifically set forth in this
Indenture and no others; and
(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon
certificates or opinions furnished to the
Trustee and conforming to the requirements of
this Indenture. The Trustee, however, shall
examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture.
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(c) The Trustee may not be relieved from
liability for its own negligent action, its
own negligent failure to act, or its own
willful misconduct, except that:
(1) this 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 is proved that the Trustee
was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable
with respect to any action it takes
or omits to take in good faith in
accordance with a direction received
by it pursuant to Section 6.06.
(d) The Trustee may refuse to perform
any duty or exercise any right or power under
this Indenture unless it receives indemnity
satisfactory to it against any loss,
liability, expense or fee.
(e) 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 received by it except
as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee
need not be segregated from other funds
except to the extent required by law.
(g) No provision of this Indenture shall
require the Trustee to expend or risk its own
funds or incur any liability. The Trustee
shall be under no obligation to exercise any
of its rights and powers under this Indenture
at the request of any Holder, unless such
Holder shall have offered to the Trustee
security and indemnity satisfactory to it
against any loss, liability or expense.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may conclusively rely on
any document believed by it to be genuine and
to have been signed or presented by the proper
person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains
from acting, it may require an Officer's
Certificate or an Opinion of Counsel, which
shall conform to Section 11.03(b). The
Trustee shall not be liable
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for any action it takes or omits to take in
good faith in reliance on such Certificate or
Opinion.
(c) The Trustee may act through its
agents and shall not be responsible for the
misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for
any action it takes or omits to take in good
faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel
and the advice or opinion of such counsel as
to matters of law shall be full and complete
authorization and protection in respect of
any action taken, omitted or suffered by it
hereunder in good faith and in accordance
with the advice or opinion of such counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or an
affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes,
and it shall not be responsible for any statement in the Notes other than its
certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS OR EVENTS 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 Noteholder
notice of the default or Event of Default within 90 days after it occurs.
Except in the case of a default or an Event of Default in payment of the
principal of or interest on any Note, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interest of Noteholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each [__________] beginning with the
[__________] following the date of this Indenture, the
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Trustee shall mail to each Noteholder a brief report dated as of such
[__________] that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Notes are listed. The Company shall
notify the Trustee whenever the securities become listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for
all reasonable disbursements, expenses and advances incurred or made by it.
Such expenses may include the reasonable compensation, disbursements and
expenses of Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss, liability or expense incurred by it in connection
with its duties under this Indenture. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall cooperate
in the defense. The Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its written consent.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it through its
negligence or willful misconduct.
To secure the Company's payment obligations in this Section,
the Trustee shall have a senior claim to which the Notes are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on
particular Notes. The obligations of the Company under this Section 7.07 to
compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that
of the Notes upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Notes. The obligation of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(vii) and (viii)
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occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
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 Notes then outstanding may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee with the Company's written consent. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an 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 promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of 10% in principal amount of the Notes then outstanding
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
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer all property held by it as Trustee to
the successor Trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
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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 assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided such transferee
corporation shall qualify and be eligible under Section 7.10.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). If at any
time the Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this Article 7. The
Trustee shall comply with the provisions of TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A trustee who has
resigned or been removed shall be comply with TIA Section 311(a) to the extent
indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
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 money has theretofore been held in trust and thereafter repaid to
the Company, as provided in Section 8.03) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, then the
Company's obligations under the Notes and this Indenture shall be terminated.
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After such irrevocable deposit, the Trustee
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.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust, for the
benefit of the Holders, money deposited with it pursuant to Section 8.01, and
shall apply the deposited money in accordance with this Indenture to the payment
of the principal of and interest on the Notes.
SECTION 8.03. REPAYMENT TO COMPANY.
Subject to Section 8.01, the Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money held by them
at any time.
