SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 4, 1996
(Date of earliest event reported)
ANACOMP, INC.
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(Exact name of registrant as specified in its charter)
Indiana 0-7641 35-1144230
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(State or Other Juris- (Commission (I.R.S. Employer
diction of Incorporation) File Number) Identification No.)
11550 North Meridian Street, P.O. Box 40888 46240
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (317) 844-9666
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This Document contains exactly 9 pages.
The Exhibit Index begins on page 8.
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
As described in the the Form 8-K filed by Anacomp, Inc. (the
"Company") on June 3, 1996, on May 20, 1996, the United States Bankruptcy Court
for the District of Delaware entered an order confirming the Third Amended Joint
Plan of Reorganization (the "Plan") of the Company and certain of its
subsidiaries.
On June 4, 1996 (the "Closing Date"), the Company consummated
the Plan. On the Closing Date, the Company cancelled its shares of Old Common
Stock, Common Stock Purchase Rights, 15% Senior Subordinated Notes, 13.875%
Convertible Subordinated Debentures and Old Warrants which were registered
pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as well as the Company's other securities, including its
Old Preferred Stock and 9% Convertible Subordinated Debentures. Simultaneously,
the Company issued shares of new common stock, par value $.01 per share ("New
Common Stock"), and warrants to purchase common stock at a price of $12.23 per
share for a period of five years from the Closing Date ("New Warrants"), as
follows:
(a) New Common Stock
(i) 9,250,000 shares of New Common Stock were issued to
holders of Class 5 claims (the holders of the Company's 15% Senior
Subordinated Notes); and
(ii) 750,000 shares of New Common Stock were issued to holders
of Class 6 claims (the holders of the Company's 9% Convertible
Subordinated Debentures and 13.875% Convertible Subordinated
Debentures).
(b) New Warrants
(i) warrants convertible into 259,068 shares of New Common
Stock were issued to holders of Class 6 claims (the holders of the
Company's 9% Convertible Subordinated Debentures and 13.875%
Convertible Subordinated Debentures);
(ii) warrants convertible into 62,176 shares of New Common
Stock were issued to holders of Class 8 claims (the holders of the
Company's Old Preferred Stock); and
(iii) warrants convertible into 41,450 shares of New Common
Stock were issued to holders of Class 9 claims (the holders of the Old
Common Stock).
Pursuant to the Plan, a new Board of Directors was appointed
effective as of the Closing Date.
The Company on May 15, 1996 filed a registration statement on
Form 8-A to register the New Common Stock and New Warrants under the Exchange
Act, which registation statement was declared effective on June 3, 1996.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On the Closing Date, the Company distributed to its creditors
pursuant to the Plan, the equity securities described in Item 1 above,
approximately $21,990,615 in cash, $112,190,000 principal amount of 11 5/8%
Senior Secured Notes due 1999 and $160,000,000 principal amount of 13% Senior
Subordinated Notes due 2002.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) Exhibits
Item 601(a) of
Regulation S-K
Exhibit No. Exhibit No. Description
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2.1 2 Third Amended Joint Plan of Reorganization of
Anacomp, Inc. (the "Company") and certain of
its subsidiaries. (1)
3.1 3 Amended and Restated Articles of
Incorporation of the Company.
3.2 3 Amended and Restated By-laws of the Company.
4.1 4 Form of Common Stock Certificate.
4.2 4 Indenture, dated as of June 4, 1996, between
the Company and The Bank of New York, as
trustee (the "Senior Secured Trustee"),
relating to the Company's 11-5/8% Senior
Secured Notes due 1999.
4.3 4 Form of 11-5/8% Senior Secured Note (included
as part of Exhibit 4.2 hereto).
4.4 4 Application by the Company for Exemption from
Section 314(d) of the Trust Indenture Act of
1939, as amended, pursuant to Section 304(d)
and Rule 4d-7 thereunder.
4.5 4 Indenture, dated as of June 4, 1996, between the
Company and IBJ Schroder Bank & Trust Company,
as trustee, relating to the Company's 13% Senior
Subordinated Notes due 2002.
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(1) Incorporated by reference to Exhibit 2(e) to the Company's Form 8-A, filed
with the Securities and Exchange Commission on May 15, 1996 (File No.0-7641).
<PAGE>
4.6 4 Form of 13% Senior Subordinated Note
(included as part of Exhibit 4.5 hereto).
4.7 4 Warrant Agreement, dated as of June 4, 1996,
between the Company and Chase Mellon
Shareholder Services, L.L.C.
4.8 4 Form of Warrant Certificate.
4.9 4 Security and Pledge Agreement, dated as of
June 4, 1996, by the Company, in favor of the
Senior Secured Trustee.
4.10 4 First Leasehold Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing,
dated June 4, 1996, made by Anacomp, Inc., as
grantor, in favor of Chicago Title Insurance
Company, as trustee, for the benefit of The
Bank of New York, as beneficiary.
4.11 4 First Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing, dated
June 4, 1996, made by Anacomp, Inc., as
grantor, in favor of Chicago Title Insurance
Company, as trustee, for the benefit of The
Bank of New York, as beneficiary.
10.1 10 Common Stock Registration Rights Agreement,
dated as of June 4, 1996, by and among the
Company and Holders of Registerable Shares.
10.2 10 Senior Secured Note Registration Rights
Agreement, dated as of June 4, 1996, by and
among the Company and Holders of Registerable
Notes.
<PAGE>
10.3 10 Senior Subordinated Note Registration Rights
Agreement, dated as of June 4, 1996, by and
among the Company and Holders of Registerable
Notes.
12.1 21 Subsidiaries of the Registrant.
99.1 99 Press release of the Company, dated June 4,
1996.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf of the Registrant
by the undersigned thereunto duly authorized.
ANACOMP, INC.
By: /s/ Donald L. Viles
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Name: Donald L. Viles
Title: Executive Vice President
and Chief Financial Officer
Date: June 18, 1996
<PAGE>
EXHIBIT INDEX
Item 601(a) of
Regulation S-K
Exhibit No. Exhibit No. Description
3.1 3 Amended and Restated Articles of Incorporation of
the Company.
3.2 3 Amended and Restated By-laws of the Company.
4.1 4 Form of Common Stock Certificate.
4.2 4 Indenture, dated as of June 4, 1996, between the
Company and The Bank of New York, as trustee (the
"Senior Secured Trustee"), relating to the
Company's 11-5/8% Senior Secured Notes due 1999.
4.3 4 Form of 11-5/8% Senior Secured Note (included as
part of Exhibit 4.2 hereto).
4.4 4 Application by the Company for Exemption from
Section 314(d) of the Trust Indenture Act of
1739, as amended, pursuant to Section 304(d) and
Rule 4d-7 thereunder.
4.5 4 Indenture, dated as of June 4, 1996, between the
Company and IBJ Schroder Bank & Trust Company, as
trustee, relating to the Company's 13% Senior
Subordinated Notes due 2002.
4.6 4 Form of 13% Senior Subordinated Note (included as
part of Exhibit 4.5 hereto).
4.7 4 Warrant Agreement, dated as of June 4, 1996,
between the Company and Chase Mellon Shareholder
Services, L.L.C.
4.8 4 Form of Warrant Certificate.
4.9 4 Security and Pledge Agreement, dated as of June
4, 1996, by the Company, in favor of the Senior
Secured Trustee.
4.10 4 First Leasehold Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing,
dated June 4, 1996, made by Anacomp, Inc., as
grantor, in favor of Chicago Title Insurance
Company, as trustee, for the benefit of The Bank
of New York, as beneficiary.
4.11 4 First Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing, dated June
4, 1996, made by Anacomp, Inc., as grantor, in
favor of Chicago Title Insurance Company, as
trustee, for the benefit of The Bank of New York,
as beneficiary.
10.1 10 Common Stock Registration Rights Agreement, dated
as of June 4, 1996, by and among the Company and
Holders of Registerable Shares.
10.2 10 Senior Secured Note Registration Rights
Agreement, dated as of June 4, 1996, by and among
the Company and Holders of Registerable Notes.
10.3 10 Senior Subordinated Note Registration Rights
Agreement, dated as of June 4, 1996, by and among
the Company and Holders of Registerable Notes.
12.1 21 Subsidiaries of the Registrant.
99.1 99 Press release of the Company dated June 4, 1996.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ANACOMP, INC.
ARTICLE I
NAME
----
The name of the Corporation is Anacomp, Inc.
ARTICLE II
PURPOSES AND POWERS
-------------------
Section 1. Purposes of the Corporation. The purposes for which the
Corporation is formed are to transact any or all lawful business permitted by
applicable law and for which corporations may now or hereafter be incorporated
under the Corporation Law.
Section 2. Powers of the Corporation. The Corporation shall have (a) all
powers now or hereafter authorized by or vested in corporations pursuant to the
provisions of the Corporation Law, (b) all powers now or hereafter vested in
corporations by common law or any other statute or act, and (c) all powers
authorized by or vested in the Corporation by the provisions of these Restated
Articles of Incorporation or by the provisions of its Bylaws as from time to
time in effect.
ARTICLE III
TERM OF EXISTENCE
-----------------
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
REGISTERED OFFICE AND AGENT
---------------------------
The street address of the Corporation's registered office at the time of
adoption of these Amended and Restated Articles of Incorporation is 11550 North
Meridian Street, Carmel, Indiana 46032, and the name of its registered agent at
such office at the time of adoption of these Amended and Restated Articles of
Incorporation is William C. Ater.
<PAGE>
ARTICLE V
SHARES
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The total number of shares that the Corporation has authority to issue
shall be 21,000,000 shares consisting of 20,000,000 common shares (the "Common
Shares"), and 1,000,000 preferred shares (the "Preferred Shares"). The
Corporation's shares shall have a par value of one cent per share. The
Corporation shall have the power to issue fractional shares or scrip in the
manner and to the extent now or hereafter permitted by the laws of the State of
Indiana.
ARTICLE VI
TERMS OF SHARES
---------------
Section 1. General Terms of All Shares. The Corporation shall have the
power to acquire (by purchase, redemption, or otherwise), hold, own, pledge,
sell, transfer, assign, reissue, cancel or otherwise dispose of the shares of
the Corporation in the manner and to the extent now or hereafter permitted by
the laws of the State of Indiana, including the power to purchase, redeem, or
otherwise acquire the Corporation's own shares, directly or indirectly and
without pro rata treatment of the owners of holders of any class or series of
shares, unless, after giving effect thereto, the Corporation would not be able
to pay its debts as they become due in the usual course of business or the
Corporation's total assets would be less than its total liabilities and without
regard to any amounts that would be needed, if the Corporation were to be
dissolved at the time of the purchase, redemption, or other acquisition, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those of the holders of the shares of the
Corporation being purchased, redeemed, or otherwise acquired, unless otherwise
expressly provided with respect to a series of Preferred Shares in the
provisions of these Amended and Restated Articles of Incorporation adopted by
the Board of Directors pursuant to Section 3(a) of Article VI hereof describing
the terms of such series. Shares of the Corporation purchased, redeemed, or
otherwise acquired by it shall constitute authorized and issued but not
outstanding shares, unless the Board of Directors shall at any time adopt a
resolution providing that such shares constitute authorized but issued shares.
The Board of Directors of the Corporation may dispose of, issue, and sell
shares in accordance with, and in such amounts as may be permitted by, the laws
of the State of Indiana and the provisions of these Amended and Restated
Articles of Incorporation and for such consideration, at such price or prices,
at such time or times and upon such terms and conditions (including the
privilege of selectively repurchasing the same) as the Board of Directors of the
Corporation shall determine to be adequate, without the authorization or
approval by any shareholders of the Corporation. When disposed of, issued or
sold, such shares will be fully paid and non-assessable. Shares may be disposed
of, issued, and sold to such persons, firms, or corporations as the Board of
Directors may determine, without any preemptive or other right on the part of
the owners or holders of other shares of the Corporation of any class or kind to
acquire such shares by reason of their ownership of such other shares.
<PAGE>
The Corporation shall have the power to declare and pay dividends or other
distributions upon the issued and outstanding shares of the Corporation, subject
to the limitation that a dividend or other distribution may not be made if,
after giving it effect, the Corporation would not be able to pay its debts as
they become due in the usual course of business or the Corporation's total
assets would be less than its total liabilities and without regard to any
amounts that would be needed, if the Corporation were to be dissolved at the
time of the dividend or other distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
of the holders of shares receiving the dividend or other distribution, unless
otherwise expressly provided with respect to a series of Preferred Shares in the
provisions of these Amended and Restated Articles of Incorporation adopted by
the Board of Directors pursuant to Section 3(a) of this Article VI describing
the terms of such series. The Board of Directors may base a determination that a
distribution is not prohibited either on financial statements prepared on the
basis of accounting practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is reasonable in the
circumstances. The Corporation shall have the power to issue shares of one class
or series as a share dividend or other distribution in respect of that class or
series or one or more other classes or series without the approval of the
holders of either of those classes or series, except as may be otherwise
provided with respect to a series of Preferred Shares in the provisions of these
Amended and Restated Articles of Incorporation adopted by the Board of Directors
pursuant to Section 3(a) of this Article VI describing the terms of such series.
Section 2. Terms of Common Shares. The Common Shares shall be equal in
every respect insofar as their relationship to the Corporation is concerned, but
such equality of rights shall not imply equality of treatment as to redemption
or other acquisition of shares by the Corporation. Subject to the rights of the
holders of any issued and outstanding Preferred Shares under this Article VI,
the holders of Common Shares shall be entitled to share ratably in such
dividends or other distributions (other than purchases, redemptions, or other
acquisitions of Common Shares of the Corporation), if any, as are declared and
paid from time to time on the Common Shares at the discretion of the Board of
Directors. In the event of any liquidation, dissolution, or winding up of the
Corporation, either voluntary or involuntary, after payment shall have been made
to the holders of the Preferred Shares of the full amount to which they shall be
entitled under this Article VI, the holders of Common Shares shall be entitled,
to the exclusion of the holders of the Preferred Shares of any and all series,
to share, ratably according to the number of shares of Common Shares held by
them, in all remaining assets of the Corporation available for distribution to
its shareholders.
<PAGE>
Section 3. Terms of Preferred Shares.
(a) Preferred Shares may be issued from time to time in one or more series,
each such series to have such distinguishing designation and such preferences,
limitations, and relative voting and other rights as shall be set forth in these
Amended and Restated Articles of Incorporation. Subject to the requirements of
the Corporation Law and subject to all other provisions of these Amended and
Restated Articles of Incorporation, the Board of Directors of the Corporation
may create one or more series of Preferred Shares and shall determine the
preferences, limitations, and relative voting and other rights of one or more
series of Preferred Shares before the issuance of any shares of that series by
the adoption of an amendment to these Amended and Restated Articles of
Incorporation that specifies the terms of that series of Preferred Shares. All
shares of a series of Preferred Shares must have preferences, limitations and
relative voting and other rights identical to those of other shares of the same
series. No series of Preferred Shares need have preferences, limitations or
relative voting or other rights identical with those of any other series of
Preferred Shares.
Before issuing any shares of a series of Preferred Shares, the Board of
Directors shall adopt an amendment to these Amended and Restated Articles of
Incorporation, which shall be effective without any shareholder approval or
other action, that fixes and sets forth the distinguishing designation of such
series; the number of shares that shall constitute such series, which number may
be increased or decreased (but not below the number of shares thereof then
outstanding) from time to time by action of the Board of Directors; and the
preferences, limitations, and relative voting and other rights of the series.
Authority is hereby expressly vested in the Board of Directors, by such
amendment, to fix all of the preferences or rights, and any qualifications,
limitations, or restrictions of such preferences or rights, of such series to
the full extent permitted by the Corporation Law; provided, however, that no
such preferences, rights, qualifications, limitations, or restrictions shall be
in conflict with these Amended and Restated Articles of Incorporation or any
amendment thereof.
(b) Preferred Shares of any series that have been redeemed (whether through
the operation of a sinking fund or otherwise) or purchased by the Corporation,
or that, if convertible, have been converted into shares of the Corporation of
any other class or series, may be reissued as a part of such series or of any
other series of Preferred Shares, subject to such limitations (if any) as may be
fixed by the Board of Directors with respect to such series of Preferred Shares
in accordance with Section 3(a) of this Article VI.
ARTICLE VII
VOTING RIGHTS
-------------
Section 1. Common Shares. Except as otherwise provided by the Corporation
Law and subject to such shareholder disclosure and recognition procedures (which
may include sanctions for noncompliance therewith to the fullest extent
permitted by the Corporation Law) as the Corporation may by action of the Board
of Directors establish, the Common Shares have unlimited voting rights. At every
meeting of the shareholders of the Corporation every holder of Common Shares
shall be entitled to one (1) vote in person or by proxy for each Common Share
standing in such holder's name on the stock transfer records of the Corporation.
<PAGE>
Section 2. Preferred Shares. Except as required by the Corporation Law or
by the provisions of these Amended and Restated Articles of Incorporation
adopted by the Board of Directors pursuant to Section 3(a) of Article VI hereof
describing the terms of Preferred Shares or a series thereof, the holders of
Preferred Shares shall have no voting rights or powers. Preferred Shares shall,
when validity issued by the Corporation, entitle the record holder thereof to
vote as and on such matters, but only as and on such matters as the holders
thereof are entitled to vote under the Corporation Law or under the provisions
of these Amended and Restated Articles of Incorporation adopted by the Board of
Directors pursuant to Section 3(a) of Article VI hereof describing the terms of
Preferred Shares or a series thereof (which provisions may provide for special,
conditional, limited, or unlimited voting rights, including multiple or
fractional votes per share, or for no right to vote, except to the extent
required by the Corporation Law) and subject to such shareholder disclosure and
recognition procedures (which may include sanctions for noncompliance therewith
to the fullest extent permitted by the Corporation Law) as the Corporation may
by action of the Board of Directors establish.
Section 3. Non-voting Equity Securities. Notwithstanding anything to the
contrary set forth in this Article VII, the Corporation shall not issue any
non-voting equity securities; provided, however, that this provision, included
in these Amended and Restated Articles of Incorporation in compliance with
Section 1123(a)(6) of the United States Bankruptcy Code of 1978, as amended (the
"Bankruptcy Code"), shall have no force and effect beyond that required by
Section 1123(a)(6) of the Bankruptcy Code and shall be effective only for so
long as Section 1123(a)(6) of the Bankruptcy Code is in effect and applicable to
the Corporation.
ARTICLE VIII
DIRECTORS
---------
Section 1. Number. The Board of Directors at the time of adoption of these
Amended and Restated Articles of Incorporation is composed of seven (7) members.
The number of Directors shall be fixed by, or fixed in accordance with, the
Bylaws. The Bylaws may also provide for staggering the terms of the members of
the Board of Directors by dividing the total number of Directors into two (2) or
three (3) groups (with each group containing one-half (1/2) or one third (1/3)
of the total, as near as may be) whose terms of office expire at different
times.
Section 2. Election of Directors by Holders of Preferred Shares. The
holders of one (1) or more series of Preferred Shares may be entitled to elect
all or a specified number of Directors, but only to the extent and subject to
limitations as may be set forth in the provisions of these Amended and Restated
Articles of Incorporation adopted by the Board of Directors pursuant to Section
3(a) of Article VI hereof describing the terms of the series of Preferred
Shares.
<PAGE>
Section 3. Vacancies. Vacancies occurring in the Board of Directors shall
be filled in the manner provided in the Bylaws or, if the Bylaws do not provide
for the filling of vacancies, in the manner provided by the Corporation Law.
Section 4. Removal of Directors. Any or all of the members of the Board of
Directors may be removed, for good cause, at a meeting of the shareholders
called expressly for that purpose, by the affirmative vote of the holders of a
majority of the outstanding shares then entitled to vote at an election of
Directors. However, a Director elected by the holders of a series of Preferred
Shares as authorized by Section 2 of Article VIII may be removed only by the
affirmative vote of the holders of a majority of the outstanding shares of that
series then entitled to vote at an election of Directors. Directors may not be
removed in the absence of good cause or by the Board of Directors.
Section 5. Liability of Directors. A Director's responsibility to the
Corporation shall be limited to discharging his duties as a Director, including
his duties as a member of any committee of the Board of Directors upon which he
may serve, in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner the
Director reasonably believes to be in the best interests of the Corporation, all
based on the facts then known to the Director.
In discharging his duties, a Director is entitled to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, if prepared or presented by:
(a) One (1) or more officers or employees of the Corporation whom the
Director reasonably believes to be reliable and competent in the
matters presented;
(b) Legal counsel, public accountants, or other persons as to the matters
the Director reasonably believes are within such person's professional
or expert competence; or
(c) A committee of the Board of which the Director is not a member if the
Director reasonably believes the Committee merits confidence;
but a Director is not acting in good faith if the Director has knowledge
concerning the matter in question that makes reliance otherwise permitted by
this Section 5 unwarranted. A Director may, in considering the best interests of
the Corporation, consider the effects of any action on shareholders, employees,
suppliers, and customers of the Corporation, and communities in which offices or
other facilities of the Corporation are located, and any other factors the
Director considers pertinent.
Directors shall be immune from personal liability for any action taken as a
Director, or any failure to take any action, to the fullest extent permitted by
the applicable provisions of the Corporation Law from time to time in effect and
by general principles of corporate law.
<PAGE>
Section 6. Nonmonetary Factors in Acquisition Proposals. In connection with
the exercise of its judgment in determining what is in the best interests of the
Corporation and its stockholders when evaluating a proposal by another person or
persons to acquire some material part or all of the business or properties of
the Corporation (whether by merger, consolidation, purchase of assets, stock
reclassification, or recapitalization, spin-off, liquidation, or otherwise) or
to acquire some material part or all of the stock of the Corporation (whether by
a tender or exchange offer or some other means), the Board of Directors of the
Corporation may, in addition to considering the adequacy of the consideration to
be paid in connection with any such transaction, consider all of the following
factors and any other factors that it deems relevant: (a) the social and
economic effects of the transaction on the Corporation and its subsidiaries and
their employees, customers, and creditors and the communities in which the
Corporation and its subsidiaries operate or are located; (b) the business and
financial condition and earnings prospects of the acquiring person or persons,
including, but not limited to, debt service and other existing or likely
financial obligations of the acquiring person or persons and their affiliates
and associates, and the possible effect of such conditions upon the Corporation
and its subsidiaries and the communities in which the Corporation and its
subsidiaries operate or are located; and (c) the competence, experience, and
integrity of the acquiring person or persons and its or their management and
affiliates and associates.
ARTICLE IX
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
-------------------------------------
Section 1. Bylaws. The Board of Directors shall have the exclusive power to
make, alter, amend, or repeal, or to waive provisions of, the Bylaws of the
Corporation by the affirmative vote of a majority of the number of Directors
then in office at the time, except as provided by the Corporation Law. All
provisions for the regulation of the business and management of the affairs of
the Corporation not stated in these Amended and Restated Articles of
Incorporation shall be stated in the Bylaws. The Board of Directors may also
adopt Emergency Bylaws of the Corporation and shall have the exclusive power
(except as may otherwise be provided therein) to make, alter, amend, or repeal,
or to waive provisions of, the Emergency Bylaws by the affirmative vote of a
majority of the entire number of Directors at the time.
Section 2. Indemnification of Officers, Directors, and Other Eligible
Persons.
(a) To the extent not inconsistent with applicable law, every Eligible
Person shall be indemnified by the Corporation against all Liability and
reasonable Expense that may be incurred by him in connection with or resulting
from any Claim:
<PAGE>
(i) if such Eligible Person is Wholly Successful with respect to the
Claim, or
(ii) if not Wholly Successful, then if such Eligible Person is
determined, as provided in either Section 2(f) or (2(g), to have
acted in good faith, in what he reasonably believed to be in the
best interests of the Corporation or at least not opposed to its
best interests and, in addition, with respect to any criminal
Claim is determined to have had reasonable cause to believe that
his conduct was lawful or had no reasonable cause to believe that
his conduct was unlawful.
The termination of any Claim, by judgment, order, settlement (whether with or
without court approval), or conviction or upon a plea of guilty or of nolo
contendere, or its equivalent, shall not create a presumption that an Eligible
Person did not meet the standards of conduct set forth in clause (ii) of this
subsection (a). The actions of an Eligible Person with respect to an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974
shall be deemed to have been taken in what the Eligible Person reasonably
believed to be the best interests of the Corporation or at least not opposed to
its best interests if the Eligible Person reasonably believed he was acting in
conformity with the requirements of such Act or he reasonably believed his
actions to be in the interests of the participants in or beneficiaries of the
plan.
(b) The term "Claim" as used in this Section 2 shall include every pending,
threatened, or completed claim, action, suit, or proceeding and all appeals
thereof (whether brought by or in the right of this Corporation or any other
corporation or otherwise), civil, criminal, administrative, or investigative,
formal or informal, in which an Eligible Person may become involved, as a party
or otherwise: (i) by reason of his being or having been an Eligible Person, or
(ii) by reason of any action taken or not taken by him in his capacity as an
Eligible Person, whether or not he continued in such capacity at the time such
Liability or Expense shall have been incurred.
(c) The term "Eligible Person" as used in this Section 2 shall mean every
person (and the estate, heirs, and personal representative of such person) who
is or was a Director, officer, employee, or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee,
agent, or fiduciary of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan, or other organization or entity,
whether for profit or not. An Eligible Person shall also be considered to have
been serving an employee benefit plan at the request of the Corporation if his
duties to the Corporation also imposed duties on, or otherwise involved services
by, him to the plan or to participants in or beneficiaries of the plan.
(d) The terms "Liability" and "Expense" as used in this Section 2 shall
include, but shall not be limited to, counsel fees and disbursements and amounts
of judgments, fines, or penalties against (including excise taxes assessed with
respect to an employee benefit plan), and amounts paid in settlement by or on
behalf of, an Eligible Person.
<PAGE>
(e) The term "Wholly Successful" as used in this Section 2 shall mean (i)
termination of any Claim against the Eligible Person in question without any
finding of liability or guilt against him, (ii) approval by a court, with
knowledge of the indemnity herein provided, of a settlement of any Claim, or
(iii) the expiration of a reasonable period of time after making or threatened
making of any Claim without the institution of the same, without any payment or
promise made to induce a settlement.
(f) Every Eligible Person claiming indemnification hereunder (other than
one who has been Wholly Successful with respect to any Claim) shall be entitled
to indemnification (i) if special independent legal counsel, which may be
regular counsel of the Corporation or other disinterested person or persons (who
may be members of the Board of Directors), in either case selected by the Board
of Directors, whether or not a disinterested quorum exists (such counsel or
person or persons being hereinafter called the "Referee"), shall deliver to the
Corporation a written finding that such Eligible Person has met the standards of
conduct set forth in clause (ii) of Section 2(a), and (ii) if the Board of
Directors, acting upon such written finding, so determines. The Board of
Directors shall, if an Eligible Person is found to be entitled to
indemnification pursuant to the preceding sentence, also determine the
reasonableness of the Eligible Person's Expenses. The Eligible Person claiming
indemnification shall, if requested, appear before the Referee, answer questions
that the Referee deems relevant, and shall be given ample opportunity to present
to the Referee evidence upon which he relies for indemnification. The
Corporation shall, at the request of the Referee, make available facts,
opinions, or other evidence in any way relevant to the Referee's finding that
are within the possession or control of the Corporation.
(g) If an Eligible Person claiming indemnification pursuant to Section 2(f)
is found not to be entitled thereto, or if the Board of Directors fails to
select a Referee under Section 2(f) within a reasonable amount of time following
a written request of an Eligible Person for the selection of a Referee, or if
the Referee or the Board of Directors fails to make a determination under
Section 2(f) within a reasonable amount of time following the selection of a
Referee, the Eligible Person may apply for indemnification with respect to a
Claim to a court of competent jurisdiction, including a court in which the Claim
is pending against the Eligible Person. On receipt of an application, the court,
after giving notice to the Corporation and giving the Corporation ample
opportunity to present to the court any information or evidence relating to the
claim for indemnification that the Corporation deems appropriate, may order
indemnification if it determines that the Eligible Person is entitled to
indemnification with respect to the Claim because such Eligible Person met the
standards of conduct set forth in clause (ii) of Section 2(a). If the court
determines that the Eligible Person is entitled to indemnification, the court
shall also determine the reasonableness of the Eligible Person's Expenses.
(h) The right of indemnification provided in this Section 2 shall be in
addition to any rights to which any Eligible Person may otherwise be entitled.
Irrespective of the provisions of this Section 2, the Board of Directors may, at
any time and from time to time, (i) approve indemnification of any Eligible
Person to the full extent permitted by the provision of applicable law at the
time in effect, whether on account of past or future transactions, and (ii)
authorize the Corporation to purchase and maintain insurance on behalf of any
Eligible Person against any Liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability.
<PAGE>
(i) Expenses incurred by an Eligible Person with respect to any Claim may
be advanced by the Corporation (by action of the Board of Directors, whether or
not a disinterested quorum exists) prior to the final disposition thereof upon
receipt of any undertaking by or on behalf of the recipient to repay such amount
unless he is determined to be entitled to indemnification.
(j) The provisions of this Section 2 shall be deemed to be a contract
between the Corporation and each Eligible Person, and an Eligible Person's
rights hereunder shall not be diminished or otherwise adversely affected by any
repeal, amendment, or modification of this Section 2 that occurs subsequent to
such person becoming an Eligible Person.
(k) The provisions of this Section 2 shall be applicable to Claims made or
commenced after the adoption hereof, whether arising from acts or omissions to
act occurring before or after the adoption hereof.
Section 3. Amendment or Repeal. Except as otherwise expressly provided for
in these Amended and Restated Articles of Incorporation, the Corporation shall
be deemed, for all purposes, to have reserved the right to amend, alter, change
or repeal any provision contained in these Amended and Restated Articles of
Incorporation to the extent and in the manner now or hereafter permitted or
prescribed by statute, and all rights herein conferred upon shareholders are
granted subject to such reservation.
AMENDED AND RESTATED
BYLAWS
OF
ANACOMP, INC.
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1.1 Annual Meetings. Annual meetings of the shareholders of the
Corporation shall be held at such hour and at such place within or without the
State of Indiana as shall be designated by the Board of Directors.
Section 1.2 Special Meetings. Special meetings of the shareholders of the
Corporation may be called at any time by the Board of Directors or the Chairman
of the Board. In calling such a special meeting of shareholders, the Board of
Directors or the Chairman of the Board, as the case may be, calling a special
meeting of shareholders shall set the date, time, and place of such meeting,
which may be held within or without the State of Indiana.
Section 1.3 Notices. A written notice, stating the date, time, and place of
any meeting of the shareholders, and in the case of a special meeting containing
a description of the purpose or purposes for which such meeting is called, shall
be delivered or mailed by the Secretary of the Corporation, to each shareholder
of record of the Corporation entitled to notice of or to vote at such meeting no
fewer than ten (10) nor more than sixty (60) days before the date of the
meeting, or as otherwise provided by the Indiana Business Corporation Law
("Corporation Law"). Notice of shareholders' meetings, if mailed, shall be
mailed, postage prepaid, to each shareholder at his address shown in the
Corporation's current record of shareholders. Only business within the purpose
or purposes described in the meeting notice may be conducted at a special
meeting of shareholders.
A shareholder or his proxy may at any time waive notice of any meeting of
shareholders if the waiver is in writing and is delivered to the Corporation for
inclusion in the minutes or filing with the Corporation's records. A
shareholder's attendance at a meeting, whether in person or by proxy, (a) waives
objection to lack of notice or defective notice of the meeting, unless the
shareholder or his proxy at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting, and (b) waives objection to
consideration of a particular matter at the meeting that is not within the
purpose or purposes described in the meeting notice, unless the shareholder or
his proxy objects to considering the matter when it is presented. Each
shareholder who has in the manner above provided waived notice or objection to
notice of the shareholders' meeting shall be conclusively presumed to have been
given due notice of such meeting, including the purpose or purposes thereof.
<PAGE>
If an annual or special shareholders' meeting is adjourned to a different
date, time or place, notice need not be given of the new date, time, or place if
the new date, time or place is announced at the meeting before adjournment,
unless a new record date is or must be established for the adjourned meeting.
The Board of Directors must fix a new record date if the meeting is adjourned to
a date more than one hundred twenty (120) days after the date fixed for the
original meeting.
Section 1.4. Voting. Except as otherwise provided by the Corporation Law or
the Corporation's Articles of Incorporation, each share of the capital stock of
any class of the Corporation that is outstanding at the record date and
represented in person or by proxy at the annual or special meeting shall entitle
the record holder thereof, or his proxy, to one (1) vote on each matter voted on
at the meeting.
Section 1.5. Quorum. Unless the Corporation's Articles of Incorporation or
the Corporation Law provide otherwise, at all meetings of shareholders a
majority of the votes entitled to be cast on a matter, represented in person or
by proxy, constitutes a quorum for action on the matter. Action may be taken at
a shareholders' meeting only on matters with respect to which a quorum exists;
provided, however, that any meeting of shareholders, including annual and
special meetings and any adjournments thereof, may be adjourned to a later date
although less than a quorum is present. Once a share is represented for any
purpose at a meeting, it is deemed present for quorum purposes for the remainder
of the meeting and for any meeting held pursuant to an adjournment of that
meeting unless a new record date is or must be set for that adjourned meeting.
Section 1.6. Vote Required to Take Action. If a quorum exists as to a
matter to be considered at a meeting of shareholders, action on such matter
(other than the election of Directors) is approved if the votes properly cast
favoring the action exceed the votes properly cast opposing the action, unless
the Corporation's Articles of Incorporation or the Corporation Law require a
greater number of affirmative votes. Directors shall be elected by a plurality
of the votes properly cast.
Section 1.7. Record Date. Only such persons shall be entitled to notice or
to vote, in person or by proxy, at any shareholders' meeting as shall appear as
shareholders upon the books of the Corporation as of such record date as the
Board of Directors shall determine, which date may not be earlier than the date
seventy (70) days immediately preceding the meeting unless otherwise permitted
by the Corporation Law. In the absence of such determination, the record date
shall be the fiftieth (50th) day immediately preceding the date of such meeting.
Unless otherwise provided by the Board of Directors, shareholders shall be
determined as of the close of business on the record date.
<PAGE>
Section 1.8. Proxies. A shareholder may vote his shares either in person or
by proxy. A shareholder may appoint a proxy to vote or otherwise act for the
shareholder (including authorizing the proxy to receive, or to waive, notice of
any shareholders' meetings within the effective period of such proxy) by signing
an appointment form, either personally or by the shareholder's attorney-in-fact.
An appointment of a proxy is effective when received by the Secretary or other
officer or agent authorized to tabulate votes and is effective for eleven (11)
months unless a longer period is expressly provided in the appointment form. The
proxy's authority may be limited to a particular meeting or may be general and
authorize the proxy to represent the shareholder at a meeting of shareholders
held within the time provided in the appointment form. An appointment of a proxy
is revocable by the shareholder unless the appointment form conspicuously states
that it is irrevocable and the appointment is coupled with an interest. Subject
to the Corporation Law and to any express limitation on the proxy's authority
appearing on the face of the appointment form, the Corporation is entitled to
accept the proxy's vote or other action as that of the shareholder making the
appointment.
ARTICLE II
----------
Directors
---------
Section 2.1. Number and Term. The business of the Corporation shall be
managed by a Board of Directors consisting of at least six Directors and no more
than twelve Directors. The exact number of Directors of the Corporation shall be
fixed by the Board of Directors within the range established by the preceding
sentence, and may be changed within that range from time to time by the Board of
Directors. Each Director shall be elected for a term of office to expire at the
annual meeting of shareholders next following his election. Despite the
expiration of a Director's term, the Director shall continue to serve until his
successor is elected and qualified or until the earlier of his death,
resignation, disqualification, or removal, or until there is a decrease in the
number of Directors. Any vacancy in the Board of Directors, from whatever cause
arising, including any increase in the size of the Board of Directors as fixed
by the Board of Directors, shall be filled by selection of a successor by a
majority vote of the remaining members of the Board of Directors (even if less
than a quorum); provided, however, that if such vacancy or vacancies leave the
Board of Directors with no members or if the remaining members of the Board are
unable to agree upon a successor or determine not to select a successor, such
vacancy may be filled by a vote of the shareholders at a special meeting called
for that purpose or at the next annual meeting of shareholders. The term of a
director elected or selected to fill a vacancy shall expire at the end of the
term for which such Director's predecessor was elected.
The Directors and each of them shall have no authority to bind the
Corporation except when acting as a Board or as a committee of the Board to the
extent permitted in Section 2.7 hereof.
Section. 2.2. Quorum and Vote Required to Take Action. At least one third
of the whole Board of Directors (the size of which shall be determined in
accordance with the latest action of the Board of Directors fixing the number of
Directors) shall be necessary to constitute a quorum for the transaction of any
business, except the filling of vacancies. If a quorum is present when a vote is
taken, the affirmative vote of a majority of the Directors present shall be the
act of the Board of Directors, unless the act of a greater number is required by
the Corporation Law, the Corporation's Articles of Incorporation, or these
Bylaws.
<PAGE>
Section 2.3. Annual and Regular Meetings. The Board of Directors shall meet
annually, without notice, on the same day as the annual meeting of the
shareholders, for the purpose of transacting such business as properly may come
before the meeting. Other regular meetings of the Board of Directors, in
addition to said meeting, may be held without notice of the date, time, place or
purpose of the meeting or on such dates, at such times, and at such places as
shall be fixed by resolution adopted by the Board of Directors or otherwise
communicated to the Directors. The Board of Directors may at any time alter the
date for the next regular meeting of the Board of Directors.
Section 2.4. Special Meetings. Special meetings of the Board of Directors
may be called by any member of the Board of Directors upon not less than
twenty-four (24) hours' notice given to each Director of the date, time and
place of the meeting, which notice need not specify the purpose or purposes of
the special meeting. Such notice may be communicated in person (either in
writing or orally), by telephone, telegraph, teletype or other form of wire or
wireless communication or by mail, and shall be effective at the earlier of the
time of its receipt or, if mailed, five (5) days after its mailing. Notice of
any meeting of the Board may be waived in writing at any time if the waiver is
signed by the Director entitled to the notice and is filed with the minutes or
corporate records. A Director's attendance at or participation in a meeting
waives any required notice to the Director of the meeting, unless the Director
at the beginning of the meeting (or promptly upon the Director's arrival)
objects to holding the meeting or transacting business at the meeting and does
not thereafter vote for or assent to action taken at the meeting.
Section 2.5. Written Consents. Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting if the
action is taken by all members of the Board. The action must be evidenced by one
(1) or more written consents describing the action taken, signed by each
Director, and included in the minutes or filed with the corporate records
reflecting the action taken. Action taken under this Section 2.5 is effective
when the last Director signs the consent, unless the consent specifies a
different prior or subsequent effective date, in which case the action is
effective on or as of the specified date. A consent signed under this Section
2.5 has the effect of a meeting vote and may be described as such in any
document.
Section 2.6. Participation by Conference Telephone. The Board of Directors
may permit any or all Directors to participate in a regular or special meeting
by, or through the use of, any means of communication, such as conference
telephone, by which all Directors participating may simultaneously hear each
other during the meeting. A Director participating in a meeting by such means
shall be deemed to be present in person at the meeting.
Section 2.7. Committees.
(a) The Board of Directors may create one (1) or more committees and
appoint members of the Board of Directors to serve on them, by
resolution of the Board of Directors adopted by a majority of all the
Directors in office when the resolution is adopted. Each committee may
have one (1) or more members, and all the members of a committee shall
serve at the pleasure of the Board of Directors.
<PAGE>
(b) To the extent specified by the Board of Directors in the resolutions
creating a committee, each committee may exercise all of the authority
of the Board of Directors; provided, however, that a committee may
not:
(1) authorize dividends or other distributions as defined by the
Corporation Law, except a committee may authorize or approve a
reacquisition of shares if done according to a formula or method
prescribed by the Board of Directors;
(2) approve or propose to shareholders action that is required to be
approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of its
committees;
(4) amend the Corporation's Articles of Incorporation;
(5) adopt, amend, repeal, or waive provision of these Bylaws, or
(6) approve a plan of merger not requiring shareholder approval.
(c) Except to the extent inconsistent with the resolutions creating a
committee, Section 2.1 through 2.6 of these Bylaws, which govern
meetings, action without meetings, notice and waiver of notice, quorum
and voting requirements, and telephone participation in meetings of
the Board of Directors, apply to the committee and its members as
well.
ARTICLE III
-----------
Officers
--------
Section 3.1. Designation, Selection, and Terms. The officers of the
Corporation shall consist of the Chairman of the Board and the Secretary. The
Board of Directors may also elect a President, Vice Presidents, Assistant
Secretaries, Assistant Treasurers, and such other officers or assistant officers
as it may from time to time determine by resolution creating the office and
defining the duties thereof. In addition, the Chairman of the Board may, from
time to time, create and appoint such assistant officers as he deems desirable.
The officers of the Corporation shall be elected by the Board of Directors (or
appointed by the Chairman of the Board as provided above) and need not be
selected from among the members of the Board of Directors. Any two (2) or more
offices may be held by the same person. All officers shall serve at the pleasure
of the Board of Directors and, with respect to officers appointed by the
Chairman of the Board, also at the pleasure of such officer. The election or
appointment of an officer does not itself create contract rights.
<PAGE>
Section 3.2. Removal and Vacancies. The Board of Directors may remove any
officer at any time with or without cause. An officer appointed by the Chairman
of the Board may also be removed at any time, with or without cause, by such
officer. Vacancies in such offices, however occurring, may be filled by the
Board of Directors at any meeting of the Board of Directors (or by appointment
by the Chairman of the Board, to the extent provided in Section 3.1 of these
Bylaws).
Section 3.3. Chairman of the Board. The Chairman of the Board shall be
selected from among the members of the Board of Directors and may be the chief
executive officer of the Corporation. He shall preside at all meetings of the
shareholders and the Board of Directors at which he is present and shall perform
the duties and have the powers of the President in his absence or in the event
of the inability or refusal of the President to act. In addition, he shall have
and may exercise all the powers and duties that are incident to his office, that
are delegated to him from time to time by the Board, or that are defined in
these Bylaws.
Section 3.4. Secretary. The Secretary shall be the custodian of the books,
papers, and records of the Corporation and of its corporate seal, if any, and
shall be responsible for seeing that the Corporation maintains the records
required by the Corporation Law (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report required
by the Corporation Law. The Secretary shall be responsible for preparing minutes
of the meetings of the shareholders and of the Board of Directors and for
authenticating records of the Corporation, and he shall perform all of the other
duties usual in the office of the Secretary of a corporation.
ARTICLE IV
----------
Checks
------
All checks, drafts, or other orders for payment of money shall be signed in
the name of the Corporation by such officers or persons as shall be designated
from time to time by resolution adopted by the Board of Directors and included
in the minute book of the Corporation.