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 after a right to such money has matured;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such 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, Noteholders entitled to money must look to the Company for payment as
general creditors unless otherwise prohibited by law.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money
in accordance with Section 8.01 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01 until such time as the Trustee or
Paying Agent is
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permitted to apply all such money; provided, however, that if the Company has
made any payment of the principal of or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive any such payment from the money held by
the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(a) to comply with Sections 4.04 and 5.01;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(c) to cure any ambiguity, defect or
inconsistency, or to make any other change that does
not adversely affect the rights of any Noteholder; or
(d) to comply with the provisions of the TIA, to the
extent applicable.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Sections 6.04 and 6.07 and without prior notice to
the Holders, the Company, when authorized by its Board of Directors (as
evidenced by a Board Resolution), and the Trustee may amend this Indenture and
the Notes with the written consent of the Holders of not less than a majority in
principal amount of the Notes then outstanding, and the Holders of not less than
a majority in principal amount of the Notes then outstanding by written notice
to the Trustee may waive future compliance by the Company with any provision of
this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without
the consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) change the stated maturity of the principal of, or any
installment of interest on, any Note;
(ii) reduce the principal amount of, or premium, if any, or
interest on, any Note;
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(iii) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of any
payment on a Note on or after the stated maturity thereof (or, in the case of a
redemption, on or after the redemption date) of any Note;
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend this Indenture;
(vi) waive a default in the payment of principal of, premium, if
any, or interest on the Notes;
(vii) reduce the percentage of aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults; or
(viii) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holder
of each outstanding Note affected thereby.
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
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 amendment, supplement or
waiver.
SECTION 9.03. INTEREST PAYMENT POSTPONEMENTS.
Holders of not less than 75% of the principal amount of the
Notes outstanding may consent on behalf of the Holders of all of the Notes to
the postponement of any or all payments of interest on the Notes for a period
of up to three years from the date or dates on which such interest payments are
due.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENT.
Until an amendment or waiver 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 Note
of the consenting Holder, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as
to its Note or portion of its Note. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver
shall become effective on receipt by the Trustee of written consents from the
Holders of
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the requisite percentage in principal amount of the outstanding Notes.
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. If a record date is fixed, then,
notwithstanding the last two sentences 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 consent to such amendment,
supplement or waiver or 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 is of the type described in any of clauses
(i) through (v) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (v) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder to deliver the Note to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation on
any Note thereafter authenticated. 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. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture. Subject to the preceding sentence,
the Trustee shall sign such amendment, supplement or waiver if the same does
not adversely affect the rights of the Trustee. The Trustee may, but shall not
be obligated to, execute any such amendment, supplement or waiver that affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
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SECTION 9.07. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
Nine shall conform to the requirements of the TIA as then in effect.
ARTICLE 10
SUBORDINATION OF NOTES
SECTION 10.01. NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each holder of a Note,
by his or her acceptance thereof, likewise covenants and agrees, that, anything
contained in this Indenture to the contrary notwithstanding, the payment of the
principal of, premium, if any, and interest on, each and all of the Notes are
hereby expressly made subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, to the extent hereinafter set
forth. Notwithstanding anything herein to the contrary (and without limiting
any of the other provisions hereof), notwithstanding any default or event of
default with respect to the subordinated debt evidenced by the Notes, the
holders of the Notes will take no action to accelerate or enforce the Notes or
any rights or remedies relating thereto against the Company (including without
limitation the commencement of, or joining in, any involuntary bankruptcy
petition or similar judicial proceeding against the Company) until the
expiration of six months after written notice of default is given by such
holders to the Senior Lender.
(A) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership proceedings in
connection therewith, relative to the Company or its creditors or its property,
and in the event of any proceedings for voluntary liquidation, dissolution or
other winding up of the Company, whether or not involving insolvency or
bankruptcy proceedings, then all Senior Indebtedness shall first be paid in
full in cash and all obligations to provide financial accommodations under the
Credit Agreement have terminated, before any payment, whether on account of
principal, interest or otherwise, is made upon the Notes.
(B) In any of the proceedings referred to in paragraph (A) above,
any payment or distribution of any kind or character, whether in cash,
property, stock or obligations which may be payable or deliverable in respect
of the Notes shall be paid or delivered directly to the holders of Senior
Indebtedness for application in payment thereof, unless and until all Senior
Indebtedness shall have been paid in full in cash and all obligations to
provide financial accommodations under the Credit Agreement have terminated.
(C) No payment shall be made, directly or indirectly, on account
of the Notes (i) upon maturity of any Senior Indebtedness obligation, by lapse
of time, acceleration (unless waived), or otherwise, unless and until all
principal thereof and interest thereon and all other obligations in respect
thereof shall first have been paid in full in cash and all obligations to
provide financial accommodations under the Credit Agreement have terminated, or
(ii) upon the happening of any default in payment of any principal of, premium,
if any, or interest on or any other amounts payable in respect of Senior
Indebtedness when the same becomes due and payable whether at maturity or at a
date fixed
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for prepayment or by declaration or otherwise, unless and until such shall have
been cured or waived or shall have ceased to exist.
(D) Upon the happening of an event of default (other than described
in clause (A), (B), or (C) above) with respect to any Senior Indebtedness
permitting (after notice or lapse of time or both) one or more holders of such
Senior Indebtedness (or, in the case of the Credit Agreement, the Senior Lender)
to declare such Senior Indebtedness due and payable prior to the date on which
it is otherwise due and payable (a "Nonmonetary Default"), upon the (i) receipt
by the Trustee of a Blockage Notice, or (ii) if such Nonmonetary Default results
from the acceleration of the Notes, the date of such acceleration, then (x) the
Company will not make, directly or indirectly, to the holder of the Notes any
payment of any kind of or on account of all or any part of the Notes; (y)
neither the Trustee nor the Holders of the Notes will accept from the Company
any payment of any kind of or on account of all or any part of the Notes; and
(z) neither the Trustee nor the Holders of the Notes may take, demand, receive,
sue for, accelerate or commence any remedial proceedings with respect to any
amount payable under the Notes, unless and until in each case described in
clauses (x), (y) and (z), all such Senior Indebtedness shall have been paid in
full in cash and all obligations to provide financial accommodations under the
Credit Agreement have terminated; except, following the termination of a
Blockage Period, the Company will be permitted to make and the Trustee and the
Holders of the Notes will be permitted to accept payments in respect of the
indebtedness under the Notes if, as, when and to the extent that such payments
are made pursuant to the proviso to Section 14(a)(D) of the WCAS VII Notes, it
being understood that all such payments shall be made on a pro rata basis
between the Holders of the Notes and the holders of the WCAS VII Notes.
After payment in full of all amounts due or to become due on
all Senior Indebtedness, or provision is made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, all payments or distributions shall be applied to the payment of
the principal and premium, if any, and accrued interest on the Notes and the
WCAS VII Notes, pro rata based on the aggregate principal amount of Notes and
the WCAS VII Notes then outstanding.
If any payment or distribution of any character or any
security, whether in cash, securities or other property, shall be received by
the Trustee or any Holder of Notes in contravention of any of the terms hereof
or before all the Senior Indebtedness obligations have been paid in full in cash
and all obligations to provide financial accommodations under the Credit
Agreement have terminated, and if the fact that such payment was in
contravention shall, at or prior to the time such payment is paid by the
Trustee to the Holders, have been made known to the Trustee, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing
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among such holders for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all such Senior Indebtedness
in full in cash. In the event of the failure of any such Holder to endorse or
assign any such payment, distribution or security, each holder of any Senior
Indebtedness is hereby irrevocably authorized to endorse or assign the name.
The obligations of the Holders under this Article shall
continue to be effective, or be reinstated, as the case may be, if at any time
any payment in respect of any Senior Indebtedness, or any other payment to any
holder of any Senior Indebtedness in its capacity as such, is rescinded or must
otherwise be restored or returned by the holder of such Senior Indebtedness
upon the occurrence of any proceeding referred to in paragraph (A) above or
upon or as a result of the appoint of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Company or any substantial part of its
property or otherwise, all as though such payment had not been made.
Notwithstanding anything to the contrary herein, the Company
shall not at any time offer (and the Holders shall not at any time accept) (i)
any pledge of collateral or (ii) any guaranty by any parent or subsidiary of the
Company, in each case with respect to the obligations of the Company under the
Notes.
SECTION 10.02. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this
Indenture or in any of the Notes shall prevent (a) the Company, at any time
except during the pendency of any Proceeding referred to or under the conditions
described in Section in Section 10.01(A)-(D), from making payment on the Notes,
or (b) the applications by the Trustee of any money deposited with it hereunder
to Payments on the Notes or the retention of such Payments by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that
such Payments would have been prohibited by the provisions of this Article.