ARTICLE V
---------
Loans
-----
Such of the officers of the Corporation as shall be designated from time to
time by any resolution adopted by the Board of Directors and included in the
minute book of the Corporation shall have the power, with such limitations
thereon as may be fixed by the Board of Directors, to borrow money in the
Corporation's behalf, to establish credit, to discount bills and papers, to
pledge collateral, and to execute such notices, bonds, debentures, or other
evidences of indebtedness, and such mortgage, trust indentures, and other
instruments in connection therewith, as may be authorized from time to time by
such Board of Directors.
<PAGE>
ARTICLE VI
----------
Execution of Documents
----------------------
The Chairman of the Board, the President, or any officer designated by
either of them, may, in the Corporation's name, sign all deeds, leases,
contracts, or similar documents that may be authorized by the Board of Directors
unless otherwise directed by the Board of Directors or otherwise provided herein
or in the Corporation's Articles of Incorporation, or as otherwise required by
law.
ARTICLE VII
-----------
Stock
-----
Section 7.1. Execution. Certificates for shares of the capital stock of the
Corporation shall be signed (either manually or in facsimile) by two officers
designated from time to time by the Board of Directors and the seal of the
Corporation (or a facsimile thereof), if any, may be thereto affixed. The
Corporation may issue and deliver any such certificate notwithstanding that any
such officer who shall have signed, or whose facsimile signature shall have been
imprinted on, such certificate shall have ceased to be such officer.
Section 7.2. Contents. Each certificate shall state on its face the name of
the Corporation and that it is organized under the laws of the State of Indiana,
the name of the person to whom it is issued, and the number and class and the
designation of the series, if any, of shares the certificate represents, and,
whenever the Corporation is authorized to issue more than one class of shares or
different series within a class, each certificate issued after the effectiveness
of such authorization shall further state conspicuously on its front or back
that the Corporation will furnish the shareholder, upon his written request and
without charge, a summary of the designations, relative rights, preferences, and
limitations applicable to each class and series and the authority of the Board
of Directors to determine variations in rights, preferences and limitations for
future series.
Section 7.3. Transfers. Except as otherwise provided by law or by
resolution of the Board of Directors, transfers of shares of the capital stock
of the Corporation shall be made only on the books of the Corporation by the
holder thereof in person or by duly authorized attorney, on payment of all taxes
thereon and surrender for cancellation of the certificate or certificates for
such shares (except as hereinafter provided in the case of loss, destruction, or
mutilation of certificates) properly endorsed by the holder thereof or
accompanied by the proper evidence of succession, assignment, or authority to
transfer and delivered to the Secretary or an Assistant Secretary.
Section 7.4. Stock Transfer Records. There shall be entered upon the stock
records of the Corporation the number of each certificate issued; the name and
address of the registered holder of such certificate; the number, kind, and
class or series of shares represented by such certificate; the date of issue;
whether the shares are originally issued or transferred; the registered holder
from whom transferred; and such other information as is commonly required to be
shown by such records. The stock records of the Corporation shall be kept at its
principal office, unless the Corporation appoints a transfer agent or registrar,
in which case the Corporation shall keep at its principal office a complete and
accurate shareholders' list giving the name and addresses of all shareholders
and the number and class of shares held by each. If a transfer agent is
appointed by the Corporation, shareholders shall give written notice of any
change in their addresses from time to time to the transfer agent.
<PAGE>
Section 7.5. Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars and may require
each stock certificate to bear the signature of either or both.
Section 7.6. Loss, Destruction, or Mutilation of Certificates. The holder
of any of the capital stock of the Corporation shall immediately notify the
Corporation of any loss, destruction, or mutilation of the certificate therefor,
and the Board of Directors may, in its discretion, cause to be issued to him a
new certificate or certificates of stock upon the surrender of the mutilated
certificate, or, in the case of loss or destruction, upon satisfactory proof of
such loss or destruction. The Board of Directors may, in its discretion, require
the holder of the lost or destroyed certificate or his legal representative to
give the Corporation a bond in such sum and in such form, and with such surety
or sureties as it may direct, to indemnify the Corporation, its transfer agents,
and its registrars, if any, against any claim that may be made against them or
any of them with respect to the capital stock represented by the certificate or
certificates alleged to have been lost or destroyed, but the Board of Directors
may, in its discretion, refuse to issue a new certificate or certificate, save
upon the order of a court having jurisdiction in such matters.
Section 7.7. Form of Certificates. The form of the certificate of shares of
the capital stock of the Corporation shall conform to the requirements of
Section 7.2 of these Bylaws and be in such printed form as shall from time to
time be approved by resolution of the Board of Directors.
ARTICLE VIII
------------
Seal
----
The corporate seal of the Corporation shall, if the Corporation elects to
have one, be in the form of a disc, with the name of the Corporation on the
periphery thereof and the word "SEAL" in the center. However, the use of a
corporate seal or an impression thereof is not required and does not affect the
validity of any instrument whatsoever.
ARTICLE IX
----------
Miscellaneous
-------------
Section 9.1. Corporation Law. The provision of the Corporation Law, as
amended, applicable to all matters relevant to, but not specifically covered by,
these Bylaws are hereby, by reference, incorporated in and made a part of these
Bylaws.
<PAGE>
Section 9.2. Fiscal Year. The fiscal year of the Corporation shall end on
the 30th of September of each year.
Section 9.3. Business Combination Chapter Applicable. The provisions of the
Business Combinations Chapter of the Corporation Law (Indiana Code 23-1-43) are
applicable to the Corporation. The provisions of the Control Shares Acquisition
Chapter of the Corporation Law (Indiana Code 23-1-42) are inapplicable to
"control share acquisitions" (as therein defined) of shares of the Corporation.
Section 9.4. Definition of Articles of Incorporation. The term "Articles of
Incorporation" as used in these Bylaws means the Articles of Incorporation of
the Corporation, as amended and restated from time to time.
Section 9.5. Amendments. These Bylaws may be rescinded, changed, or
amended, and provisions hereof may be waived, at any meeting of the Board of
Directors by the affirmative vote of a majority of the number of Directors then
in office at the time, except as otherwise required by the Corporation's
Articles of Incorporation or by the Corporation Law.
NUMBER SHARES
anacomp
COMMON STOCK CUSIP 032371 10 6
PAR VALUE $.01 SEE REVERSE FOR CERTAIN DEFINITIONS
ANACOMP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF INDIANA
This Certifies that
is the record holder of
FULLY PAID AND NON ASSESSABLE SHARES OF COMMON STOCK OF
ANACOMP, INC. transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate is not valid unless countersigned by the
Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
its duly authorized officers.
Dated:
/s/ Lang Lowrey, III /s/ William C. Ater
- - -------------------------- -------------------------
President and Chief Executive Officer Secretary
COUNTERSIGNED AND REGISTERED:
Chemical Mellon Shareholder Services, L.L.C.
(New York) TRANSER AGENT
AND REGISTRAR
<PAGE>
ANACOMP, INC.
A STATEMENT, IN FULL OF THE RELATIVE RIGHTS, INTERESTS, PREFERENCES AND
RESTRICTIONS OF THE CLASS OF SHARES REPRESENTED BY THIS CERTIFICATE WILL BE
FURNISHED BY THE CORPORATION TO ANY SHAREHOLDER UPON WRITTEN REQUEST AND WITHOUT
CHARGE, SUCH REQUEST MAY BE MADE TO THE SECRETARY OF THE CORPORATION.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT ----- Custodian ------
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as
tenants in common Act ----------------
(State)
Additional abbreviations may also be used though not in the above list.
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- - -----------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - -------------------------------------------------------- Shares represented
by the within Certificates, and do hereby irrevocably constitute and appoint --
- - --------------------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within-named
Corporation with full power of substitution in the premises.
Dated:--------------------
AFFIX MEDALLION SIGNATURE
GUARANTEE PRINT BELOW
----------------------------------------------------------------
----------------------------------------------------------------
ABOVE SIGNATURES TO THE ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
THE SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION SUCH AS A SECURITIES BROKER/DEALER, COMMERCIAL BANK,
TRUST COMPANY, SAVINGS ASSOCIATION OR A CREDIT UNION
PARTICIPATING IN A MEDALLION PROGRAM APPROVED BY THE SECURITIES
TRANSFER ASSOCIATION, INC.
AMERICAN BANKNOTE COMPANY PRODUCTION COORDINATOR AL DERMOVESIAN 215-830-2100
880 BLAIR MELL ROAD PROOF OF MAY 28, 1996
HORSHAM, PA 18644 ANACOMP
215-667-3450 H44278bk
SALESPERSON: P. SHEERIN 1-800-281-9198 Opr. is NEW
/home/seibert/inprogress/home11/anacomp44278 /net/banknote/home11/A
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
ANACOMP, INC.
11-5/8% Senior Secured Notes due 1999
------------------------------------
INDENTURE
Dated as of June 4, 1996
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THE BANK OF NEW YORK,
Trustee
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TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.1. Definitions............................................. 1
SECTION 1.2. Other Definitions....................................... 19
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act..................................... 20
SECTION 1.4. Rules of Construction................................... 20
ARTICLE 2
The Securities
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SECTION 2.1. Form and Dating......................................... 21
SECTION 2.2. Execution and Authentication............................ 21
SECTION 2.3. Registrar and Paying Agent.............................. 22
SECTION 2.4. Deposit of Moneys; Paying Agent To Hold
Money in Trust....................................... 22
SECTION 2.5. Securityholder Lists.................................... 22
SECTION 2.6. Transfer and Exchange................................... 23
SECTION 2.7. Book-Entry Provisions for Global Securities............. 23
SECTION 2.8. Certificated Securities................................. 24
SECTION 2.9. Replacement Securities.................................. 24
SECTION 2.10. Outstanding Securities.................................. 25
SECTION 2.11. Temporary Securities.................................... 25
SECTION 2.12. Cancellation............................................ 26
SECTION 2.13. Defaulted Interest...................................... 26
SECTION 2.14. Record Date............................................. 27
SECTION 2.15. CUSIP Numbers........................................... 27
ARTICLE 3
Redemption
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SECTION 3.1. Notice to Trustee....................................... 27
SECTION 3.2. Selection of Securities To Be Redeemed.................. 28
SECTION 3.3. Notice of Redemption.................................... 28
SECTION 3.4. Effect of Notice of Redemption.......................... 29
SECTION 3.5. Deposit of Redemption Price............................. 29
SECTION 3.6. Securities Redeemed in Part............................. 29
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ARTICLE 4
Covenants
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SECTION 4.1. Payment of Securities................................... 29
SECTION 4.2. SEC Reports............................................. 30
SECTION 4.3. Limitation on Indebtedness.............................. 30
SECTION 4.4. Limitation on Restricted Subsidiary
Indebtedness and Preferred Stock.................. 32
SECTION 4.5. Limitation on Restricted Payments....................... 33
SECTION 4.6. Limitation on Restrictions on Distributions
from Restricted Subsidiaries...................... 33
SECTION 4.7. Limitation on Sales and Assets and
Restricted Subsidiary Stock....................... 34
SECTION 4.8. Limitation on Transaction with Affiliates............... 40
SECTION 4.9. Change of Control....................................... 40
SECTION 4.10. Compliance Certificate.................................. 43
SECTION 4.11. Further Instruments and Acts............................ 44
SECTION 4.12. Limitation on Liens and Impairment of
Collateral........................................ 44
SECTION 4.13. Limitation on Issuance and Sale of Capital
Stock of Restricted Subsidiaries.................. 44
SECTION 4.14. Restricted and Unrestricted Subsidiaries................ 45
SECTION 4.15. After-Acquired Property................................. 45
SECTION 4.16. Revisions to Schedules.................................. 45
SECTION 4.17. Maintenance of Properties; Insurance.................... 45
SECTION 4.18. Corporate Existence..................................... 46
SECTION 4.19. Taxes .................................................. 46
SECTION 4.20. Conflicting Agreements.................................. 46
SECTION 4.21. Capital Expenditures.................................... 46
SECTION 4.22. Interest Coverage Ratio................................. 46
ARTICLE 5
Successor Company
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ARTICLE 6
Defaults and Remedies
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SECTION 6.1. Events of Default....................................... 48
SECTION 6.2. Acceleration............................................ 51
SECTION 6.3. Other Remedies.......................................... 51
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SECTION 6.4. Waiver of Past Defaults................................. 52
SECTION 6.5. Control by Majority..................................... 52
SECTION 6.6. Limitation on Suits..................................... 52
SECTION 6.7. Rights of Holders To Receive Payment.................... 53
SECTION 6.8. Collection Suit by Trustee.............................. 53
SECTION 6.9. Trustee May File Proofs of Claim........................ 53
SECTION 6.10. Priorities.............................................. 53
SECTION 6.11. Undertaking for Costs................................... 54
SECTION 6.12. Waiver of Stay or Extension Laws........................ 54
SECTION 6.13. Suits To Protect the Collateral......................... 54
ARTICLE 7
Trustee
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SECTION 7.1. Duties of Trustee....................................... 54
SECTION 7.2. Rights of Trustee....................................... 55
SECTION 7.3. Individual Rights of Trustee............................ 56
SECTION 7.4. Trustee's Disclaimer.................................... 56
SECTION 7.5. Notice of Defaults...................................... 57
SECTION 7.6. Reports by Trustee to Holders........................... 57
SECTION 7.7. Compensation and Indemnity.............................. 57
SECTION 7.8. Replacement of Trustee.................................. 58
SECTION 7.9. Successor Trustee by Merger............................. 59
SECTION 7.10. Eligibility; Disqualification........................... 59
SECTION 7.11. Preferential Collection of Claims Against
Company........................................... 59
SECTION 7.12. Appointment of Co-Trustee or Separate Trustee........... 59
ARTICLE 8
Discharge of Indenture
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SECTION 8.1. Discharge of Liability on Securities.................... 61
SECTION 8.2. Application of Trust Money.............................. 61
SECTION 8.3. Repayment to Company.................................... 61
SECTION 8.4. Indemnity for Government Obligations.................... 62
SECTION 8.5. Reinstatement........................................... 62
ARTICLE 9
Amendments and Waivers
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SECTION 9.1. Without Consent of Holders.............................. 62
SECTION 9.2. With Consent of Holders................................. 63
SECTION 9.3. Compliance with Trust Indenture Act..................... 64
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SECTION 9.4. Revocation and Effect of Consents and Waivers........... 64
SECTION 9.5. Notation on or Exchange of Securities................... 65
SECTION 9.6. Trustee to Sign Amendments.............................. 65
SECTION 9.7. Payment for Consent..................................... 65
ARTICLE 10
Collateral Documents
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SECTION 10.1. Collateral Documents.................................... 65
SECTION 10.2. General Authority....................................... 66
SECTION 10.3. Recording, Deposit of Pledged Securities,
etc............................................... 67
SECTION 10.4. Release of Collateral; TIA Requirements................. 68
SECTION 10.5. Disposition of Collateral Without Trustee
Consent........................................... 69
SECTION 10.6. Disposition of Inventory and Accounts
Receivable........................................ 71
SECTION 10.7. Release of Collateral with Trustee Consent.............. 72
SECTION 10.8. Substitute Collateral................................... 75
SECTION 10.9. Eminent Domain and Other Governmental Takings........... 77
SECTION 10.10. Suits to Protect the Collateral......................... 78
SECTION 10.11. Purchaser Protected..................................... 79
SECTION 10.12. Powers Exercisable by Receiver or Trustee............... 79
SECTION 10.13. Disposition of Obligations Received..................... 79
SECTION 10.14. Limitation on Duty of Trustee in Respect of
Collateral........................................ 80
SECTION 10.15. Release upon Termination of the Company's
Obligations....................................... 80
ARTICLE 11
Application of Trust Monies
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SECTION 11.1. "Trust Monies" Defined.................................. 81
SECTION 11.2. Retirement of Securities................................ 82
SECTION 11.3. Withdrawals of Insurance Proceeds and
Condemnation Awards............................... 82
SECTION 11.4. Release of Real Estate Tax Monies; Rents................ 84
SECTION 11.5. Powers Exercisable Notwithstanding Event of
Default........................................... 85
SECTION 11.6. Powers Exercisable by Trustee or Receiver............... 85
SECTION 11.7. Disposition of Securities Retired....................... 85
SECTION 11.8. Investment of Trust Monies.............................. 85
ARTICLE 12
Miscellaneous
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SECTION 12.1. Trust Indenture Act Controls............................ 86
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SECTION 12.2. Notices................................................. 86
SECTION 12.3. Communication by Holders with Other Holders............. 87
SECTION 12.4. Certificate and Opinion as to Conditions
Precedent......................................... 87
SECTION 12.5. Statements Required in Certificate or Opinion........... 88
SECTION 12.6. Rules by Trustee, Paying Agent and Registrar............ 88
SECTION 12.7. Legal Holidays.......................................... 88
SECTION 12.8. Governing Law........................................... 88
SECTION 12.9. No Recourse Against Others.............................. 88
SECTION 12.10. Successors.............................................. 88
SECTION 12.11. Multiple Originals...................................... 88
SECTION 12.12. Table of Contents; Headings............................. 88
SECTION 12.13. Severability............................................ 89
Exhibit A - Form of Security
Exhibit B - Form of Mortgage
Exhibit C - Form of Security and Pledge Agreement
Exhibit D - Form of Opinion of Counsel
Schedule I - Indebtedness to be Outstanding Immediately After the
Issue Date
Schedule II - Liens to be Outstanding Immediately After the Issue Date
Schedule III - U.S. Restricted Subsidiaries
Schedule IV - Jurisdictions for UCC Filings
Schedule V - Jurisdictions for Real Property Filings and Recordings
<PAGE>
ANACOMP, INC.
Reconciliation and tie between Trust Indenture Act of 1939 ("TIA") and Indenture
dated as of June 4, 1996.*
TIA Indenture
Section Section
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310 (a)(1) ................................ 7.10
(a)(2) ................................ 7.10
(a)(3) ................................ 7.12
(a)(4) ................................ N.A.
(a)(5) ................................ 7.10
(b) ................................ 7.8, 7.10
(c) ................................ N.A.
311 (a) ................................ 7.11
(b) ................................ 7.11
(c) ................................ N.A.
312 (a) ................................ 2.5
(b) ................................ 12.3
(c) ................................ 12.3
313 (a) ................................ 7.6
(b)(1) ................................ 4.7, 4.9, 7.7,
10.5, 10.7, 10.8
(b)(2) ................................ 7.6
(c) ................................ 12.2
(d) ................................ 7.6
314 (a) ................................ 4.2, 4.10. 12.2
(b) ................................ 10.3, 10.4
(c)(1) ................................ 12.4
(c)(2) ................................ 12.4
(c)(3) ................................ N.A.
(d) ................................ 10.6, 10.7,
10.8, 12.4
(e) ................................ 12.5
(f) ................................ 4.10
315 (a) ................................ 7.1
(b) ................................ 7.5; 12.2
(c) ................................ 7.1
(d) ................................ 7.1
(e) ................................ 6.11
316 (a)(last ................................ 12.6
sentence)
(a)(1)(A) ................................ 6.5
(a)(1)(B) ................................ 6.4
(a)(2) ................................ N.A.
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TIA Indenture
Section Section
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(b) ................................ 6.7
(c) ................................ 6.7
317 (a)(1) ................................ 6.8
(a)(2) ................................ 6.9
(b) ................................ 2.4
318 (a) ................................ 12.1
N.A. means Not Applicable.
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* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture. This reconciliation and tie shall only apply
subsequent to qualification of this Indenture under the TIA.
<PAGE>
INDENTURE dated as of June 4, 1996, between ANACOMP, INC., an Indiana
corporation (the "Company"), and THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 11-5/8% Senior Secured
Notes due 1999 (the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.1. 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.
Notwithstanding the foregoing, each Unrestricted Subsidiary shall be deemed an
Affiliate of the Company and of each other Subsidiary of the Company.
"Asset Disposition" means any direct or indirect sale, lease, transfer,
conveyance or other disposition (or series of related sales, leases, transfers,
conveyances or dispositions) of shares of Capital Stock (including, without
limitation, the Pledged Securities) of any Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any
Restricted Subsidiary (including any disposition by means of a merger,
consolidation or similar transaction), other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of the Company's or
any Restricted Subsidiary's accounts receivable, lease receivables or inventory
(other than the disposition of inventory pursuant to a Sale/Leaseback
Transaction) at Fair Market Value in the Ordinary Course of Business, (iii) a
disposition of property or assets, whether in a single transaction or a series
of related transactions which constitute a single plan of disposition, that have
an aggregate Fair Market Value not in excess of $100,000, (iv) an operating
lease entered into in the ordinary course of business with respect to property,
plant or equipment that in the judgment of the Board of Directors constitutes
excess capacity or (v) a "like-kind exchange" of an asset in exchange for an
asset of a third party, so long as, in the judgment of the Company's Board of
Directors, the asset received by the Company or such Restricted Subsidiary in
such exchange (x) has a Fair Market Value at least equal to the fair market
value of the asset transferred by the Company or such Restricted Subsidiary and
(y) is usable in a Permitted Line of Business to at least the same extent as the
asset transferred by the Company or such Restricted Subsidiary. An Asset
Disposition shall include the requisition of title to, seizure of or forfeiture
of any property or assets, or any actual or constructive total loss or an agreed
or compromised total loss of any property or assets. The term "Asset
Disposition" when used with respect to the Company shall not include any
disposition pursuant to Article 5 which constitutes a disposition of all or
substantially all the assets of the Company.
<PAGE>
"Attributable Indebtedness", in respect of a Sale/Leaseback Transaction,
means, as at the time of determination, the greater of (i) the Fair Market Value
of the property subject to such Sale/Leaseback Transaction (as determined in
good faith by the Board of Directors) or (ii) the present value (discounted at
the interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock and (b) the
amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP; the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible-into such equity.