SECTION 10.03. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full in cash of all Senior
Indebtedness as aforesaid and the termination of all obligations to provide
financial accommodations under the Credit Agreement, the Noteholders shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of any kind or character, whether in cash, property,
stock or obligations, which may be payable or deliverable to the holders of
Senior Indebtedness, until the principal of, and interest on, the Notes shall
be paid in full in cash, and, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the Noteholders, no such payment or
distribution made to the holders of Senior Indebtedness by virtue of this
Article 10 which otherwise would have been made to the holder of the Notes
shall be deemed a payment by the Company on account of the Senior Indebtedness,
it being understood that the provisions of this Article 10 are and are intended
solely for the purposes of defining the relative rights of the Noteholders, on
the one hand, and the holder of the Senior Indebtedness, on the other hand.
Subject to the rights, if any, under this Article 10 of holders of Senior
Indebtedness to receive cash, property, stock or obligations otherwise payable
or deliverable to the Noteholders, nothing herein shall either impair, as
between the Company and the holder of the Notes, the obligation of the Company,
which is unconditional and absolute, to pay to the holder thereof the principal
thereof and interest thereon in accordance with its terms or prevent (except as
otherwise specified therein) the Noteholders from exercising all remedies
otherwise permitted by applicable law or hereunder upon default hereunder.
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SECTION 10.04. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
(a) impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Noteholders, the obligation of the Company which is
absolute and unconditional (and which, subject to :he rights under this Article
of the holders of Senior Indebtedness, is intended to rank equally with all
other general obligations of the Company), to pay to the Noteholders the
principal of (and premium, if any) and interest on the Notes as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Noteholders and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 10.05 No Impairment of Rights of Senior Indebtedness.
The rights under these subordination provisions of
the holders of any Senior Indebtedness as against any Noteholders shall remain
in full force and effect without regard to, and shall not be impaired or
affected by:
(1) any act or failure to act on the part of the
Company; or
(2) any creation of Senior Indebtedness or any
extension or indulgence in respect of any payment or prepayment of any
Senior Indebtedness or any part thereof or in respect of any other
amount payable to any holder of any Senior Indebtedness; or
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<PAGE> 54
(3) any amendment, modification or waiver of, or
addition or supplement to, or deletion from, or compromise, release,
consent or other action in respect of, any of the terms of any Senior
Indebtedness or any other agreement which may be made relating to any
Senior Indebtedness; or
(4) any exercise or non-exercise by the holder of
any Senior Indebtedness of any right, power, privilege or remedy under
or in respect of such Senior Indebtedness or these subordination
provisions or any waiver of any such right, power, privilege or remedy
or of any default in respect of such Senior Indebtedness or these
subordination provisions or any receipt by the holder of any Senior
Indebtedness of any security, or any failure by such holder to perfect
a security interest in, or any release by such holder of, any security
for the payment of such Senior Indebtedness; or
(5) any merger or consolidation of the Company or
any of its subsidiaries into or with any other person, or any sale,
lease or transfer of any or all of the assets of the Company or any of
its subsidiaries to any other person; or
(6) absence of any notice to, or knowledge by, any
holder of any claim hereunder of the existence or occurrence of any of
the matters or events set forth in the foregoing clauses (1) through
(5); or
(7) any other circumstance.
The Noteholders unconditionally waive (i) notice of any of the
matters referred to in this Section 10.05; (ii) all notices which may be
required, whether by statute, rule of law or otherwise, to preserve intact any
rights of any holder of any Senior Indebtedness, including, without limitation,
any demand, presentment and protest, proof of notice of nonpayment under any
Senior Indebtedness or the Credit Agreement, and notice of any failure on the
part of the Company to perform and comply with any covenant, agreement, term or
condition of any Senior Indebtedness, (iii) any right to the enforcement,
assertion or exercise by any holder of any Senior Indebtedness of any right,
power, privilege or remedy conferred in such Senior Indebtedness or otherwise,
(iv) any requirements of diligence on the part of any holder of any of the
Senior Indebtedness, (v) any requirement on the part of any holder of any
Senior Indebtedness to mitigate damages resulting from any default under such
Senior Indebtedness and (vi) any notice of any sale, transfer or other
disposition of any Senior Indebtedness by any holder thereof.