<PAGE>
"Change of Control" means the occurrence of any of the following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or a Restricted Subsidiary, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the Company; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board then in office; or (iii) the Company, either individually or in
conjunction with one or more of its Subsidiaries, sells, conveys, leases or
otherwise transfers, or one or more of such Subsidiaries sell, convey, lease or
otherwise transfer, all or substantially all the assets of the Company and the
Restricted Subsidiaries, taken as a whole, to any Person (other than a
Restricted Subsidiary).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the property and assets subject to the Lien of the
Indenture or any of the other Collateral Documents.
"Collateral Documents" means the Indenture, the Security and Pledge
Agreement, the Mortgages and each other document, agreement or instrument
evidencing, perfecting, assuring or otherwise relating to the Lien in respect of
the Collateral and all amendments, supplements or other modifications thereto.
"Commodity Price Protection Agreement" means, in respect of a Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
<PAGE>
"Consolidated Coverage Ratio" means, as of any date of determination, the
ratio of (i) the amount of EBITDA for the period of the most recent four
consecutive fiscal quarters ending at least 45 days prior to the date of such
determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition,
EBITDA for such period shall be reduced by an amount equal to EBITDA (if
positive) directly attributable to the property or assets which are the subject
of such Asset Disposition for such period, or increased by an amount equal to
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and the continuing
Restricted Subsidiaries in connection with such Asset Dispositions for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold,
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and the
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment that would have required an adjustment
pursuant to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if such
Asset Disposition or Investment occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company
and as further contemplated by the definition of pro forma. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Protection Agreement applicable to
such Indebtedness if such Interest Rate Protection Agreement has a remaining
term in excess of 12 months).
<PAGE>
"Consolidated Interest Expense" means, for any period, the sum of (i) the
total cash and noncash interest expense of the Company and its consolidated
Subsidiaries, plus, to the extent not included in such interest expense, (A)
interest expense attributable to Capital Lease Obligations, (B) amortization of
debt discount and debt issuance cost, (C) capitalized interest, (D) accrued
interest, (E) commissions, discounts and other fees and charges paid or owed
with respect to letters of credit and bankers' acceptance financing, (F)
interest actually paid by the Company or any such Subsidiary under any Guarantee
of Indebtedness or other obligation of any other Person, (G) net costs
associated with Hedging Obligations (including amortization of discounts and
fees), (H) the interest portion of any deferred obligation, (I) Preferred Stock
dividends in respect of all Preferred Stock of Subsidiaries of the Company and
Redeemable Stock of the Company held by Persons other than the Company or a
Wholly Owned Subsidiary and (J) cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust
(provided, however, that there shall be excluded from this clause (i), (x) any
such interest expense of any Unrestricted Subsidiary to the extent the related
Indebtedness is not Guaranteed or paid by the Company or any Restricted
Subsidiary and (y) any such interest expense attributable to original issue
discount as a result of Fresh Start Accounting adjustments), less (ii) to the
extent included in clause (i), amortization or write-off of deferred financing
costs of the Company and its consolidated Subsidiaries during such period and
any charge related to any premium or penalty paid in connection with redeeming
or retiring any Indebtedness of the Company and its consolidated Subsidiaries
prior to its Stated Maturity.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries for such period determined in
accordance with GAAP but excluding for such purpose the impact of any Fresh
Start Accounting adjustment; provided, however, that there shall not be included
in such Consolidated Net Income (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition, (iii) any net income (loss) of
any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the limitations contained in (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a net loss
of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (iv) any gain (but not loss) realized
upon the sale or other disposition of any property, plant or equipment of the
Company or its consolidated Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business, (v) any gain (but not loss) realized upon the sale
or other disposition of any Capital Stock of any Person, (vi) any extraordinary
gain or loss, (vii) the cumulative effect of a change in accounting principles
and (viii) any nonrecurring restructuring charges for any fiscal quarter in the
Fiscal Year of the Company commencing October 1, 1995.
<PAGE>
"Consolidated Tangible Net Worth" means the amount by which (i) the total
of the amounts shown on the balance sheet of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recent fiscal quarter of the Company ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (x) the par or stated value of all outstanding Capital Stock of
the Company plus (y) paid-in capital or capital surplus relating to such Capital
Stock plus (z) any retained earnings or earned surplus exceeds (ii) the sum of
(A) any accumulated deficit, (B) any amounts attributable to Disqualified Stock,
(C) the amounts appearing on the assets side of such balance sheet for all
contracts, patents, trademarks, copyrights and other intellectual property
rights, franchises, licenses, goodwill, treasury stock, unamortized debt
discount and expense and similar intangibles, (D) any increase in the amount of
capitalized research and development and capitalized interest subsequent to the
Issue Date, and (E) the amount of any write-up subsequent to the Issue Date in
the book value of any asset owned on the Issue Date resulting from the
revaluation thereof subsequent to such date, or any write-up in excess of the
cost of any asset acquired subsequent to that date.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in foreign currency exchange rates.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its nominees, and
their respective successors.
"Disqualified Stock" of a Person means Redeemable Stock of such Person as
to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the Holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Securities.
"Dollar Equivalent" means, with respect to any monetary amount in a
currency other than U.S. dollars, at any time for the determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as quoted by Citibank, N.A. in New
York City at approximately 11:00 a.m. (New York time) on the date two Business
Days prior to such determination.
"EBITDA" for any period means the Consolidated Net Income for such period,
plus, to the extent deducted in calculating such Consolidated Net Income, (i)
income tax expense, (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense and (v) any charge related to any premium or
penalty paid in connection with redeeming or retiring any Indebtedness prior to
its Stated Maturity, in each case for such period.
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction; provided, that the foregoing
shall not prohibit sales of inventory at a discount or on terms which are
typical in the industry to which such inventory relates. Fair Market Value shall
be determined, except as otherwise provided herein, (i) if such property or
asset has a Fair Market Value less than $5,000,000, by any officer of the
Company or (ii) if such property or asset has a Fair Market Value in excess of
$5,000,000, by the Board of Directors as a whole and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction, of the Board of
Directors delivered to the Trustee.
"Fiscal Year" means a fiscal year of the Company commencing on October 1
and ending on September 30 (or such other fiscal year as the Company may
hereafter adopt). The Company's initial Fiscal Year shall end on September 30,
1996.
"Foreclosure Event" means any foreclosure upon and enforcement of the Lien
of the Collateral Documents by the Trustee.
"Foreign Asset Disposition" means an Asset Disposition in respect of
Capital Stock or assets of a Restricted Subsidiary of the type described in
Section 936 of the Code to the extent that the proceeds of such Asset
Disposition are received by a Person subject in respect of such proceeds to the
tax laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is
incorporated in a jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
"Fresh Start Accounting" means Fresh Start Accounting as described in
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" (Am. Inst. of Certified Public Accountants 1990), as
then in effect, or any comparable statement then in effect.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP consistently applied, except as otherwise
expressly provided in this Indenture.
<PAGE>
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to
keepwell, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Protection Agreement, Commodity Price Protection
Agreement or Currency Exchange Protection Agreement or other similar agreement
or arrangement.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Incur" means to, directly or indirectly, create, issue, assume, Guarantee,
incur (by conversion, exchange or otherwise) extend, assume, or otherwise become
liable for, contingently or otherwise; provided, however, that any Indebtedness
or Capital Stock of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be
deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary.
The terms "Incurrence", "Incurred" and "Incurring" shall each have a correlative
meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all Capital Lease Obligations and all Attributable Indebtedness
of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except (A) Trade Payables and (B)
any obligation to pay any portion of such purchase price that becomes due
only if the earnings attributable to such property or services satisfy
predetermined minimum amounts subsequent to the purchase of such property
or services and the amount of such obligation cannot be determined on the
date of such purchase);
<PAGE>
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on any such
letter of credit;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
of (A) the Fair Market Value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
(ix) to the extent not otherwise included in this definition,
obligations of such Person in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, however, that if such Stock is
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as reflected
in the most recent financial statements of such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the TIA that are deemed to be a part of and govern this
instrument, and any such supplemental indenture, respectively.
<PAGE>
"Indenture Obligations" means the obligations of the Company (and any other
obligor hereunder or under the Securities) to pay principal of, and premium, if
any, and interest on, the Securities when due and payable, whether at maturity,
by acceleration, call for redemption or repurchase, in each case as required
hereunder, and all other amounts due or to become due under or in connection
with this Indenture, the Securities and the other Collateral Documents and the
performance of all other obligations to the Trustee and the Holders under this
Indenture, the Securities and the other Collateral Documents, according to the
terms hereof and thereof.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others)
such Person, or any purchase or acquisition of all or substantially all the
business or assets of, Capital Stock, Indebtedness, any other evidence of
beneficial ownership or other similar instruments issued by, such Person. For
purposes of Sections 4.5 and 4.14, (i) the term "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated as a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer. In determining the amount of any Investment in respect of any property
or asset other than cash, such property or asset shall be valued at its Fair
Market Value at the time of such Investment (unless otherwise specified in this
definition).
"Issue Date" means the first date on which Securities are issued pursuant
to this Indenture.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, preference, priority, security interest,
encumbrance, easement, restriction, covenant, right-of-way, servitude, lien
(statutory or otherwise), charge, other security or similar agreement or
preferential arrangement of any kind or nature whatsoever or other adverse claim
of any kind or nature (including, without limitation, any conditional sale or
other title retention agreement or lease having substantially the same economic
effect of any of the foregoing).
<PAGE>
"Magnetics Division" means the property and assets of the Company or any
Restricted Subsidiary used in connection with the manufacture, marketing and
sale of magnetic tape, computer tape or other magnetic products.
"Mortgage" means a fee or leasehold mortgage instrument or deed of trust
with any related security agreements and assignments of lease and rents to
secure the Indenture Obligations, substantially in the form of Exhibit B
(including such changes to such form as may be necessary or desirable to conform
such form to the local laws or customs applicable to property in the
jurisdiction where such mortgage instrument or deed of trust is to be recorded),
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof, hereof and of any other Collateral
Document.
"Net Cash Proceeds" from an Asset Disposition means the sum of (i) cash
payments and Temporary Cash Investments received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to such
properties or assets or received in any other non-cash form) therefrom and (ii)
the Fair Market Value of all securities issued to the Company or a Subsidiary of
the Company in connection therewith, in each case net of (A) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP as a consequence of such Asset Disposition,
(B) all payments made on any Indebtedness which is secured by any property or
assets subject to such Asset Disposition, in accordance with the terms of any
Lien upon such property or assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (C) all distributions
and other payments required to be made to minority interest Holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (D) the
deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition; provided, that, in the event
that any consideration for such Asset Disposition (which would otherwise
constitute Net Cash Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment shall be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to the Company or any Restricted Subsidiary from
escrow; provided, further, that any non-cash consideration received in
connection with such Asset Disposition, which is subsequently converted to cash,
shall be deemed to be Net Cash Proceeds at such time and shall thereafter be
applied in accordance with Section 4.7. The term "Net Cash Proceeds" from an
issuance or sale of Capital Stock means the cash proceeds of such issuance or
sale, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
<PAGE>
"Officer" means the Chairman of the Board and Chief Executive Officer, the
President and Chief Operating Officer, the Vice President and Chief
Administrative Officer, any other Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means a certificate signed by two Officers at least
one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.
"Opinion of Counsel" means a written opinion, in form acceptable to the
Trustee, from legal counsel who is acceptable to the Trustee. The counsel may be
an employee of or counsel to the Company or the Trustee.
"Ordinary Course of Business" means sales or assignments of inventory or
accounts receivable or the performance of services at Fair Market Value or the
collection of accounts receivable in the ordinary course of business of the
Company and does not include any sale, assignment or collection (i) after any
Foreclosure Event or (ii) after the voluntary or involuntary bankruptcy of the
Company, including, without limitation, those events of the type described in
Section 6.1(9) and (10). The ordinary course of business shall include (i) sales
of inventory to customers, (ii) returns of merchandise to manufacturers or
distributors for refunds or credit and (iii) exchanges of inventory with
manufacturers or distributors for other inventory.
"Pari passu," as applied to the ranking of any Indebtedness of a Person in
relation to other Indebtedness of such Person, means that each such Indebtedness
either (i) is not subordinate in right of payment to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other; and is
so subordinate to the same extent, and is not subordinate in right of payment to
each other or to any Indebtedness as to which the other is not so subordinate.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) a Wholly Owned Subsidiary (including any Person which will
become a Wholly Owned Subsidiary as a result of such Investment) or any Person
that is merged or consolidated with or into, or transfers or conveys all or
substantially all of its business or assets to, the Company or any Wholly Owned
Subsidiary at the time such Investment is made; (ii) Temporary Cash Investments;
(iii) receivables owing to the Company or such Restricted Subsidiary, if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that nothing in this
paragraph shall limit in any way the ability of the Company or such Restricted
Subsidiary to settle, compromise or otherwise deal with such receivables in the
ordinary course of business; (iv) payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the ordinary course of
business; (v) loans or advances, in the aggregate principal amount of $6,000,000
outstanding from time to time, to employees of the Company or such Restricted
Subsidiary made in the ordinary course of business consistent with past
practices of the Company or such Restricted Subsidiary, as the case may be; (vi)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or such Restricted
Subsidiary or in satisfaction of judgments; (vii) joint ventures, whether in the
form of cash or through a contribution of assets (the nature of which, if other
than cash, to be determined in good faith by the Board of Directors, whose
determination shall be evidenced by a Board Resolution delivered to the Trustee)
in an amount not to exceed $10,000,000 at any one time for any joint venture;
provided, however, that the aggregate amount so invested in joint ventures shall
not exceed the amount permitted by Section 4.21; and (viii) any other property,
asset or Person if made pursuant to any written agreement of the Company or such
Restricted Subsidiary in effect on the Issue Date; and (ix) Investments made as
a result of the receipt of non-cash consideration from an Asset Disposition that
was made pursuant to and in compliance with the provisions of Section 4.7 or a
disposition of assets pursuant to and in compliance with the provisions of
Article 5 hereof.
<PAGE>
"Permitted Liens" means (i) pledges or deposits by the Company or any
Restricted Subsidiary under workmen's compensation laws, unemployment insurance
laws, other types of social security benefits or similar legislation, or good
faith deposits in connection with bids, tenders or contracts (other than for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations or
deposits of cash or United States government bonds to secure surety or appeal
bonds to which the Company or any Restricted Subsidiary is a party, or deposits
as security for contested taxes or import duties or for the payment of rent, in
each case incurred by the Company or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; (ii) Liens imposed by law,
such as carriers', warehousemen's and mechanics Liens, in each case for sums not
yet due from the Company or any Restricted Subsidiary or being contested in good
faith by appropriate proceedings by the Company or any Restricted Subsidiary, as
the case may be, or other Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary, as the case may be, shall then be prosecuting an appeal
or other proceedings for review; (iii) Liens for property taxes or other taxes,
assessments or governmental charges of the Company or any Restricted Subsidiary
not yet due or payable or subject to penalties for nonpayment or which are being
contested by the Company or such Restricted Subsidiary, as the case may be, in
good faith by appropriate proceedings; (iv) Liens in favor of issuers of standby
letters of credit, performance bonds and surety bonds; (v) survey exceptions,
encumbrances, easements or reservations of, or rights of others for, licenses,
rights-of-way, sewers, electric lines, telegraph and telephone lines and other
similar purposes or zoning or other restrictions as to the use of real property
of the Company or any Restricted Subsidiary incidental to the ordinary course of
conduct of the business of the Company or such Restricted Subsidiary or as to
the ownership of properties of the Company or any Restricted Subsidiary, which,
in either case, were not incurred in connection with Indebtedness and which do
not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of the Company or
any Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted under
Section 4.3(b)(i) and Section 4.4(b)(iv); (vii) Liens outstanding immediately
after the Issue Date as set forth on Schedule II hereto (and not otherwise
permitted by clause (vi)); (viii) Liens on property, assets or shares of stock
of any Restricted Subsidiary at the time such Restricted Subsidiary became a
Subsidiary of the Company; provided, however, that (A) if any such Lien shall
have been Incurred in anticipation of such transaction, such property, assets or
shares of stock subject to such Lien shall have a Fair Market Value at the date
of the acquisition thereof not in excess of the lesser of (1) the aggregate
purchase price paid or owed by the Company in connection with the acquisition of
such Restricted Subsidiary and (2) the Fair Market Value of all property and
assets of such Restricted Subsidiary and (B) any such Lien shall not extend to
any other property or assets owned by the Company or any Restricted Subsidiary;
<PAGE>
(ix) Liens on property or assets at the time the Company or any Restricted
Subsidiary acquired such property or assets, including any acquisition by means
of a merger or consolidation with or into the Company or such Restricted
Subsidiary; provided, however, that (A) if any such Lien shall have been
incurred in anticipation of such transaction, such property or assets subject to
such Lien shall have a Fair Market Value at the date of the acquisition thereof
not in excess of the lesser of (1) the aggregate purchase price paid or owed by
the Company or such Restricted Subsidiary in connection with the acquisition
thereof and of any other property and assets acquired simultaneously therewith
and (2) the Fair Market Value of all such property and assets acquired by the
Company or such Restricted Subsidiary and (B) any such Lien shall not extend to
any other property or assets owned by the Company or any Restricted Subsidiary;
(x) Liens securing Indebtedness or other obligations of a Restricted Subsidiary
owing to the Company or a Wholly Owned Subsidiary; (xi) Liens to secure any
extension, renewal, refinancing, replacement or refunding (or successive
extensions, renewals, refinancings, replacements or refundings), in whole or in
part, of any Indebtedness secured by Liens referred to in any of clauses (vii),
(viii) and (ix); provided, however, that any such Lien will be limited to all or
part of the same property or assets that secured the original Lien (plus
improvements on such property) and the aggregate principal amount of
Indebtedness that is secured by such Lien will not be increased to an amount
greater than the sum of (A) the outstanding principal amount, or, if greater,
the committed amount, of the Indebtedness described under clauses (vii), (viii)
and (ix) at the time the original Lien became a Permitted Lien under the
Indenture and (B) an amount necessary to pay any premiums, fees and other
expenses Incurred by the Company in connection with such refinancing, refunding,
extension, renewal or replacement; and (xii) Liens on property or assets of the
Company or any Restricted Subsidiary securing Indebtedness (1) under Purchase
Money Indebtedness or Capital Lease Obligations permitted under, in the case of
the Company, Section 4.3(b) and, in the case of such Restricted Subsidiary,
Section 4.4(b); provided, that (A) the amount of Indebtedness Incurred in any
specific case does not, at the time such Indebtedness is Incurred, exceed the
lesser of the cost or Fair Market Value of the property or asset acquired or
constructed in connection with such Purchase Money Indebtedness or Capital Lease
Obligation, (B) such Lien shall attach to such property or asset upon
acquisition of such property or asset, and (C) no property or asset of the
Company or any Restricted Subsidiary (other than the property or asset acquired
or contracted in connection with such Purchase Money Indebtedness or Capital
Lease Obligation) are subject to any Lien securing such Indebtedness.
<PAGE>
"Permitted Line of Business" means (i) the line or lines of business in
which the Company or any of its Subsidiaries is engaged on the Issue Date and
(ii) a line or lines of business similar or related to the line or lines of
business described in the foregoing clause (i).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pledged Securities" has the meaning set forth in the Security and Pledge
Agreement.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Proceeds" has the meaning set forth in the Security and Pledge Agreement.
"Pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms hereof, a calculation in accordance with Article 11
of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Purchase Money Indebtedness" means, with respect to any Person, all
obligations of such Person (i) consisting of the deferred purchase price of any
property or assets, conditional sale obligations, obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business) and other purchase money obligations, in each case
where the maturity of such obligation does not exceed the anticipated useful
life of the property or asset being financed, (ii) Incurred to finance the
acquisition or construction of any property or asset and (iii) Incurred to
finance the acquisition of 100% of the Capital Stock (other than directors'
qualifying shares) of any other Person.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including, without limitation,
upon the happening of any event) (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or
exchangeable for Indebtedness (other than Preferred Stock) or Disqualified Stock
or (iii) is redeemable at the option of the Holder thereof, in whole or in part.
<PAGE>
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (collectively, "refinances," "refinancing"
and "refinanced" shall have a correlative meaning) any Indebtedness (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary), including Indebtedness that
refinances Refinancing Indebtedness; provided, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and (iii)
such Refinancing Indebtedness is Incurred in an aggregate principal amount (or
if issued with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (A) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced and (B) any premiums, fees and other expenses paid
by the Company or the Restricted Subsidiary, as the case may be, in connection
with such refinancing; provided, further, that Refinancing Indebtedness shall
not include (x) Indebtedness of a Subsidiary of the Company that refinances
Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; provided,
further, that the covenants relating to the Refinancing Indebtedness are no more
restrictive in the aggregate than those of the Indebtedness being refinanced
and, if the Indebtedness being refinanced is subordinated to the Securities, the
Refinancing Indebtedness is at least as subordinated to the Securities as the
Indebtedness being refinanced.
"Replacement Collateral" means, at any relevant date in connection with an
Asset Disposition, property or assets used in, or Capital Stock of any Person
related to the Company's business, other than the Collateral.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby pursuant to a direct or indirect arrangement
the Company or any Restricted Subsidiary of the Company transfers such property
to a Person and the Company or such Restricted Subsidiary leases it from such
Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933.
"Security and Pledge Agreement" means the Security and Pledge Agreement
pursuant to which certain Collateral is pledged to secure the Company's
obligations under the Securities substantially in the form of Exhibit C, as the
same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms thereof and hereof.
<PAGE>
"Senior Subordinated Indenture" means the Indenture, dated as of June 4,
1996, between the Company and IBJ Schroder Bank & Trust Company, as Trustee, as
the same may be amended, supplemented or modified in accordance with its terms.
"Senior Subordinated Notes" means the 13% Senior Subordinated Notes due
2002 of the Company issued pursuant to the Senior Subordinated Indenture,
including any Senior Subordinated Notes issued upon the transfer thereof or in
substitution therefor and any Senior Subordinated Notes issued in payment of
accrued interest, as the same may be amended, modified, supplemented or extended
from time to time (provided that the term "Senior Subordinated Notes" shall not
include any amendment, modification or extension thereof, or supplement thereto,
to the extent such amendment, modification, extension or supplement increases or
permits increase in the principal amount outstanding or to be outstanding
thereunder not permitted under the terms of Section 4.3 ("Non-Permitted
Increases"), and in the event any such Non-Permitted Increases are provided for
in any such amendment, supplement, modification or extension, the term "Senior
Subordinated Notes" shall thereafter mean the Senior Subordinated Notes as in
effect prior thereto without giving effect to such Non-Permitted Increases).
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Indebtedness" means (i) the Senior Subordinated Notes and
(ii) any other unsecured Indebtedness of the Company (whether outstanding on the
Issue Date or thereafter Incurred) which, pursuant to the terms of the
instrument creating or evidencing the same or pursuant to the terms of any
written agreement, is subordinate in right of payment to the Securities and as
to which no principal is required to be repaid until after the Stated Maturity
of the Securities.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) investments in
U.S. Government Obligations maturing within 90 days of the date of acquisition
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any State thereof having capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the Dollar
Equivalent thereof) and whose long-term debt is rated "A" or higher according to
Moody's Investors Service, Inc. (or such equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule 436
under the Securities Act)), (iii) repurchase obligations with a term of not more
than 7 days for underlying securities of the types described in clause (i)
entered into with a bank meeting the qualifications described in clause (ii) and
(iv) investments in commercial paper, maturing not more than 90 days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group.
<PAGE>
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trade Payables" means, with respect to any Person, any accounts payable or
any indebtedness or monetary obligation to trade creditors created, assumed or
Guaranteed by such Person arising in the ordinary course of business of such
Person in connection with the acquisition of goods or services, including under
the Company's Amended and Restated Master Supply Agreement dated as of October
8, 1993, among the Company, SKC Limited and SKC America, Inc., as such Agreement
is in effect on the Issue Date.
"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 the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in, unless the context otherwise specifies, New York.
"Unrestricted Subsidiary" means (i) each Subsidiary of the Company that the
Company has designated, or is deemed to have designated, pursuant to the
provisions described under Section 4.14 as an Unrestricted Subsidiary and that
has not been redesignated a Restricted Subsidiary and (ii) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
<PAGE>
"U.S. Restricted Subsidiary" means any Restricted Subsidiary that is not a
Foreign Restricted Subsidiary.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
or another Wholly Owned Subsidiary.
SECTION 1.2. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"........................................... 4.8
"Asset Disposition Purchase Amount"............................... 4.7(f)
"Asset Disposition Purchase Date"................................. 4.7(g)
"Asset Disposition Purchase Notice"............................... 4.7(h)
"Asset Disposition Purchase Offer"................................ 4.7(f)
"Asset Disposition Purchase Price"................................ 4.7(f)
"Asset Disposition Trigger"....................................... 4.7(f)
"Bankruptcy Law".................................................. 6.1
"Change of Control Offer"......................................... 4.9(a)
"Change of Control Purchase Date"................................. 4.9(a)
"Change of Control Purchase Notice"............................... 4.9(a)
"Change of Control Purchase Price"................................ 4.9(a)
"Custodian"....................................................... 6.1
"Defaulted Interest".............................................. 2.13
"Event of Default"................................................ 6.1
"Excess Proceeds"................................................. 4.7(d)
"Global Securities"............................................... 2.1
"Legal Holiday"................................................... 12.7
"Notice of Default"............................................... 6.1
"Paying Agent".................................................... 2.3
"Permitted Indebtedness".......................................... 4.3(b)
"Permitted Restricted Subsidiary Indebtedness".................... 4.4(b)
"Refinanced Indebtedness"......................................... 4.3(e)
"Registrar"....................................................... 2.3
"Release Notice".................................................. 10.7
"Release Termination"............................................. 10.7
"Replacement Collateral Purchase"................................. 4.7(b)
"Restricted Payment".............................................. 4.5
"Substitute Collateral"........................................... 10.8
"Surviving Entity"................................................ 5
"Trust Monies".................................................... 11.1
<PAGE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
<PAGE>
ARTICLE 2
The Securities
--------------
SECTION 2.1. Form and Dating. The Securities and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). The Company shall furnish any such legend not contained in
Exhibit A to the Trustee in writing. Each Security shall be dated the date of
its authentication. The terms of the Securities set forth in Exhibit A are part
of the terms of this Indenture.
The Securities shall be issued initially in the form of one or more
permanent global Securities in registered form, substantially in the form set
forth in Exhibit A (the "Global Securities"), deposited with, or on behalf of,
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Each Global Security shall bear such legend as may be
required or reasonably requested by the Depositary.
SECTION 2.2. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall, upon receipt of a written order of the Company signed by
two officers, authenticate and make available for delivery Global Securities for
original issue in an aggregate principal amount of up to $112,190,000,
registered in the name of the Depositary or the nominee of the Depositary, and
shall deliver such Global Securities to the Depositary or pursuant to the
Depositary's instructions. Such order shall specify the amount of the Global
Securities to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $112,190,000 except as provided in
Section 2.9. The Securities shall be issued in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof.
<PAGE>
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"), at least one of each such office
to be located in the City of New York. The Registrar shall keep a register of
the Securities and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. 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 such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Securities.
SECTION 2.4. Deposit of Moneys; Paying Agent To Hold Money in Trust. Prior
to 11:00 a.m. New York City time on each due date of the principal and interest
on any Security, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary of the
Company acts as Paying Agent, it shall segregate the money held by it as Paying
Agent 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 to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.5. Securityholder 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 Securityholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
<PAGE>
SECTION 2.6. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. No service charge shall
be made for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any transfer or exchange pursuant
to this Section.
Prior to the due presentation for registration of transfer of any Security,
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary. Furthermore, any Holder of a Global Security
shall, by acceptance of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Depositary (or its agent), and that ownership of a
beneficial interest in the Global Security shall be required to be reflected in
a book entry.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Securities and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
All Securities issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
SECTION 2.7. Book-Entry Provisions for Global Securities. (a) The Global
Securities initially shall (i) be registered in the name of the Depositary or
the nominee of the Depositary and (ii) be delivered to the Trustee as custodian
for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under any Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute legal owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Security.
<PAGE>
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 2.9.
(c) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.8. Certificated Securities. If the Depositary is at any time
unwilling or unable to continue as a depositary for the Global Security and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue certificated Securities in exchange for the Global Securities. In
connection with the execution and delivery of such certificated Securities, the
Trustee shall reflect on its books and records a decrease in the principal
amount of the relevant Global Security equal to the aggregate principal amount
of such certificated Securities and the Company shall execute and the Trustee
shall, upon receipt of a written order of the Company signed by two officers,
authenticate and deliver one or more certificated Securities in an equal
aggregate principal amount.
SECTION 2.9. Replacement Securities. If a mutilated Security is surrendered
to the Registrar or if the Holder of a Security claims that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee or the Company. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security.
<PAGE>
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal of, and premium, if any, and interest payable on, that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as
the case may be, then on and after that date such Securities (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Subsidiary thereof or by any other Affiliate controlled
by the Company shall be considered as though not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which the Trustee
actually knows are so owned shall be so disregarded.
In determining whether the Holders of the required principal amount of
Securities have (i) directed the time, method or place of conducting any
proceeding for any remedy available to the Trustee hereunder, or exercising any
trust or power conferred upon the Trustee; (ii) consented to the waiver of any
past Event of Default and its consequences; or (iii) consented to the
postponement of any interest payment, Securities owned by Affiliates of the
Company shall be disregarded and considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee actually knows are so owned shall be so disregarded. The Company shall
notify the Trustee, in writing, when it or any of its Affiliates purchases or
otherwise acquires Securities, of the aggregate principal amount of such
Securities so purchased or otherwise acquired.
SECTION 2.11. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver such canceled Securities to the Company. The Company
may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
<PAGE>
SECTION 2.13. Defaulted Interest. Any interest on any Security which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Securities and this Indenture (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant record date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to
be given to each Holder, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities are registered
at the close of business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.13, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Record Date. The Company may set a record date for purposes
of determining the identity of Securityholders entitled to vote or to consent to
any action by vote or consent authorized or permitted by Sections 6.4 and 6.5.
Unless this Indenture provides otherwise, such record date shall be the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Securityholders furnished to the Trustee pursuant to Section 2.5
prior to such solicitation.
<PAGE>
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may use
CUSIP numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as of convenience to Holders; provided,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
Redemption
----------
SECTION 3.1. Notice to Trustee. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities or is required to redeem Securities
pursuant to paragraph 6 of the Securities, it shall notify the Trustee in
writing of the redemption date, the principal amount of Securities to be
redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
If the Company is required to redeem Securities pursuant to paragraph 6 of
the Securities, it may reduce the principal amount of Securities required to be
redeemed to the extent it is permitted a credit by the terms of the Securities
and it notifies the Trustee of the amount of the credit and the basis for it. If
the reduction is based on a credit for purchased, redeemed or canceled
Securities that the Company has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with the notice.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days (or such lesser time as is acceptable to the Trustee)
but not more than 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances; provided, however, that
Securities redeemed pursuant to paragraph 5 and paragraph 6 of the Securities
shall be redeemed pro rata. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be redeemed.
<PAGE>
SECTION 3.3. Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of Securities, the Company shall mail a notice
of redemption by first-class mail to each Holder of Securities to be redeemed;
provided, however, that, in the case of any mandatory redemption pursuant to
paragraph 6 of the Securities, notice of such redemption shall be given at least
fifteen Business Days prior to the date fixed for redemption.
The notice shall identify the Securities to be redeemed (including CUSIP
number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portions thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date). Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
<PAGE>
SECTION 3.5. Deposit of Redemption Price. On or prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest (subject to the
right of Holders of record on the relevant record date to receive interest due
on the related interest payment date) on all Securities to be redeemed on that
date other than Securities or portions of Securities called for redemption which
have been delivered by the Company to the Trustee for cancellation.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.1. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (other than the Company or a Wholly Owned Subsidiary acting as Paying
Agent) holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.2. SEC Reports. The Company shall file the annual report and
other documents, reports and information required by Section 13 or 15(d) of the
Exchange Act with the SEC and, upon such filing, the Company shall (i) promptly
furnish such reports, documents and information to the Trustee and (ii) within
15 days after such filing with the SEC, furnish, or cause the Trustee to
furnish, such reports, documents and information to the Securityholders. The
Company shall use its best efforts to remain subject to the periodic reporting
requirements of Section 13 of the Exchange Act. In the event the Company is no
longer subject to the periodic reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC and furnish to the Trustee
and to the Securityholders the annual reports and other documents, reports and
information as if it were subject to such reporting requirements; provided,
however, that the Company shall not be so obligated to file such reports,
documents and information with the SEC if the SEC does not permit or accept such
filings, in which event such reports, documents and information shall be
provided to the Trustee and the Holders at the times the Company would have been
required to provide such reports, documents and information had it continued to
have been subject to such reporting requirements. The Company also shall comply
with the other provisions of TIA section 314(a).
<PAGE>
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Indebtedness. (a) The Company shall not,
directly or indirectly, Incur any Indebtedness unless (i) no Default or Event of
Default shall have occurred and be continuing at the time of such Incurrence or
would occur as a consequence of such Incurrence and (ii) such Indebtedness is
Permitted Indebtedness under Section 4.3(b).
(b) "Permitted Indebtedness" means:
(i) Indebtedness represented by the Securities;
(ii) Indebtedness to be outstanding immediately after the Issue Date
and listed on Schedule I to this Indenture;
(iii) Indebtedness owing to and held by any Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital
Stock that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or another Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the incurrence of such Indebtedness by the
issuer thereof;
(iv) Indebtedness Incurred in connection with a prepayment of the
Securities pursuant to a Change of Control Offer; provided, however, that
the aggregate principal amount of such Indebtedness does not exceed 100% of
the aggregate principal amount of the Securities prepaid; provided,
further, however, that such Indebtedness (A) has an Average Life equal to
or greater than the remaining Average Life of the Securities and (B) does
not mature prior to the Stated Maturity of the Securities;
(v) Indebtedness represented by the Senior Subordinated Notes;
(vi) Indebtedness in respect of Guarantees by the Company of
Indebtedness of any Restricted Subsidiary permitted to be Incurred under
Section 4.4(b);
(vii) Subordinated Indebtedness Incurred in connection with one or
more acquisitions of assets or capital stock of a business or businesses in
an aggregate principal amount not to exceed $10,000,000 Incurred in any
Fiscal Year of the Company (or, for the period from the Issue Date until
September 30, 1996, in an aggregate principal amount not to exceed
$3,333,333); provided, however, that in the case of each such acquisition,
the Subordinated Indebtedness Incurred shall not represent more than 37.5%
of the aggregate purchase price payable upon consummation of such
acquisition.
<PAGE>
(viii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (ii) (other than the Senior Subordinated
Notes), (iv) or (vii) above; and
(ix) in addition to any Indebtedness permitted by clauses (i) through
(viii) above, up to an aggregate of (A) during the period prior to the
first anniversary of the Issue Date, $20,000,000 in principal amount of
Indebtedness at any one time outstanding and (B) thereafter, $30,000,000 in
principal amount of Indebtedness at any one time outstanding.
(c) The Company shall not directly or indirectly Incur any Indebtedness if
the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Indebtedness.
(d) For purposes of determining the outstanding principal amount of any
particular Indebtedness Incurred pursuant to this Section or Section 4.4, (1)
Indebtedness permitted by this Section or Section 4.4 need not be permitted
solely by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section or Section 4.4 permitting such Indebtedness and (2)
in the event that Indebtedness or any portion thereof meets the criteria of more
than one of the types of Indebtedness described in this Section or Section 4.4,
the Company, in its sole discretion, shall classify such Indebtedness and only
be required to include the amount of such Indebtedness in one of such types.
(e) For purposes of determining whether the principal amount of any
Refinancing Indebtedness permitted by this Section or Section 4.4 does not, in
the event it is issued in a currency different from the currency in which the
Indebtedness being refunded or refinanced or paid at maturity ("Refinanced
Indebtedness") was issued, exceed the principal amount of the Refinanced
Indebtedness, the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
"Currency Trading" on the date two Business Days prior to such determination,
shall be used. If The Wall Street Journal does not publish such spot rate on
such date, then the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as quoted by
Citibank N.A., or any successor thereto, in New York City at approximately 11:00
a.m. (New York time) on the date two Business Days prior to such determination,
shall be used.
<PAGE>
Except as provided in the preceding paragraph, for purposes of determining
the Dollar Equivalent of any Indebtedness denominated in a currency other than
U.S. dollars outstanding at any time as permitted by this Section or Section
4.4, such Dollar Equivalent shall be the Dollar Equivalent of such currency at
the date such Indebtedness is issued; provided, however, that if such
Indebtedness constituted Refinancing Indebtedness, such conversion shall be made
based on the Dollar Equivalent of the Refinanced Indebtedness at the date of the
issuance of the Refinanced Indebtedness (or any preceding Refinanced
Indebtedness, as applicable).
SECTION 4.4. Limitation on Restricted Subsidiary Indebtedness and Preferred
Stock. (a) The Company shall not permit any Restricted Subsidiary to, directly
or indirectly, Incur any Indebtedness or issue any Preferred Stock unless (i) no
Default or Event of Default shall have occurred and be continuing at the time of
such Incurrence or would occur as a consequence of such Incurrence and (ii) such
Indebtedness or Preferred Stock is Permitted Restricted Subsidiary Indebtedness
under Section 4.4(b).
(b) "Permitted Restricted Subsidiary Indebtedness" means:
(i) Indebtedness or Preferred Stock to be outstanding immediately
after the Issue Date and listed on Schedule I to this Indenture;
(ii) Indebtedness or Preferred Stock owing to and held by the Company
or any Wholly Owned Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the incurrence of
such Indebtedness by the issuer thereof;
(iii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) above; and
(iv) in addition to any Indebtedness permitted by clauses (i) through
(iii) above, up to an aggregate of $10,000,000 in principal amount of
Indebtedness of Foreign Restricted Subsidiaries at any one time
outstanding.
SECTION 4.5. Limitation on Restricted Payments. The Company shall not, and
shall not permit any Restricted Subsidiary, to, directly or indirectly, (i)
declare or pay any dividend on, or make any distribution on or in respect of,
its Capital Stock (including any payment in connection with any merger or
consolidation involving the Company), except dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase such Capital Stock and except dividends or
distributions payable solely to the Company or any Restricted Subsidiary, (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of the
Company or any Restricted Subsidiary held by Persons other than the Company or a
Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value (including pursuant to mandatory repurchase
covenants) any Subordinated Indebtedness or (iv) make any Investment (other than
a Permitted Investment) in any Person (any such dividend, distribution,
purchase, redemption, repurchase, defeasance, other acquisition, retirement or
Investment being herein referred to as a "Restricted Payment").
<PAGE>
SECTION 4.6. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on or
in respect of its Capital Stock to the Company or any Restricted Subsidiary or
pay any Indebtedness owed to the Company or any Restricted Subsidiary, (ii) make
loans or advances to the Company or (iii) transfer any of its property or assets
to the Company or any Restricted Subsidiary, except for:
(a) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date;
(b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary became a Subsidiary of, or was acquired by, the
Company (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary of, or was acquired
by, the Company) and outstanding on such date;
(c) any encumbrance or restriction pursuant to an agreement relating
to an acquisition of property, so long as the encumbrances or restrictions
in such agreement relate solely to the property so acquired;
(d) any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness Incurred pursuant to an agreement referred to
in clause (a), (b) or (c) or contained in any amendment to any such
agreement or amendment; provided, however, that any encumbrance and any
restriction contained in any such refinancing agreement or amendment is no
less favorable to the Securityholders than any encumbrance or restriction
contained in such agreement; and
(e) in the case of clause (iii), any encumbrance or restriction (1)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (2) arising by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (3) arising or agreed to in the
ordinary course of business and that does not, individually or in the
aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or such
Restricted Subsidiary.
<PAGE>
SECTION 4.7. Limitation on Sales and Assets and Restricted Subsidiary
Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Disposition unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Disposition at least equal to the Fair Market Value of the shares, property and
assets subject to such Asset Disposition, (ii) at least 75% of such
consideration (or, in the event of any Asset Disposition of all or any portion
of the Company's Magnetics Division or a Foreign Subsidiary, at least 50% of
such consideration) consists of cash or Temporary Cash Investments and (iii) in
connection with any Asset Disposition with an aggregate consideration greater
than $10,000,000, the Company delivers an Officers' Certificate to the Trustee
certifying that such Asset Disposition complies with clauses (i) and (ii) and
that such Asset Disposition was approved by a majority of the Board of Directors
including a majority of the disinterested members of the Board of Directors, as
evidenced by a Board Resolution delivered to the Trustee. Upon the closing of
any such Asset Disposition, the Company shall cause the Net Cash Proceeds from
such Asset Disposition to be delivered to the Trustee and pledged to the Trustee
for deposit in a collateral account in the name and under the sole dominion and
control of the Trustee and shall take such other actions, at the sole expense of
the Company, as shall be reasonably requested by the Trustee to create in favor
of the Trustee on behalf of the securityholders a perfected first priority Lien
in respect of such Net Cash Proceeds and all other property and assets received
in connection with such Asset Disposition and to insure that all such Collateral
shall be free and clear of all Liens other than Permitted Liens. Any proceeds
from an Asset Disposition, other than Net Cash Proceeds, shall be subject to the
Lien of this Indenture and the other Collateral Documents in accordance with the
provisions of this Indenture.
(b) Within 365 days after the receipt of any Net Cash Proceeds in
connection with any Asset Disposition, the Company or such Restricted
Subsidiary, as the case may be, may, subject to the procedures set forth in
Section 4.7(c), reinvest such Net Cash Proceeds in an amount not to exceed
$3,500,000 in any 365-day period in Replacement Collateral (other than
inventory) at a purchase price which does not exceed the Fair Market Value of
such Replacement Collateral so purchased (a "Replacement Collateral Purchase").
(c) If the Company or a Restricted Subsidiary reinvests any Net Cash
Proceeds pursuant to Section 4.7(b), the Company or such Restricted Subsidiary
shall deliver an Officers' Certificate to the Trustee certifying that such
Replacement Collateral Purchase complies with Section 4.7(b). The Company will
take such actions, at the sole expense of the Company, to create in favor of the
Trustee for the benefit of the Holders a perfected first priority Lien in
respect of any Replacement Collateral concurrently with the acquisition thereof.
Such Replacement Collateral will be free and clear of Liens other than Permitted
Liens.