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SECTION 10.06. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Noteholders,
without incurring responsibility to the Noteholders and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Noteholders to the holders of Senior Indebtedness, 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 Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) permit the Company to borrow, repay and then reborrow any
or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iv) release any Person liable in any manner for the collection
of Senior Indebtedness; and (v) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 10.07. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.08. 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. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not he
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the Company or
a holder of Senior Indebtedness or from any trustee therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist;
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provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date. Any notice required or permitted
to be given to the Trustee by a holder of Senior Indebtedness shall be in
writing and shall be sufficient for every purpose hereunder if in writing and
either (i) sent via facsimile to the Trustee at (212) ____________ or at any
other facsimile number furnished in writing to such holder of Senior
Indebtedness by the Trustee, or (ii) mailed, first-class postage prepaid, or
sent by overnight carrier, to the Trustee addressed to it at its address
specified in Section 11.01 or at any other address furnished in writing to such
holder of Senior Indebtedness by the Trustee.
Subject to the provisions of Section 7.01, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee or
agent therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee or agent therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article , the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article,
and if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 10.09. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATION AGENT.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
7.01, and the Noteholders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent
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or other Person making such payment or distribution, delivered to the Trustee
or to the Holders of Notes, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 10.10. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to Holders of Notes
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
SECTION 10.11. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
SECTION 10.12. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee", as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 10.12 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE 11
MISCELLANEOUS
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SECTION 11.01. NOTICES.
Any notice or communication shall be given in writing and
delivered in person or mailed by certified or registered mail, return receipt
requested, addressed as follows:
if to the Company:
Aurora Electronics, Inc.
9477 Waples Street, Suite 150
San Diego, California 92121
Attention: President
if to the Trustee:
U.S. Trust Corporation
114 W. 47th Street
New York, New York 10036
Attention: Corporate Trust
Administration
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Noteholder shall be
mailed by first-class mail to him at his address shown on the register kept by
the Registrar.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication to a Noteholder is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.
SECTION 11.02. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate in the manner provided in TIA
Section 312(b) with other Noteholders 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 Section 312(c).
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
(a) Upon any request or application by the Company to the
Trustee to take any action under this Indenture,
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the Company shall furnish to the Trustee at the request of the
Trustee:
(1) an Officer's Certificate stating that, in the
opinion of the signer, all conditions precedent
(including any covenants compliance with which
constitutes a condition precedent), 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 (including any covenants compliance with
which constitutes a condition precedent) have been
complied with.
(b) Each Officer's Certificate and Opinion of Counsel
with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate
or opinion are based;
(3) a statement that, in the opinion of such
person, he has made such examination or investigation
as is necessary to enable him to express an informed
opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the
opinion of such person, such condition or covenant
has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may
rely on an Officer's Certificate or certificates of
public officials.
SECTION 11.04. RECORD DATE FOR VOTE OR CONSENT OF NOTEHOLDERS.
The Company may set a record date for purposes of determining
the identity of Noteholders entitled to vote or consent to any action by vote
or consent authorized or permitted under this Indenture, which record date
shall be the later of 10 days prior to the first solicitation of such vote or
consent or
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the date of the most recent list of Noteholders furnished to the Trustee
pursuant to Section 2.05 hereof prior to such solicitation. If a record date
is fixed, those persons who were Holders of Notes at such record date (or their
duly designated proxies), and only those persons, shall be entitled to take
such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date.
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules
for its functions.
SECTION 11.06. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which
state or Federally chartered banking institutions in New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 11.07. GOVERNING LAW.
The laws of the State of New York shall govern this Indenture
and the Notes without regard to principles of conflicts of law.
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 11.09. NO RECOURSE AGAINST OTHERS.
All liability described in paragraph 16 of the Notes of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
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SECTION 11.11. MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 11.12. SEPARABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the __ day of ____________, 1998.
THE CERPLEX GROUP, INC.