<PAGE>
(d) Upon receipt by the Trustee of the documents and instruments described
in Section 4.7(c) in a form reasonably satisfactory to the Trustee, evidence of
the taking of such actions reasonably satisfactory to the Trustee, as may be
necessary or desirable, to create in favor of the Trustee the Lien in respect of
the related Replacement Collateral required by Section 4.7(c) and the Collateral
Documents and compliance with the provisions of Section 10.6, the Trustee shall,
unless a Default or Event of Default shall have occurred at any time and be
continuing, simultaneously release from the Lien of the Indenture and the other
Collateral Documents, and deliver to the Company, the Net Cash Proceeds that
were delivered to the Trustee, together with the proceeds thereof, in the amount
requested by the Company or such Restricted Subsidiary; provided, that such
amount shall not exceed the purchase price of the Replacement Collateral. In the
event any Replacement Collateral is Capital Stock of any Person and such Person
will be a Restricted Subsidiary, the Company shall cause such Capital Stock to
be pledged to the Trustee for the benefit of Holders of the Securities;
provided, that, in the event such Person shall be a Foreign Restricted
Subsidiary, such pledge shall be limited to an amount equal to the lesser of:
(i) 65% of the total voting power of shares of all the outstanding Capital Stock
of such Person entitled to vote in the election of directors, managers or
trustees of such Person and (ii) the percentage of the shares of such Capital
Stock equal to the maximum percentage of such shares that can be pledged to the
Trustee without constituting an investment of earnings in United States property
under Section 956 (or any successor provision) of the Code that would trigger an
increase in the gross income of the Company or any of its Subsidiaries pursuant
to Section 951 (or any successor provision) of the Code. In any event of any
such pledge of the Capital Stock, all the assets and property of the issuer of
such Capital Stock shall be considered, if such issuer shall be a U.S.
Restricted Subsidiary, Replacement Collateral and the requirements described in
Section 4.7(c) relating to the pledge thereof to the Trustee shall apply in
full. Any Net Cash Proceeds received by the Company from Asset Dispositions in
excess of $3,500,000 during any 365-day period and any Net Cash Proceeds up to
$3,500,000 that are not used within 365 days of receipt thereof and in
accordance with the procedures referenced in the first sentence of this
paragraph will constitute "Excess Proceeds".
(e) To the extent that any or all of the Net Cash Proceeds of any Foreign
Asset Disposition received by a Restricted Subsidiary is prohibited or delayed
by applicable local law from being repatriated to the United States of America,
the portion of such Net Cash Proceeds so affected shall not be required to be
applied at the time provided above, but may be retained by the applicable
Restricted Subsidiary so long, but only so long, as the applicable local law
will not permit repatriation to the United States of America (the Company
agreeing to, and to cause such Restricted Subsidiary to, promptly take all
actions required by the applicable local law to permit such repatriation). Once
such repatriation of any such affected Net Cash Proceeds is permitted under the
applicable local law, such repatriation shall be immediately effected and such
repatriated Net Cash Proceeds will be applicable in the manner set forth in this
Section.
<PAGE>
(f) Each time that the aggregate amount of Excess Proceeds relating to
Asset Dispositions equals or exceeds $2,000,000, taking into account income
earned on such Excess Proceeds (the "Asset Disposition Trigger"), the Company
shall, at its option, either (i) apply (x) 50% of such Excess Proceeds to the
payment as and when due of one or more scheduled installments of principal of
the Securities in order of maturity and (y) 50% of such Excess Proceeds to the
redemption of Securities in accordance with paragraph 6 of the Securities or
(ii) make an offer to purchase (an "Asset Disposition Purchase Offer") an
aggregate principal amount of outstanding Securities equal to the aggregate
Excess Proceeds at such time (the "Asset Disposition Purchase Amount") for cash
at a purchase price (such price, the "Asset Disposition Purchase Price") equal
to 100% of the principal amount of the Securities so purchased plus any accrued
and unpaid interest thereon to the Asset Disposition Purchase Date (as defined
in Section 4.7(g)), in accordance with the procedures (including prorationing in
the event of over subscription) set forth in Section 4.7(g). Any such Excess
Proceeds which remain after the acquisition by the Company of Securities
tendered (and not withdrawn) by Securityholders pursuant to any such Asset
Disposition Purchase Offer in accordance with the procedures (including
proration in the event of oversubscription) set forth in Section 4.7(h) shall
cease to be Excess Proceeds and, notwithstanding the restrictions set forth in
Section 4.7(b), may be reinvested by the Company in Replacement Collateral.
(g) Within 30 days of the occurrence of an Asset Disposition Trigger, (i)
the Company shall notify the Trustee in writing of the occurrence of the Asset
Disposition Trigger and shall inform the Trustee as to whether the Company
elects to make the Asset Disposition Purchase Offer, (ii) if the Company elects
to make the Asset Disposition Purchase Offer, (x) the Company shall make such
Offer to purchase Securities in an aggregate principal amount equal to the Asset
Disposition Purchase Amount at the Asset Disposition Purchase Price on or before
the date specified in such notice, which date shall be no more than 60 Business
Days after the occurrence of the Asset Disposition Trigger (the "Asset
Disposition Purchase Date"), (y) the Trustee shall mail a copy of the Asset
Disposition Purchase Offer to each Securityholder and (z) the Company shall
cause a notice of the Asset Disposition Purchase Offer to be sent to the Dow
Jones News Service or similar business news service in the United States of
America. Any such Asset Disposition Purchase Offer shall remain open from the
time such offer is made until the Asset Disposition Purchase Date. The Company
shall purchase all Securities properly tendered pursuant to any such Asset
Disposition Purchase Offer and not withdrawn in accordance with the procedures
set forth in the Asset Disposition Purchase Notice (as defined below). The
Trustee shall be under no obligation to ascertain, and the Trustee shall not be
deemed to have knowledge of, the occurrence of an Asset Disposition Trigger or
to give notice with respect thereto other than as provided above upon receipt of
an Asset Disposition Purchase Offer from the Company. The Trustee may
conclusively assume, in the absence of receipt of notice from the Company, that
no Asset Disposition Trigger has occurred. Any such Asset Disposition Purchase
Offer shall include a form of Asset Disposition Purchase Notice to be completed
by the Securityholder and shall state or provide:
(1) the nature of the Asset Dispositions resulting in the Asset
Disposition Trigger, the date or dates such Asset Dispositions occurred and
the amount of the Net Cash Proceeds;
(2) that the Asset Disposition Purchase Offer is being made pursuant
to this Section 4.7(g) and that Securities in an aggregate principal amount
equal to the Asset Disposition Purchase Amount, selected in accordance with
this Indenture (if more than such amount shall be tendered) on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so
that only Securities in denominations of $1,000, or integral multiples
thereof, shall be purchased) from among all the Securities properly
tendered pursuant to the Asset Disposition Purchase Offer, will be accepted
for payment;
<PAGE>
(3) the date by which the Asset Disposition Purchase Notice pursuant
to this Section 4.7(g) must be given;
(4) the Asset Disposition Purchase Date;
(5) the Asset Disposition Purchase Price;
(6) the name and address of the Paying Agent;
(7) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(8) information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports) and (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such Reports;
(9) that the Asset Disposition Purchase Price for any Security as to
which an Asset Disposition Purchase Notice has been duly given and not
withdrawn (subject to proration if Securities with an aggregate principal
amount greater than the Asset Disposition Purchase Amount are so tendered)
will be paid promptly upon the later to occur of the first Business Day
following the Asset Disposition Purchase Date and the time of surrender of
such Security as described in clause (7);
(10) the procedures the Holder must follow to accept the Asset
Disposition Purchase Offer; and
(11) the procedures for withdrawing an Asset Disposition Purchase
Notice.
(h) A Holder may accept an Asset Disposition Purchase Offer by delivering
to the Paying Agent at the office of the Paying Agent a written notice (an
"Asset Disposition Purchase Notice") at any time prior to the close of business
in the location of the office of the Paying Agent on the Asset Sale Purchase
Date, stating:
(1) that such Holder elects to have a Security purchased pursuant to
the Asset Disposition Purchase Offer;
(2) the principal amount of the Security that the Holder elects to
have purchased by the Company, which amount must be $1,000 or an integral
multiple thereof, and the certificate numbers of the Securities to be
delivered by such securityholder for purchase by the Company; and
<PAGE>
(3) that such Security shall be purchased on the Asset Disposition
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary endorsements, as
determined by the Company) to the Paying Agent at the office of the Paying Agent
prior to, on or after the Asset Disposition Purchase Date shall be a condition
to the receipt by the Holder of the Asset Disposition Purchase Price therefor;
provided, that such Asset Disposition Purchase Price shall be so paid pursuant
to this Section 4.7(h) only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof set forth in the
related Asset Disposition Purchase Notice. If at the expiration of the Asset
Disposition Purchase Offer the aggregate principal amount of Securities
surrendered by Holders exceeds the Asset Disposition Purchase Amount, the
Company or the Trustee shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000, or integral multiples thereof, shall
be purchased). Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to an Asset
Disposition Purchase Offer made in accordance with this Section 4.7, a portion
of a Security if the principal amount of such portion is $1,000 or an integral
multiple of $1,000. Provisions of this Indenture that apply to the purchase of
all of a Security also apply to the purchase of a portion of such Security.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Asset Disposition Purchase Notice or written notice of withdrawal thereof.
Upon receipt by the Paying Agent of an Asset Disposition Purchase Notice,
the Holder of the Security in respect of which such Asset Disposition Purchase
Notice was given shall (unless such Asset Disposition Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Asset Disposition Purchase Price with respect to such
Security (subject to proration if Securities with an aggregate principal amount
greater than the Asset Disposition Purchase Amount are properly tendered). Such
Asset Disposition Purchase Price shall be paid to such Securityholder by the
Paying Agent promptly upon the later of (a) the first Business Day following the
Asset Disposition Purchase Date (provided the conditions in this Section 4.7(h)
have been satisfied) and (b) the first Business Day following the time of
delivery of the Security to the Paying Agent at the office of the Paying Agent
by the Holder thereof in the manner required by this Section 4.7(h).
<PAGE>
An Asset Disposition Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Asset Disposition Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Asset Disposition Purchase
Notice was delivered at any time prior to the close of business on the Asset
Disposition Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Asset Disposition Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which written notice of an Asset Disposition
Purchase Offer is delivered to the Trustee, the Company shall cause to be
irrevocably deposited with the Paying Agent, subject to the provisions of
Section 2.4, in cash or Temporary Cash Investments an amount sufficient to pay
the aggregate Asset Disposition Purchase Price, to be held for payment in
accordance with the provisions of this Section.
(i) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.8. Limitation on Transaction with Affiliates. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, conduct any business, enter into or permit to exist any transaction
(including, without limitation, the sale, conveyance, disposition, purchase,
exchange or lease of any property, the lending the borrowing or advancing of any
money or the rendering of any services) with, or for the benefit of, any
Affiliate of the Company (an "Affiliate Transaction") unless (i) the terms of
such Affiliate Transaction are set forth in writing, (ii) such Affiliate
Transaction is in the best interest of the Company or such Restricted
Subsidiary, as the case may be, (iii) such Affiliate Transaction is on terms as
favorable to the Company or such Restricted Subsidiary, as the case may be, as
those that could be obtained at the time of such Affiliate Transaction for a
similar transaction in arm's length dealings with a Person who is not such an
Affiliate and (iv) with respect to each Affiliate Transaction involving
aggregate payments or value in excess of $500,000, the Company delivers to the
Trustee an Officers' Certificate certifying that such Affiliate Transaction was
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, as evidenced by a Board
Resolution, and that such Affiliate Transaction complies with clauses (ii) and
(iii), such Board Resolution to be dated within 30 days of such Affiliate
Transaction.
<PAGE>
(b) The provisions of Section 4.8(a) shall not prohibit (i) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors, (ii) loans or advances
permitted under this Indenture to employees in the ordinary course of business
in accordance with past practices of the Company, (iii) the payment of
reasonable fees to directors of the Company and its Restricted Subsidiaries who
are not employees of the Company or of Restricted Subsidiaries, (iv) any
transaction between the Company and a Wholly Owned Subsidiary or between Wholly
Owned Subsidiaries or (v) reasonable and customary indemnification arrangements
between the Company or any Restricted Subsidiary and their respective directors
and officers pursuant to which the Company or any such Restricted Subsidiary
agrees to indemnify such directors and officers against losses and expenses
incurred by such directors and officers in connection with their service to the
Company or such Restricted Subsidiary, as the case may be (to the extent that
such indemnification arrangements are permitted under applicable law).
SECTION 4.9. Change of Control. (a) Upon a Change of Control, (i) the
Company shall notify the Trustee, who shall in turn notify the Holders, in
writing of the occurrence of the Change of Control and shall make an offer to
purchase (the "Change of Control Offer") the Securities for cash at a purchase
price equal to 100% of the principal amount thereof plus any accrued and unpaid
interest thereon (collectively the "Change of Control Purchase Price") to the
Change of Control Purchase Date (as defined below) on or before the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 Business Days after the occurrence of the Change of Control (the
"Change of Control Purchase Date"), (ii) the Company shall mail a copy of the
Change of Control Offer to each Holder and (iii) the Company shall cause a
notice of the Change of Control Offer to be sent at least once to the Dow Jones
News Service and The Bloomberg Business News Service or, if such news services
no longer publish such notices, a similar business news service in the United
States. The Change of Control Offer shall remain open from the time such offer
is made until the Change of Control Purchase Date. The Company shall purchase
all Securities properly tendered in the Change of Control Offer and not
withdrawn in accordance with the procedures set forth in Section 4.9(b). The
Trustee shall be under no obligation to ascertain, and the Trustee shall not be
deemed to have knowledge of, the occurrence of a Change of Control or to give
notice with respect thereto other than as provided above upon receipt of a
Change of Control Offer from the Company. The Trustee may conclusively assume,
in the absence of receipt of a Change of Control Offer from the Company, that no
Change of Control has occurred. The Change of Control Offer shall include a form
of change of control purchase notice (the "Change of Control Purchase Notice")
to be completed by the Holder and shall state:
(1) the events causing a Change of Control and the date such Change of
Control is deemed to have occurred;
<PAGE>
(2) the circumstances and relevant facts regarding such Change of
Control which the Company in good faith believes will enable Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, (ii) a description of material
business developments in the Company's business subsequent to the date of
the latest of such Reports and (iii) information with respect to pro forma
historical income, cash flow and capitalization, each after giving effect
to such Change of Control, events causing such Change of Control and the
date such Change of Control is deemed to have occurred);
(3) that the Change of Control Offer is being made pursuant to this
Section 4.9(a) and that all Securities properly tendered pursuant to the
Change of Control Offer will be accepted for payment;
(4) the date by which the Change of Control Purchase Notice pursuant
to this Section 4.9 must be given;
(5) the Change of Control Purchase Date;
(6) the Change of Control Purchase Price;
(7) the name and address of the Paying Agent;
(8) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(9) that the Change of Control Purchase Price for any Security as to
which a Change of Control Purchase Notice has been duly given and not
withdrawn will be paid promptly upon the later of the first Business Day
following the Change of Control Purchase Date and the time of surrender of
such Security as described in clause (8);
(10) the procedure the Securityholder must follow to accept the Change
of Control Offer; and
(11) the procedures for withdrawing a Change of Control Purchase
Notice.
(b) A Securityholder may accept a Change of Control Offer by delivering to
the Paying Agent at the office of the Paying Agent a Change of Control Purchase
Notice at any time prior to the close of business in the location of the office
of the Paying Agent on the Change of Control Purchase Date, stating:
(1) that such Securityholder elects to have a Security purchased
pursuant to the Change of Control Offer;
(2) the principal amount of the Security that the Securityholder
elects to have purchased by the Company, which amount must be $1,000 or an
integral multiple thereof, and the certificate numbers of the Securities to
be delivered by such Securityholder for purchase by the Company; and
<PAGE>
(3) that such Security shall be purchased on the Change of Control
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary endorsements) to
the Paying Agent at the office of the Paying Agent prior to, on or after the
Change of Control Purchase Date shall be a condition to the receipt by the
Securityholder of the Change of Control Purchase Price therefor; provided, that
such Change of Control Purchase Price shall be so paid pursuant to this Section
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change of Control
Purchase Notice. Securityholders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to be unpurchased
portion of the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to this
Section, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the Purchase of all of a Security also apply to the Purchase of a
portion of such Security.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change of Control Purchase Notice or written notice of withdrawal thereof.
Upon receipt by the Company of the Change of Control Purchase Notice, the
Holder of the Security in respect of which such Change of Control Purchase
Notice was given shall (unless such Change of Control Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder
promptly upon the later of (a) the first Business Day following the Change of
Control Purchase Date (provided the conditions in this Section 4.9(b) have been
satisfied) and (b) the first Business Day following the time of delivery of the
Security to the Paying Agent at the office of the Paying Agent by the Holder
thereof in the manner required by this Section 4.9(b).
A Change of Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change of Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Change of Control Purchase
Notice was delivered at any time prior to the close of business on the Change of
Control Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal
is being submitted; and
<PAGE>
(3) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will be
delivered for purchase by the Company.
No later than the date upon which the Change of Control Offer is delivered
to the Trustee, the Company shall irrevocably deposit with the Paying Agent,
subject to the provisions of Section 2.4, in cash or Temporary Cash Investments
an amount equal to the Change of Control Purchase Price to the Holders entitled
thereto, to be held for payment in accordance with the provisions of this
Section.
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.10. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA section 314(a)(4).
SECTION 4.11. Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.12. Limitation on Liens and Impairment of Collateral. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create or permit to exist any Lien on any of its property or
assets (including Capital Stock), whether owned on the Issue Date or thereafter
acquired, or any right, title or interest thereto, other than Permitted Liens.
(b) Except as permitted by this Indenture or any of the other Collateral
Documents, the Company shall not, and the Company shall not permit any of its
Subsidiaries to, directly or indirectly, (i) take or omit to take any action
which might or would have the result of adversely affecting or impairing the
perfected first priority Lien of the Indenture and the other Collateral
Documents with respect to the Collateral or any right, title or interest thereto
or (ii) grant to any Person any interest in, or right, title or interest to, the
Collateral, other than, in each case, Permitted Liens.
<PAGE>
SECTION 4.13. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company shall not permit (i) any Restricted
Subsidiary to issue any Capital Stock other than to the Company or a Wholly
Owned Subsidiary; or (ii) any Person (other than the Company or a Wholly Owned
Subsidiary) to, directly or indirectly, own or control any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares); provided,
however, that clauses (i) and (ii) shall not prohibit (a) any sale of 100% of
the shares of the Capital Stock of any Restricted Subsidiary owned by the
Company or any Wholly Owned Subsidiary effected in accordance with Section 4.7,
(b) any Person from owning any of the Pledged Securities subsequent to any
foreclosure on or other transfer of such Pledged Securities in connection with
an exercise of remedies under any of the Collateral Documents or (c) any
issuance of Preferred Stock of a Restricted Subsidiary to any Person permitted
under Section 4.4.
SECTION 4.14. Restricted and Unrestricted Subsidiaries. The Board of
Directors may designate any Subsidiary of the Company or any Restricted
Subsidiary to be an Unrestricted Subsidiary if (i) the Subsidiary to be so
designated does not own any Capital Stock, Redeemable Stock or Indebtedness of,
or own or hold any Lien on any property or assets of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
by any Indebtedness or Lien that, if in default, would result (with the passage
of time or notice or otherwise) in a default on any Indebtedness of the Company
or any Restricted Subsidiary, and (iii) either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) such designation is
effective immediately upon such Person becoming a Subsidiary of the Company or
of a Restricted Subsidiary. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company or any Restricted Subsidiary
shall be classified as a Restricted Subsidiary. Except as provided in the first
sentence of this paragraph (a), no Restricted Subsidiary shall be redesignated
as an Unrestricted Subsidiary. An Unrestricted Subsidiary shall not be
redesignated as a Restricted Subsidiary. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing provisions.
SECTION 4.15. After-Acquired Property. The Company shall, and shall cause
each Restricted Subsidiary to, cause all property (real and personal, including,
without limitation, Pledged Securities) and assets that are acquired by the
Company or such Restricted Subsidiary after the Issue Date to be subject to the
Lien of the Indenture and the other Collateral Documents, in the case of such
property that is not Substitute Collateral, within 60 days after the date of
acquisition thereof.
SECTION 4.16. Revisions to Schedules. (a) Schedule III shall be revised
from time to time by the Company to accurately reflect all the U.S. Restricted
Subsidiaries, whether now existing or hereafter created, formed, designated or
acquired, and upon such revision a new Schedule III shall be delivered to the
Trustee.
<PAGE>
(b) Schedule IV and Schedule V shall be revised from time to time by the
Company to reflect all governmental, regulatory and other offices where filings,
recordings, registrations and other actions necessary or advisable to publish
notice of the, to perfect, preserve and protect the validity of the, and to
establish a valid and perfected, Lien in favor of the Trustee in respect of all
Collateral, and upon such revision a new Schedule IV or Schedule V, as the case
may be, shall be delivered to the Trustee.
SECTION 4.17. Maintenance of Properties; Insurance. The Company shall, and
shall cause each Restricted Subsidiary to, at all times maintain or cause to be
maintained insurance in accordance with the provisions of the Collateral
Documents and to maintain or cause to be maintained its properties and assets in
accordance with the provisions of the Collateral Documents and to:
(a) keep all property necessary in its business, including, without
limitation, the Collateral, in good working order and condition (ordinary
wear and tear excepted), in compliance with applicable regulations, laws or
restrictions and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so its business may be properly and advantageously conducted at
all times; and
(b) maintain with recognized national or international insurance
companies, or through self-insurance programs, insurance on such of its
property and assets, including, without limitation, the Collateral, and
against such liabilities in at least such amounts, against at least such
risks and with such deductibles or self-insured retentions as in each case
are customarily insured against in the same general area by companies
engaged in the same or a similar business and consistent with the past
practices of the Company, and furnish to the Trustee an Officers'
Certificate specifying the nature of the insurance carried and adequacy
thereof at such times as it shall deliver to the Trustee an Officers'
Certificate pursuant to Section 4.10.
SECTION 4.18. Corporate Existence. Subject to Article 5, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), registrations, licenses and franchises of the Company
and such Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license, registration or franchise, or the
corporate, partnership or other existence of any such Subsidiary, if the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole, and the loss thereof is not
adverse in any material respect to the Holders; provided, further, however, that
if such Subsidiary has more than a de minimis amount of assets, the Board of
Directors shall be required to make a determination to the foregoing effect.
<PAGE>
SECTION 4.19. Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay, prior to delinquency, all taxes, assessments and
governmental levies, except as the same are being contested in good faith and by
appropriate proceedings or where the failure to pay would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.
SECTION 4.20. Conflicting Agreements. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any agreement or instrument that
by its terms expressly (i) prohibits the Company from making any payments on the
Securities required by the terms hereof and thereof or (ii) except in respect of
a Permitted Lien, requires that the proceeds received from the sale of any
Collateral be applied to repay, redeem or otherwise retire any Debt of any
person other than the Debt represented by the Securities, except as set forth in
the Collateral Documents.
SECTION 4.21. Capital Expenditures. The total amount of capital
expenditures made by the Company for plant, property and equipment and
acquisitions of assets or capital stock of a business or businesses (excluding
reinvestments in Replacement Collateral pursuant to Section 4.7(b)) and
Investments in joint ventures shall not exceed in any Fiscal Year of the Company
the sum of (i) $15,000,000, (ii) an amount equal to the amount of Subordinated
Indebtedness incurred during such Fiscal Year in connection with acquisitions of
assets or capital stock of a business or businesses pursuant to Section
4.3(b)(vii) and (iii) an amount equal to the amount of Capital Stock (other than
Disqualified Stock) of the Company issued during such Fiscal Year in connection
with acquisitions of assets or capital stock of a business or businesses.
If the aggregate capital expenditures made by the Company in any Fiscal
Year is less than the amount permitted in this Section 4.21, the difference
between such amount permitted and the capital expenditures actually made may be
carried forward into the next Fiscal Year.
SECTION 4.22. Interest Coverage Ratio. The Company shall not permit the
Consolidated Coverage Ratio, for any twelve-month period ending on the last day
of each fiscal quarter set forth below, to be less than the ratio set forth
below opposite such period:
Twelve-Month Period Ending on Last Day of Fiscal Quarter Ending Minimum Ratio
- - --------------------------------------------------------------- -------------
September 30, 1996........................................... 1.500:1
December 31, 1996............................................ 1.525:1
March 31, 1997............................................... 1.550:1
June 30, 1997................................................ 1.575:1
September 30, 1997........................................... 1.600:1
December 31, 1997............................................ 1.625:1
March 31, 1998............................................... 1.650:1
June 30, 1998................................................ 1.675:1
September 30, 1998........................................... 1.700:1
December 31, 1998............................................ 1.725:1
March 31, 1999............................................... 1.750:1
June 30, 1999................................................ 1.775:1
September 30, 1999........................................... 1.800:1
<PAGE>
ARTICLE 5
Successor Company
-----------------
The Company shall not, and the Company shall not permit any Restricted
Subsidiary to, enter into any transaction or series of transactions to
consolidate, amalgamate or merge with or into any other Person (other than the
merger of a Wholly Owned Subsidiary (i) with another Wholly Owned Subsidiary or
(ii) into the Company), or directly or indirectly through its Subsidiaries sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
its property and assets to any Person (other than to one or more Wholly Owned
Subsidiaries or to the Company) unless (i) if the Company is a party to such
transaction and is not the surviving entity (the "Surviving Entity"), the Person
formed by such consolidation or amalgamation or into which the Company is merged
or that acquires, by sale, conveyance, assignment, transfer, lease or other
disposition, all or substantially all the properties and assets of the Company
as an entirety, shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District or Columbia and
shall expressly assume (a) by a supplemental indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations of the
Company pursuant to the Securities and the Indenture and (b) by written
instruments executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company pursuant to the other Collateral
Documents; (ii) the Surviving Entity, if any Restricted Subsidiary is a party to
such transaction and is not the Surviving Entity, shall by written instruments
executed and delivered to the Trustee, in form satisfactory to the Trustee,
expressly assume all the obligations of such Restricted Subsidiary pursuant to
the Collateral Documents; (iii) immediately before and after giving effect to
such transaction or series of transactions on a pro forma basis (and treating
any Indebtedness which becomes an obligation of the Company, the Surviving
Entity or any Restricted Subsidiary as a result of such transaction or series of
transactions as having been incurred by the Company, such Surviving Entity or
such Restricted Subsidiary at the time of such transaction or series of
transactions) no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction or series
of transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Company, the Surviving Entity or any Restricted
Subsidiary as a result of such transaction or series of transactions as having
been incurred by the Company, such Surviving Entity or such Restricted
Subsidiary at the time of such transaction or series of transactions), the
Company or the Surviving Entity, as the case may be, shall have a Consolidated
Tangible Net Worth which is not less than the Consolidated Tangible Net Worth of
the Company immediately prior to such transaction or transactions; and (v) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating (A) that such consolidation, amalgamation,
merger or transfer and such supplemental indenture (if any) and written
instrument (if any) comply with this Indenture, (B) that upon execution and
delivery of such supplemental indenture or written instrument the Company or
such Surviving Entity shall be bound by the terms of this Indenture as thereby
amended and this Indenture as thereby amended shall be enforceable against the
Company or such Successor Entity in accordance with its terms, and (C) that the
perfected first priority Lien of the Trustee for the benefit of the
Securityholders with respect to the Collateral continues in all respects.
<PAGE>
Upon any transaction involving the Company in which the Company is not the
Surviving Entity, such Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the Company in the case of a transfer or lease shall not be
released from the obligation to pay the principal of, and premium, if any, or
interest on, the Securities.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company fails to make any payment of interest on any Security
when the same shall become due and payable, and such failure continues for
a period of 30 days;
(2) the Company (i) fails to make the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
its Stated Maturity, upon acceleration, redemption or declaration, or
otherwise or (ii) fails to redeem or purchase Securities when and to the
extent required pursuant to this Indenture or the Securities;
(3) the Company fails to comply with Article 5;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5, 4.6,
4.7, 4.8, 4.9, 4.12, 4.13, 4.20, 4.21 or 4.22 (other than a failure to
purchase Securities when required under Section 4.7 or 4.9) and such
failure continues for 30 days after the notice specified below, or the
Company fails to give the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for a period of 60 days after the
notice specified below or the Company fails to give the notice specified
below;
(6) Principal of or interest on any Indebtedness of the Company or any
Restricted Subsidiary for borrowed money is not paid when due within any
applicable grace period or any Indebtedness of the Company or any
Restricted Subsidiary is accelerated by the holders thereof, in each case,
if the total amount so unpaid when due within any applicable grace period
or accelerated exceeds $5,000,000 or its Dollar Equivalent at the time;
(7) (A) the Company fails to comply with any of its representations,
warranties, covenants or agreements contained or incorporated by reference
in any Collateral Document (other than the Indenture) and such failure
continues beyond the applicable grace period provided in such Collateral
Document;
<PAGE>
(B) on or after the Issue Date, other than in accordance with the
provisions of the Indenture, for any reason, other than the
satisfaction in full and discharge of all obligations secured thereby,
any Collateral Document ceases to be or is not in full force and
effect or any Lien with respect to Collateral with a Fair Market Value
that exceeds $500,000 in the aggregate intended to be created by any
Collateral Document ceases to be or is not a valid and perfected first
priority Lien for more than 5 days;
(C) the occurrence of any event of default under any Collateral
Document; or
(D) on or after the Issue Date, other than in accordance with the
provisions of the Indenture, the Company asserts in writing that any
Collateral Document has ceased to be or is not in full force and
effect;
(8) one or more judgments or decrees aggregating in excess of
$5,000,000 or its Dollar Equivalent at the time is rendered against the
Company or any Restricted Subsidiary and is not discharged and either: (A)
an enforcement proceeding has been commenced by any creditor upon such
judgment or decree; or (B) there is a period of 60 days following the entry
of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed;
(9) the Company or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency; or
(10) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
<PAGE>
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (4), (5), (6) or (8) above, its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.1(9) or (10) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in principal amount of the Securities by notice to the Trustee (who
shall promptly notify the Company), may declare the principal of and accrued
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.1(9) or (10) occurs, the principal of and
interest on all the Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Securityholders. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
<PAGE>
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal (other than principal due by
reason of acceleration) of or interest on a Security or (ii) a Default or Event
of Default in respect of a provision that under Section 9.2 cannot be amended or
waived without the consent of each Securityholder affected. When a Default or
Event of Default is waived, it is deemed cured, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any consequent
right.
SECTION 6.5. Control by Majority. The Holders of a majority in principal
amount of the Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or by exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law, this Indenture or the other Collateral
Documents or, subject to Section 7.1, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
<PAGE>
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, 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 6.8. Collection Suit by Trustee. If an Event of Default in payment
of interest or principal specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. 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 and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities
for interest;
<PAGE>
THIRD: to the Securityholders for amounts due and unpaid on the
Securities for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities
for principal; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully refrain from doing so) shall 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 wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 6.13. Suits To Protect the Collateral. The Trustee shall have power
to institute and to maintain such proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of this Indenture or the other Collateral Documents and to protect its
interests and the interests of the Securityholders in the Collateral, including
power to institute and maintain proceedings to restrain the enforcement of or
compliance with any governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order would impair the Lien of this Indenture and the
other Collateral Documents or be prejudicial to the interests of the Holders or
the Trustee. The Trustee shall also have the authority to exercise any rights or
powers conferred on the Trustee under this Indenture and under each other
Collateral Document.
<PAGE>
ARTICLE 7
Trustee
-------
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise 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
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(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; (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 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) 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.
(f) 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 otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
<PAGE>
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely and shall be
protected in acting or in refraining from acting 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, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled, upon
reasonable notice to the Company, to examine the books, records and premises of
the Company, personally or by agent or attorney and to consult with the officers
and representatives of the Company, including the Company's accountants and
attorneys.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or discretion of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
may be incurred by it in compliance with such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
<PAGE>
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or
the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in the Indenture or in any document issued in connection with the
sale of the Securities or in the Securities other than the Trustee's certificate
of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), 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 interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA section
313(a), as promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 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 Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as shall be agreed to in writing
between the Company and the Trustee for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
sale or otherwise in connection with this Indenture and the other Collateral
Documents, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts and court costs. The
Company shall indemnify the Trustee, its officers, directors, employees and
agents against any and all loss, liability damage, claim or expense (including
reasonable attorneys' fees and expenses), including taxes (other than taxes
based on the income of the Trustee) incurred by it in connection with the
acceptance or administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
<PAGE>
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on Securities under Article 8 or otherwise.
The Company's payment obligations pursuant to this Section and the
Trustee's Lien shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.1(9) or
(10) with respect to the Company, the expenses are intended to constitute
expenses of administration under Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time by
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
25% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
<PAGE>
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA ss. 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. No obligor upon the Securities or Person
directly controlling, controlled by or under common control with such obligor
shall serve as Trustee upon the Securities. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b) (1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA ss.
310(b) (1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
SECTION 7.12. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Collateral may at the time be located, the Company and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more persons approved by the Trustee to act as co-trustee or
co-trustee, jointly with the Trustee, of all or any part of the Collateral, or
separate trustee or separate trustees of any part of the Collateral, and to vest
in such person or persons, in such capacity and for the benefit of the Holders,
such title to the Collateral, or any part thereof, and, subject to the other
provisions of this Section 7.12, such powers, duties, obligations, rights and
trusts as the Company and the Trustee may consider necessary or desirable
hereunder or under any other Collateral Document. If the Company shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. The
Company hereby appoints the Trustee as its agent and attorney to act for it
under the foregoing provisions of this Section in either of such contingencies.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility under Section 7.10 and no notice to Holders of the appointment of
any cotrustee or separate trustee shall be required under Section 7.8.
<PAGE>
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee hereunder or under any Collateral Document shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or cotrustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or under any Collateral Document) the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Company and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and, to the extent
applicable, the Collateral Documents. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture and, to the extent applicable, the Collateral Documents,
specifically including every provision hereof and thereof relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee and a copy thereof given
to the Company.
<PAGE>
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture and, to the extent applicable, the Collateral Documents, on its behalf
and in its name. If any separate trustee or co-trustee shall become incapable of
acting, resign or be removed, all its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
ARTICLE 8
Discharge of Indenture
----------------------
SECTION 8.1. Discharge of Liability on Securities. (a) When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.9) for cancellation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as a result of
the mailing of a notice of redemption pursuant to Article 3 hereof, and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.9), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(b) and 8.5, cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(b) Notwithstanding clause (a), the Company's obligations in Sections 2.3,
2.4, 2.5, 2.6, 2.9, 7.7, 7.8, 8.3, 8.4 and 8.5 shall survive until the
Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.3, 8.4 and 8.5 shall survive.
SECTION 8.2. Application of Trust Money. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
SECTION 8.3. Repayment to Company. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee and the Paying Agent before being
required to make any payment may, but need not, 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 paid to the Company. After payment
to the Company, Securityholders entitled to the money must look to the Company
for payment as general creditors.
<PAGE>
SECTION 8.4. Indemnity for Government Obligations. The Company shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.5. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
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
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8.
ARTICLE 9
Amendments and Waivers
----------------------
SECTION 9.1. Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to establish or maintain the Lien of this Indenture and the other
Collateral Documents as a perfected first priority Lien of the Trustee in
respect of the Collateral, to correct or amplify the description of any
Collateral subject to the Lien of the Indenture or the other Collateral
Documents and to subject additional property or assets to the Lien of this
Indenture or the other Collateral Documents;
(5) to add Guarantees with respect to the Securities or to further
secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to enter into any Intercreditor Agreement (as defined in the
Security and Pledge Agreement);
<PAGE>
(8) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(9) to provide for the acceptance of appointment hereunder by a
successor Trustee; or
(10) to make any change that does not adversely affect the rights of
any Securityholder.
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section 9.1.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company and the Trustee may amend
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount of
the Securities. In addition, the Holders of at least a majority in principal
amount of the Securities by written notice to the Trustee may waive future
compliance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment or waiver may not:
(1) reduce the percentage of principal amount of Securities whose
Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) change the time at which any Security may or shall be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
<PAGE>
(6) impair the right of any Securityholder to institute suit for
enforcement of any payment on or with respect to any Security;
(7) permit the creation of any Lien on the Collateral or any part
thereof (other than the Lien of this Indenture and the other Collateral
Documents and other Permitted Liens (as defined herein on the Issue Date))
or terminate the Lien of this Indenture and the other Collateral Documents
as to the Collateral or any part thereof or deprive the Securityholders of
the security afforded by the Lien of this Indenture and the other
Collateral Documents or any part thereof, except as permitted pursuant to
Section 4.12 or Article 10 as in effect on the Issue Date; or
make any change in Section 6.4 or 6.7 or the second sentence of this Section
which adversely affects the rights of any Securityholder. It shall not be
necessary for the consent of the Holders under this Section to approve the
particular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such amendment
or waiver. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment or waiver under
this Section.
SECTION 9.3. Compliance with Trust. Indenture Act Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Holder of a Security shall bind the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
or waiver is not made on the Security. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder's Security or portion
of the Security if the Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
<PAGE>
SECTION 9.5. Notation on or Exchange of Securities. If an amendment changes
the terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. The Trustee at the written direction of the Company
shall place an appropriate notation on the Security regarding the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that (i) such
amendment is authorized or permitted by this Indenture and that all conditions
precedent to the execution, delivery and performance of such amendment have been
satisfied; and (ii) the Indenture together with such amendment complies with the
TIA.
SECTION 9.7. Payment for Consent. Neither the Company nor any Affiliate of
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Collateral Documents
--------------------
SECTION 10.1. Collateral Documents. (a) In order to secure the due and
punctual payment of the principal of and interest on the Securities when the
same becomes due and payable, whether at Stated Maturity, upon acceleration,
optional redemption, required purchase or otherwise, in accordance with the
terms of the Securities and this Indenture, the Company has created the Lien of
this Indenture and the Collateral Documents in respect of the Collateral in
favor of the Trustee for the benefit of the Securityholders. The Trustee and the
Company hereby agree that the Trustee holds the Collateral in trust for the
benefit of the Holders pursuant to the terms hereof and of the other Collateral
Documents.
(b) The Company covenants and agrees that it has full right, power and
lawful authority to grant, bargain, sell, release, convey, hypothecate, assign,
mortgage, pledge and transfer the Collateral, in the manner and form done, or
intended to be done, in this Indenture and the other Collateral Documents, free
and clear of all Liens (other than Permitted Liens or as permitted by the
Collateral Documents, subject to the limitations contained therein), whatsoever,
and that (i) it will forever warrant and defend the title to the same against
the claims of all persons whatsoever, (ii) it will execute, acknowledge and
deliver to the Trustee such further assignments, transfers, assurances or other
instruments as the Trustee may require or request and (iii) it will do or cause
to be done all such acts and things as may be necessary or proper, or as may be
required by the Trustee, to assure and confirm to the Trustee the Lien of this
Indenture and the Collateral Documents in respect of the Collateral, or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Securities. The
Company further covenants and agrees that this Indenture, the other Collateral
Documents and the actions taken hereunder and thereunder create a perfected
first priority Lien on the relevant portion of the Collateral, subject to
Permitted Liens.
<PAGE>
(c) As amongst the Holders, the Collateral as now or hereafter constituted
shall be held for the equal and ratable benefit of the Holders without
preference, priority or distinction of any thereof over any other by reason of
difference in time of issuance, sale or otherwise, as security for the
obligations hereunder and under the other Collateral Documents.
SECTION 10.2. General Authority. The Company hereby irrevocably appoints
the Trustee its true and lawful attorney, with full power of substitution, in
the name of the Company, the Trustee, the Holders or otherwise, for the sole use
and benefit of the Trustee and the Holders, but at the Company's expense, to the
extent permitted by law to exercise, at any time and from time to time while an
Event of Default has occurred and is continuing, all or any of the following
powers and the powers contemplated by the Collateral Documents with respect to
all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof;
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto; and
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof, as fully and effectually as if the Trustee were
the absolute owner thereof;
provided, that the Trustee shall give the Company not less than 10 days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral. The Company agrees that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the Uniform
Commercial Code and for all other purposes. Each Holder, by its acceptance of a
Security, consents and agrees to the terms of the Collateral Documents and
authorizes and directs the Trustee to enter into each of the Collateral
Documents and to perform its obligations and exercise its rights thereunder in
accordance therewith; provided, however, that, if any provision of the
Collateral Documents limits, qualifies or conflicts with the duties imposed by
the provisions of the TIA, the TIA controls.
<PAGE>
SECTION 10.3. Recording, Deposit of Pledged Securities, etc. (a) The
Company will take or cause to be taken, at its own expense, all action required
or desirable to maintain, preserve and protect the Lien on the Collateral
granted by the Collateral Documents, including, but not limited to, causing all
financing statements, Mortgages and other instruments of further assurance,
including continuation statements covering security interests in personal
property, to be promptly recorded, registered and filed, and at all times to be
kept recorded, registered and filed, and shall execute and file such financing
statements and cause to be issued and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve and
protect the rights of the Holders and the Trustee under this Indenture and the
other Collateral Documents to all property comprising the Collateral.
The Company shall from time to time promptly pay and discharge all mortgage
and financing and continuation statement recording and filing fees, charges and
taxes relating to this Indenture and the other Collateral Documents, any
amendments thereto and any other instruments of further assurance.
Upon the cancellation and discharge of any prior Lien, the Company will
cause all cash, Temporary Cash Investments, obligations and securities then held
by the trustee, mortgagee or other holder of such prior Lien, which were
received by such trustee, mortgagee or other holder on account of the release or
the taking by eminent domain or the purchase by a public authority or the sale
by virtue of a designation or order of a public authority or any other
disposition of, or insurance on, the Collateral, or any part thereof (including
all proceeds of or substitutions for any thereof), to be paid to or deposited
and pledged with the Trustee, such cash to be held and paid over or applied by
the Trustee, as provided in Article 11 hereof.
(b) As and when any Pledged Securities shall come into the possession of
the Company or any U.S. Restricted Subsidiary or under any of their control, the
Company shall forthwith deposit and pledge, or cause such U.S. Restricted
Subsidiary to deposit and pledge, the same with the Trustee, together with such
proper instruments of assignment and transfer as the Trustee may reasonably
require, which shall include express authority to the Trustee to vote any shares
of stock included therein and to cause such authority to be recorded in the
entry of transfer of such stock on the books of the corporation issuing the
same, all the foregoing to the extent provided or permitted by the Security and
Pledge Agreement. Such Pledged Securities will likewise be deemed to be a part
of and governed by the terms of the Security and Pledge Agreement.
(c) The Company shall furnish to the Trustee:
(i) at the time of execution and delivery of this Indenture, an
Opinion or Opinions of Counsel substantially in the form of Exhibit D;
(ii) with respect to each Mortgage, a policy of title insurance
insuring (or committing to insure) the Lien of such Mortgage as a valid
first mortgage Lien on the real property and fixtures described therein in
an amount not less than the Fair Market Value thereof, which policy shall
(a) be issued by a reputable title company, (b) include such reinsurance
arrangements, if any (with provisions for direct access), as shall be
customary in the same general area, (c) have been supplemented by such
endorsements or, where such endorsements are not available at commercially
reasonable premium costs, opinion letters of reputable architects or other
reputable professionals (including endorsements or opinion letters on
matters relating to contiguity, first loss, if available, leasehold,
variable rate, usury, if available, and so-called comprehensive coverage
over covenants and restrictions, if available) and (d) contain only such
exceptions to title as shall be customary;
<PAGE>
(iii) certified checks payable to the appropriate public officials or
title company (or checks or wire transfers to the title company in respect
of such amounts) in payment of all mortgage, recording, documentary,
intangible or similar governmental charges due in respect of the execution,
delivery or recording of such Mortgages, together with a check or wire
transfer for the title company in payment of its premium, search and
examination charges, survey costs and any other amounts due in connection
with issuance of its policies (or commitments); and
(iv) within 30 days after each anniversary of the Issue Date, an
Opinion or Opinions of Counsel, dated as of such date, either (a) to the
effect that, in the opinion of such counsel, such action has been taken
with respect to the recordings, registerings, filings, rerecordings,
reregisterings and refilings of all financing statements, continuation
statements or other instruments of further assurance as is necessary to
maintain the first priority Lien of this Indenture and each of the other
Collateral Documents and reciting with respect to such perfected first
priority Lien the details of such action or referring to prior Opinions of
Counsel in which such details are given, and stating that all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the rights of the Holders and
the Trustee hereunder and under each of the other Collateral Documents or
(b) to the effect that, in the opinion of such counsel, no such action is
necessary to maintain such perfected first priority Lien.