By:
---------------------
Name:
Title:
[SEAL]
Attest:
-----------------
Secretary
U.S. TRUST CORPORATION,
as Trustee
By:
----------------------
Name:
Title:
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<PAGE> 63
EXHIBIT A
[FACE OF NOTE]
Number
$
The Cerplex Group, Inc.
10% Series B Senior Subordinated Note due 2004
The Cerplex Group, Inc., a Delaware corporation, promises to
pay to The Cerplex Group, Inc. or registered assigns on each of December 31,
2002, 2003 and 2004, the lesser of 33 1/3% of the original principal amount
hereof and the principal amount hereof then outstanding.
Additional provisions of this Note are set forth on the other
side of this Note.
Dated:
The Cerplex Group, Inc.
By:
----------------------
By:
----------------------
(Seal)
Certificate of Authentication:
This is one of the Notes referred
to in the within mentioned Indenture.
U.S. Trust Corporation, as Trustee,
By:
--------------------
Authorized Signatory
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<PAGE> 64
[REVERSE SIDE]
1. INTEREST.
The Cerplex Group, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note
outstanding at the rate per annum shown above, except that if the principal
amount hereof shall not be paid when due, whether at maturity or by acceleration
or otherwise, interest shall be paid at the rate of 12% per annum. Interest
shall be paid semi-annually in arrears on June 30 and December 31 of each year
(each said day being an "Interest Payment Date"), until the principal amount
hereof shall have become due and payable, whether at maturity or by acceleration
or otherwise. Interest on this Note will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
first issuance of the Notes under the Indenture (as defined below); provided
that, if there is no existing default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof and
the next succeeding interest payment date, interest shall accrue from such
interest payment date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Notes (except defaulted
interest) to the person who is the registered holder of this Note at the close
of business on the record payment date established by the Company. The holder
must surrender this Note to the Paying Agent to collect payment of principal.
The Company will 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.
The Company, however, may pay principal and interest by its check payable in
such money. It may mail an interest check to the holder's registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, U.S. Trust Corporation (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company may act as Paying Agent or
Registrar.
4. INDENTURE, LIMITATIONS.
The Company issued this Note under an Indenture dated as of
[ ], 1998 (the "Indenture"), between the Company and the Trustee. The terms of
this Note include those stated in the Indenture.
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<PAGE> 65
This Note is subject to all such terms, and the holder of this Note is referred
to the Indenture and said Act for a statement of them. The Notes are general
unsecured obligations of the Company limited to up to $2,747,890 aggregate
principal amount.
5. OPTIONAL REDEMPTION.
The Notes may be redeemed, at the Company's option, in whole
or in part at any time and from time to time at a redemption price equal to the
principal amount thereof, together with accrued interest to the date fixed for
redemption. In addition, the Company may redeem, at such redemption price, all
or any portion of the Notes of any Holder who has withheld its consent to the
waiver of any covenant, condition, default or Event of Default under the
Indenture requested by the Company.
6. MANDATORY REDEMPTION
Subject to the terms of the Senior Indebtedness, within 150
days after the end of each fiscal year of the Company, the Company shall apply
100% of the Excess Cash Flow of the Company to the redemption of the Notes and
the WCAS Notes; and (b) within 50 days after the consummation of any Sale or
Issuance Transaction by the Company, the Company shall apply 100% of its
Available Cash Proceeds of such Sale or Issuance Transaction to the redemption
of the Notes and the WCAS VII Notes. To the extent that any such redemption is
of less than all of the Notes and WCAS VII Notes then outstanding, such
redemption shall be made on a pro rata basis with respect to the Notes and the
WCAS VII Notes, based on the aggregate principal amount of Notes and the WCAS
VII Notes then outstanding.
Once notice of redemption has been made, Notes called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender of any Notes to the Paying Agent, such Notes shall be
paid at the redemption price, plus accrued and unpaid interest to the
redemption date. In any event, failure to give notice, or any defect therein,
shall not affect the validity of the proceedings for the redemption of Notes
held by Holders to whom such notice was properly given.
7. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
the Indenture to each Holder of Notes to be redeemed, at his address appearing
in the Register of Notes.
8. REPURCHASE UPON CHANGE OF CONTROL.
Subject to the terms of the Senior indebtedness, upon the
occurrence of any Change of Control, each Holder shall have the right to
require the repurchase of its Notes by the Company in cash pursuant to the
offer described in the Indenture at a
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purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase. Subject to the limitations
of Article Ten of the Indenture, the Company shall, within five (5) days
following the date of the consummation of a transaction resulting in a Change
of Control, the Company will make an Offer to Purchase all of the outstanding
Notes and will mail an Offer Document with respect thereto to each Holder of
Notes. Each such Holder will be entitled to tender all or any portion of the
Notes owned by such Holder pursuant to the Offer to Purchase, subject to the
requirement that any portion of a Note tendered must be tendered in an integral
multiple of $83.33 principal amount. On and after the Payment Date pursuant to
such Offer to Purchase, interest will cease to accrue on Notes or portions of
Notes surrendered for purchase by the Company, except for Notes which the
Company has failed to purchase and pay for.
8. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form without coupons. A holder
may 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 any taxes or other
governmental charges that may be imposed by law or permitted by the Indenture.
The Notes are issued in denominations of $83.33 or integral multiples thereof.
9. PERSONS DEEMED OWNERS.
The registered holder of a Note may be treated as the owner of
it for all purposes.
10. UNCLAIMED MONEY.
If money for the payment of principal or interest on the Notes
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, holders entitled to money must
look to the Company for payment.
11. AMENDMENT, SUPPLEMENT, WAIVER.
With certain exceptions specified in the Indenture, the
Company, and the Trustee may amend the Indenture and the Notes with the written
consent of the Holders of not less than a majority in principal amount of the
Notes then outstanding, and the Holders of not less than a majority in
principal amount of the Notes then outstanding by written notice to the Trustee
may waive future compliance by the Company with any provision of this Indenture
or the Notes.
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12. SUCCESSOR CORPORATION.
When a successor corporation assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor corporation
will be released from those obligations.
13. DEFAULTS AND REMEDIES.
An Event of Default shall occur if: (i) a default is made in
the payment of the principal of the Notes when and as the same shall become due
and payable, whether at maturity or at a date fixed for prepayment or
repurchase (including default in the payment of any amount required to be paid
in respect of redemptions or any Offer to Purchase pursuant to Section 4.14 of
the Indenture or by acceleration or otherwise; or (ii) default is made in the
payment of any installment of interest on the Notes according to their terms
when and as the same shall become due and payable; (iii) default is made in the
due observance or performance of any covenant, condition or agreement on the
part of the Company contained in Section 5.01 of the Indenture; (iv) default
shall be made in the due observance or performance of any other covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to the terms hereof (other than a covenant or warranty a default in
whose performance is elsewhere in this Section specifically dealt with), and
such default shall continue for 20 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the Notes
outstanding a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default";
(v) any representation or warranty made by or on behalf of the Company herein
shall prove to have been false or incorrect in any material respect on the date
on or as of which made; (vi) default in the Company's observance or performance
of any covenant, condition or agreement contained in the WCAS VII Note or the
Purchase Agreement and such default is not cured or waived within 20 days after
the occurrence or, discovery thereof; (vii) the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of the Company
or any of its subsidiaries in any involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or any other applicable federal
or state bankruptcy, insolvency or other similar laws, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Company or any of its subsidiaries for any substantial part of any of their
property or ordering the winding-up or liquidation of any of their affairs and
the continuance of any such decree or order unstayed and in effect for a period
of 30 consecutive days; (viii) the commencement by the Company or any of its
subsidiaries of a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar laws, or the
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consent by any of them to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or any of its subsidiaries for any substantial
part of any of their property, or the making by any of them of any general
assignment for the benefit of creditors, or the failure of the Company or of
any of its subsidiaries generally to pay its debts as such debts become due, or
the taking of corporate action by the Company or any of its subsidiaries in
furtherance of or which might reasonably be expected to result in any of the
foregoing; (ix) a default or an event of default as defined in any instrument
evidencing or under which the Company or any of its subsidiaries has
outstanding at the time any Indebtedness in excess of $500,000 in aggregate
principal amount shall occur and as a result thereof the maturity of any such
Indebtedness shall have been accelerated so that the same shall have become due
and payable prior to the date on which the same would otherwise have become due
and payable and such acceleration shall not have been rescinded or annulled
within 20 days; or (x) final judgment (not reimbursed by insurance policies of
the Company or any of its subsidiaries) for the payment of money in excess of
$500,000 shall be rendered against the Company or any of its subsidiaries and
the same shall remain undischarged for a period of 30 days during which
execution shall not be effectively stayed.
If an Event of Default (other than as a result of certain
events of bankruptcy or insolvency), occurs and is continuing, the Trustee or
the holders of at least 25% in principal amount of the Notes
at the time outstanding may, at their option, by a notice in writing to the
Company and the Trustee, declare all unpaid principal of and accrued interest
on the Notes outstanding to be immediately due and payable, without diligence,
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by the Company to the extent permitted by law, as provided in
the Indenture. If an Event of Default occurs as a result of certain events of
bankruptcy or insolvency, all unpaid principal of and accrued interest on the
Notes then outstanding shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and to
the extent provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Notes. Subject to certain
limitations, holders of at least a majority in principal amount of the Notes
then outstanding may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing default (except
a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The
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Company is required to file periodic reports with the Trustee as to the absence
of default.
14. SUBORDINATION. To the extent set forth in the Indenture, the payment
of the principal of, premium, if any, and interest on, each and all of the Notes
are subordinate and junior in right of payment to the prior payment in full of
all Senior Indebtedness of the Company. "Senior Indebtedness" defined in the
Indenture 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 and including any loans made
to the Company as a debtor in possession in any bankruptcy proceeding by any
persons who were holders of any Senior Indebtedness on the date of such
bankruptcy proceeding was commenced) on, and all reasonable fees, reimbursement
and indemnity obligations, and all other obligations arising in connection with,
any indebtedness for borrowed money of the Company, contingent or otherwise, now
outstanding or created, incurred, issued, assumed or guaranteed in the future,
arising under the Credit Agreement or, in the case of any other indebtedness, if
the instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such indebtedness shall not be subordinate
in right of payment to any other indebtedness of the Company, including, without
limitation, all "Obligations" (as such term is defined in the Credit Agreement)
under the Credit Agreement. Notwithstanding the foregoing, Senior Indebtedness
shall include only such Obligations (as defined in the Credit Agreement) until
such time as the same are indefeasibly paid in full in cash and all obligations
to provide financial accommodations under the Credit Agreement have terminated.
15. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or an Affiliate of the Company, and may otherwise deal with the
Company or an Affiliate of the Company, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect or by reason
of, such obligations or their creation. The holder of this Note by accepting
this Note waives and releases all such liability. The waiver and release are
part of the consideration for the issue of this Note.
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18. AUTHENTICATION.
This Note shall not be valid until the Trustee or an
authenticating agent signs the certificate of authentication on the other side
of this Note.
19. ABBREVIATIONS AND DEFINITIONS.
Customary abbreviations may be used in the name of a Holder or
an assignee, such as: TEN COM ( = tenants in common), TEN ENT ( = tenants by
the entireties), JT TEN ( = joint tenants with right of survivorship and not as
tenants in common), CUST ( = Custodian) and U/G/M/A ( = Uniform Gifts to Minors
Act).
All capitalized terms used in this Note and not specifically
defined herein are defined in the Indenture and are used herein as so defined.
20. INDENTURE TO CONTROL.
In the case of any conflict between the provisions of this
Note and the Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request
and without charge, a copy of the Indenture. Requests may be made to: Aurora
Electronics, Inc. 9477 Waples Street, Suite 150, San Diego, California 92121
Attention: Secretary.
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EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and all references to our Firm) included in or made a part of this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
---------------------------
Arthur Andersen LLP
Orange County, California
May 8, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
The Cerplex Group, Inc.:
Our report dated February 23, 1998, contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations, has net
stockholders' and working capital deficiencies as well as insufficient funds to
pay its secured and unsecured debt obligations which raise substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements and financial statement schedules do not include any adjustments
that might result from the outcome of this uncertainty.
We consent to the use of our reports included herein and to the reference
to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Orange County, California
May 6, 1998