SECTION 10.4. Release of Collateral; TIA Requirements. (a) Except as
otherwise permitted by Section 10.6, the Trustee shall not release Collateral
from the Lien of this Indenture and the other Collateral Documents unless such
release is in accordance with the provisions of this Section 10.4 and of the
other Collateral Documents. To the extent applicable, the Company shall cause
TIA ss.314(d) relating to the release of property or Liens to be complied with.
Any certificate or opinion required by TIA ss. 314(d) may be made by an officer
of the Company, except in cases which TIA ss. 314(d) requires that such
certificate or opinion be made by an independent person.
(b) The release of any Collateral from the terms hereof and of any of the
other Collateral Documents or the release of, in whole or in part, the Liens
created by any of the Collateral Documents, shall not be deemed to impair the
perfected first priority Lien of this Indenture and the other Collateral
Documents in contravention of the provisions hereof if and to the extent the
Collateral or Liens are released pursuant to the applicable Collateral Documents
and pursuant to the terms hereof. The Trustee and each of the Holders
acknowledge that a release of Collateral or Liens strictly in accordance with
the terms of the Collateral Documents and the terms hereof will not be deemed
for any purpose to be an impairment of the Liens in contravention of the terms
of this Indenture.
<PAGE>
SECTION 10.5. Disposition of Collateral Without Trustee Consent. (a)
Notwithstanding the provisions of Sections 4.12, 10.6, 10.7 and 10.8, so long as
no Event of Default shall have occurred and be continuing and the Company
complies with the provisions of Section 10.4, the Company may without any
consent by the Trustee:
(i) sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements, materials or supplies or other similar
property subject to the Lien of this Indenture and the other Collateral
Documents, which may have become worn or obsolete, not exceeding in value
in any one calendar year $2,000,000;
(ii) grant rights-of-way and easements over or in respect of any real
property; provided, that such grant shall not impair the usefulness of such
property in any material respect in the conduct of the Company's business
and shall not be prejudicial to the interests of the Securityholders;
(iii) abandon, terminate, cancel, release or make alterations in or
substitutions of any leases, contracts or rights-of-way subject to the Lien
of this Indenture and the other Collateral Documents; provided, that any
altered or substituted leases, contracts or rights-of-way shall forthwith,
without further action, be subject to the Lien of this Indenture and the
other Collateral Documents to the same extent as those previously existing;
provided, further, that, if the Company shall receive any money or property
in excess of the Company's expenses in connection with such termination,
cancellation, release, alteration or substitution (other than any such
money or property received in connection with a contract or lease
terminated, canceled, released, altered or substituted in the ordinary
course of business) as consideration or compensation for such termination,
cancellation, release, alteration or substitution, such money or property,
if it exceeds $1,000 (in which case all of the money and property so
received and not just the portion in excess of $1,000 shall be subject to
this clause), forthwith upon its receipt by the Company, shall be deposited
with the Trustee (unless otherwise required by a prior Permitted Lien) as
Trust Monies subject to disposition as Net Cash Proceeds as provided in
Section 4.7 and subjected to the Lien of this Indenture and the other
Collateral Documents;
(iv) surrender or modify any franchise, license or permit subject to
the Lien of this Indenture and the other Collateral Documents which it may
own or under which it may be operating; provided, that, if, after the
surrender or modification of any such franchise, license or permit, the
Company shall not be entitled, under some other, or without any, franchise,
license or permit, to conduct its business in the territory in which it is
then operating and the Fair Market Value of such franchise, license or
permit exceeds $5,000,000, then the Board of Directors shall have
determined, in its reasonable opinion, that such territory is not material
to the conduct of the Company's business; provided, further, that, if the
Company shall be entitled to receive any money or property in excess of the
Company's expenses in connection with such surrender or modification (other
than any such money or property received in the ordinary course of business
in connection with a franchise, license or permit surrendered or modified)
as consideration or compensation for such surrender or modification, such
money or property, if it exceeds $1,000 (in which case all the money and
property so received and not just the portion in excess of $1,000 shall be
subject to this clause), forthwith upon its receipt by the Company, shall
be deposited with the Trustee (unless otherwise required by a prior
Permitted Lien) as Trust Monies subject to disposition as provided in
Section 4.7 and subjected to the Lien of this Indenture and the other
Collateral Documents;
<PAGE>
(v) alter, repair, replace, change the location or position of and add
to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; provided, that no change in the location of any such
Collateral subject to the Lien of this Indenture and the other Collateral
Documents shall be made which (1) removes such property into a jurisdiction
in which any instrument required by law to preserve the Lien of this
Indenture and any other Collateral Documents on such property, including
all necessary financing statements and continuation statements, has not
been recorded, registered or filed in the manner required by law to
preserve the Lien of this Indenture and the other Collateral Documents on
such property, (2) does not comply with the terms of this Indenture and the
other Collateral Documents or (3) otherwise impairs the Lien of the
Indenture and the other Collateral Documents;
(vi) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof including any leases but excluding land or interests in
land, if such demolition, dismantling, tearing down, scrapping or
abandonment is in the best interests of the Company and the Fair Market
Value (except to the extent of the relevant Collateral being released) and
utility of the Collateral as an entirety will not thereby be impaired;
(vii) sell or otherwise dispose of other Collateral in isolated
transactions that do not exceed $150,000 per transaction, whether in a
single transaction or a series of related transactions which constitute a
single plan of disposition, and $2,000,000 in the aggregate; or
(viii) designate a Restricted Subsidiary as an Unrestricted
Subsidiary, in accordance with clauses (i), (ii) and (iii)(A) of Section
4.14(a), the effect of which is to release the assets and property of such
Subsidiary from the Lien of this Indenture and the other Collateral
Documents.
(b) In the event that the Company has sold, exchanged or otherwise disposed
of or proposes to sell, exchange or otherwise dispose of any portion of the
Collateral, or designates a Restricted Subsidiary as an unrestricted Subsidiary
as described above, which under the provisions of this Section may be sold,
exchanged, or otherwise disposed of, or so designated, by the Company without
any consent of the Trustee, such Collateral (or, in the case of such
designation, the assets and property of such Subsidiary comprising part of the
Collateral) shall be, upon such sale, exchange, or other disposition or
designation, automatically released from the Lien of this Indenture and the
other Collateral Documents, and the Company may request the Trustee to furnish a
written disclaimer, release or quitclaim of any interest in such Collateral
under this Indenture and any of the other Collateral Documents. If the Company
so requests, the Trustee shall execute such an instrument upon delivery to the
Trustee of (i) an Officers' Certificate by the Company reciting the sale,
exchange or other disposition or designation made or proposed to be made and
describing in reasonable detail the Collateral affected thereby, and stating
that such Collateral is Collateral which by the provisions of this Section may
be sold, exchanged or otherwise disposed of or dealt with by the Company without
any release or consent of the Trustee and (ii) where required by the TIA, an
Opinion of Counsel stating that the sale, exchange or other disposition or
designation made or proposed to be made was duly taken by the Company in
conformity with a designated subsection of Section 10.5(a).
<PAGE>
(c) Any disposition of Collateral made in strict compliance with the
provisions of this Section 10.5 shall be deemed not to impair the Lien of this
Indenture and the other Collateral Documents in contravention of the provisions
of this Indenture.
SECTION 10.6. Disposition of Inventory and Accounts Receivable Without
Release. (a) Notwithstanding the provisions of Section 10.7, the Company may
without any release or consent by the Trustee sell, exchange or otherwise
dispose of inventory in the Ordinary Course of Business, assign, collect,
liquidate, sell, factor or otherwise dispose of accounts receivable in the
Ordinary Course of Business and dispose of the Proceeds thereof in connection
with the Company's business or to make other cash payments permitted by this
Indenture. Notwithstanding the foregoing and the terms of the Security and
Pledge Agreement, the Company's right to rely upon this Section 10.6(a) for each
six-month period beginning on January l and July 1 (a "Six-Month Period") shall
be conditioned upon the Company delivering to the Trustee, within 30 days
following the end of such Six-Month Period, an Officers' Certificate to the
effect that all sales, exchanges or other dispositions of inventory and
collections, liquidations, sales, factoring or other dispositions of accounts
receivable by the Company during such Six-Month Period were reviewed under such
officers' supervision and were determined to be in the Ordinary Course of
Business and that all Proceeds therefrom were used by the Company in connection
with its business or to make other cash payments permitted by this Indenture.
The fair value of all sales, exchanges or other dispositions of inventory and
collections, liquidations, sales, factoring or other dispositions of accounts
receivable and the use of each in connection with the Company's business and to
make cash payments permitted by this Indenture by the Company in accordance with
this Section shall not be considered in determining whether the aggregate fair
value of Collateral released from the Lien of the Indenture in any calendar year
exceeds the 10% threshold specified in TIA ss. 314(d).
(b) In the event that the Company has sold, exchanged or otherwise disposed
of or proposes to sell, exchange or other dispose of any item of inventory and
accounts receivable which under the provisions of this Section may be sold,
exchanged or otherwise disposed of by the Company without any release or consent
of the Trustee, and the Company requests the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under the
Indenture and the other Collateral Documents, the Trustee shall execute such an
instrument upon delivery to the Trustee of (i) an Officers' Certificate reciting
the sale, exchange or other disposition made or proposed to be made, describing
in reasonable detail the property affected thereby, and stating that such
property may be sold, exchanged or otherwise disposed of by the Company without
any release or consent of the Trustee in compliance with the provisions of this
Section and (ii) an Opinion of Counsel to the effect that the sale, exchange or
other disposition made or proposed to be made by the Company is in compliance
with the provisions of this Section.
<PAGE>
(c) Any releases of Collateral made in compliance with the provisions of
this Section shall be deemed not to impair the Lien of the Indenture and other
Collateral Documents in contravention of the provisions of this Indenture.
SECTION 10.7. Release of Collateral with Trustee Consent. In addition to
its rights under Sections 10.5, 10.6 and 10.8, the Company shall have the right,
at any time and from time to time, unless an Event of Default shall have
occurred and be continuing, to sell, exchange or otherwise dispose of any of the
Collateral (other than Trust Monies, which are subject to release from the Lien
of this Indenture and the other Collateral Documents as provided under Article
11 or upon substituting Substitute Collateral therefor as provided in Section
10.8) (a "Release Termination"), upon compliance with the requirements and
conditions of Section 4.7, this Section and Section 10.4 and the Trustee shall
release the same from the Lien of this Indenture and any of the other Collateral
Documents upon receipt by the Trustee of a Release Notice (as defined herein)
requesting such release and describing the property to be so released; provided,
that:
(a) If the Collateral to be released has a book value of at least
$3,000,000, the Trustee is provided with a Board Resolution requesting such
release and authorizing an application to the Trustee therefor.
(b) The security afforded by this Indenture and the other Collateral
Documents will not be impaired by such release in contravention of the
provisions of this Indenture and other Collateral Documents, and either (i)
other property is to be substituted as Substitute Collateral in accordance
with Section 10.8 or (ii) the proceeds from the property to be released are
being deposited in accordance with Section 4.7.
(c) The Company has disposed of or will dispose of the Collateral so
to be released for a consideration representing its Fair Market Value.
(d) No Event of Default has occurred and is continuing (or will result
therefrom).
(e) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release and the release of the Lien
of any applicable Mortgage with respect thereto, the nonreleased mortgaged
property shall have sufficient utility services and sufficient access to
public roads, rail spurs, harbors, canals, terminals and other
transportation structures for the continued use of such mortgaged property
in substantially the manner carried on by the Company and its Subsidiaries
prior to such release.
<PAGE>
(f) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release, the nonreleased mortgaged
property shall comply in all material respect with applicable laws, rules,
regulations and ordinances relating to land use and building and workplace
safety.
(g) If the Collateral to be released is only a portion of a discrete
parcel of real property, following such release, the Fair Market Value of
the mortgaged property (exclusive of the Fair Market Value of the released
mortgaged property) shall not be less than the Fair Market Value of such
mortgaged property prior to such release.
(h) If the Collateral to be released is only a portion of a discrete
parcel of real property, the Company shall have delivered to the Trustee a
survey depicting the real property to be released.
(i) The first priority perfected Lien pursuant to the Collateral
Documents shall be in full force and effect continuously and uninterrupted
at all times.
(j) If the Collateral so to be released is subject to a prior
Permitted Lien, there shall be delivered to the Trustee a certificate of
the trustee, mortgagee or other holder of such prior Permitted Lien that it
has received the applicable Net Cash Proceeds (except to the extent that
the assignment thereof would violate the terms thereof or any agreement
relating thereto) and has been irrevocably authorized by the Company to pay
over to the Trustee any balance of such Net Cash Proceeds remaining after
the discharge of such Indebtedness secured by such prior Permitted Lien;
and if any property other than cash, Temporary Cash Investments or other
obligations is included in the consideration for any Collateral to be
released, there shall be delivered to the Trustee such instruments of
conveyance, assignment and transfer, if any, as may be reasonably
necessary, in the Opinion of Counsel to be given pursuant to paragraph (l),
to subject to the Lien of this Indenture and the other Collateral Documents
all the right, title and interest of the Company in and to such Collateral.
(k) If the Collateral to be released is only a portion of a discrete
parcel of real property, there shall be delivered to the Trustee evidence
that a title company shall have committed to issue an endorsement to the
title insurance policy relating to the nonreleased mortgaged property
confirming that, after such release, the Lien of the applicable Mortgage
continues unimpaired as a first priority perfected Lien upon the remaining
mortgaged property.
(l) An Opinion of Counsel shall be delivered to the Trustee
substantially to the effect (subject to customary exceptions) (i) that any
obligation included in the consideration for any property so to be released
and to be received by the Trustee pursuant to Section 10.7(j) is a valid
and binding obligation enforceable in accordance with its terms and is
effectively pledged under the Collateral Documents, (ii) that any Lien
granted by a purchaser to secure Purchase Money Indebtedness is a first
priority purchase money Lien and such instrument granting such Lien is
enforceable in accordance with its terms, (iii) either (x) that such
instruments of conveyance, assignment and transfer as have been or are then
delivered to the Trustee are sufficient to subject to the first priority
Lien of this Indenture and the other applicable Collateral Documents all
the right, title and interest of the Company in and to any property, other
than cash, Temporary Cash Investments and obligations, that is included in
the consideration for the Collateral so to be released and is to be
received by the Trustee pursuant to Section 10.7(j) or (y) that no
instruments of conveyance, assignment or transfer are necessary for such
purpose, (iv) that the Company has corporate power to own all property
included in the consideration for such release, (v) in case any part of the
money or obligations referred to in Section 10.7(j) has been deposited with
a trustee or other holder of a prior Permitted Lien, that the Collateral to
be so released, or a specified portion thereof, is or immediately before
such release was subject to such prior Permitted Lien and that such deposit
is required by such prior Permitted Lien and (vi) that the Company has
complied with all conditions precedent herein and under any of the other
Collateral Documents provided for relating to the release of such
Collateral.
<PAGE>
(m) The Company shall deliver to the Trustee an Officers' Certificate,
dated not more than 30 days prior to the date of the application for such
release, with respect to the matters described in subsections (a) through
(k).
In connection with any release, the Company shall (i) execute, deliver and
record or file and obtain such instruments as the Trustee may reasonably
require, including, without limitation, amendments to the Collateral Documents
and this Indenture, and (ii) deliver to the Trustee such evidence of the
satisfaction of the Indenture and the other Collateral Documents as the Trustee
may reasonably require.
The Company shall exercise its rights under this Section by delivery to the
Trustee of a notice (each, a "Release Notice"), which shall refer to this
Section, describe with particularity the items of property proposed to be
covered by the release and be accompanied by a counterpart of the instruments
proposed to give effect to the release fully executed and acknowledged (if
applicable) by all parties thereto other than the Trustee and in form for
execution by the Trustee. Upon such compliance, the Company shall direct the
Trustee to execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 10 Business Days after receipt by the Trustee of a Release
Notice and the satisfaction of the requirements of this covenant.
In case an Event of Default shall have occurred and be continuing, the
Company, while in possession of the Collateral (other than cash, Temporary Cash
Investments, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or under the other Collateral
Documents or with the trustee, mortgagee or other holder of a prior Permitted
Lien), may do any of the things enumerated in this Section, if the Trustee in
its discretion, or the Holders of 66-2/3% in aggregate principal amount of the
Securities outstanding, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under this Section shall omit
the statement to the effect that no Event of Default has occurred and is
continuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.1(1), (2), (3), (9) or
(10).
<PAGE>
All cash or Temporary Cash Investments received by the Trustee pursuant to
this Section shall be held by the Trustee, for the benefit of the
Securityholders, as Trust Monies under Article 11 subject to application as
therein provided or as provided in Section 4.7. All purchase money and other
obligations received by the Trustee pursuant to this Section shall be held by
the Trustee for the benefit of the Holders as Collateral.
Any releases of Collateral made in strict compliance with the provisions of
this Section shall be deemed not to impair the Lien of this Indenture and the
other Collateral Documents in contravention of the provisions of this Indenture.
SECTION 10.8. Substitute Collateral. (a) The Company may, at its option,
obtain a release of any of the Collateral (including any Trust Monies other than
Trust Monies which at such time (i) constitute Excess Proceeds for purposes of
Section 4.7 or (ii) have been deposited with the Paying Agent in an amount
sufficient to pay (A) the aggregate Change of Control Purchase Price of all
Securities or portions thereof that are to be purchased on the Change of Control
Purchase Date pursuant to Section 4.9 or (B) the redemption price of and accrued
interest on all Securities or portions thereof to be redeemed on the redemption
date in accordance with the requirements of paragraphs 5 and 6 set forth on the
reverse of the Securities) by subjecting other property, if such substitute
property has a Fair Market Value equal to or greater than the Collateral to be
released (the "Substitute Collateral") to the perfected first priority Lien of
this Indenture and the other Collateral Documents or a similar instrument in
place of and in exchange for any of the Collateral to be released, all in
accordance with this Section and Section 10.4.
(b) Substitute Collateral may be substituted for other Substitute
Collateral on the terms set forth in this Section.
(c) Unless an Event of Default shall have occurred and be continuing, the
Trustee shall release any of the Collateral from the Lien of this Indenture and
any of the other Collateral Documents and accept the Substitute Collateral
subject to the Lien of this Indenture and the other Collateral Documents upon
receipt thereof by the Trustee of:
(i) an application of the Company requesting such substitution of
Substitute Collateral for any of the Collateral and describing the property
to be so released and the property to be substituted therefor;
(ii) the Board Resolutions, certificates, opinions and other
statements listed in Sections 10.7(a), (k), (l) and (m), as and to the
extent applicable, in respect of any of the Collateral to be released;
(iii) an Officers' Certificate, dated not more than 30 days prior to
the date of the application for the substitution stating in substance the
Fair Market Value, in the opinion of the signers, of the Substitute
Collateral;
<PAGE>
(iv) if the Substitute Collateral is real property:
(1) an instrument in recordable form sufficient for the first
priority Lien of this Indenture and any Mortgage to cover the
Substitute Collateral which, if the real property is a leasehold or
easement interest, shall include normal and customary provisions with
respect thereto and evidence of the filing of all such financing
documents as may be necessary to perfect such Liens;
(2) a Mortgagee Policy of Title Insurance on the forms then
prescribed by the American Land Title Association (or the then
prevailing equivalent of such policy) insuring that the Lien of this
Indenture and any Mortgage constitutes a direct and valid and
perfected first priority mortgage Lien on such Substitute Collateral
in an aggregate amount equal to the Fair Market Value of the
Substitute Collateral, together with an Officers' Certificate stating
that any specific exceptions to such title insurance are Permitted
Liens and such endorsements and other opinions as are contemplated by
Section 10.3(c)(ii);
(3) an American Land Title Association survey with respect
thereto; and
(4) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, search and
examination charges, recording charges, survey costs, transfer taxes
and other costs and expenses, including reasonable legal fees and
disbursements of counsel for the Trustee (and any local counsel), that
may be incurred to validly and effectively subject the Substitute
Collateral to the first priority Lien of this Indenture and any other
applicable Collateral Document to perfect such Lien; and
(v) if the Substitute Collateral is a personal property interest:
(1) an instrument sufficient for the first priority Lien of this
Indenture and any other applicable Collateral Document to cover the
Substitute Collateral;
(2) to the extent not otherwise required by Section 10.8(c) (ii),
an Opinion of Counsel (subject to customary exceptions) stating that
the Lien of this Indenture and the other Collateral Documents
constitutes a perfected first priority Lien on such Substitute
Collateral, together with an Officers' Certificate stating that any
specific exceptions to such Lien are Permitted Liens; and
(3) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of counsel for the Trustee
(and any local counsel), that may be incurred to validly and
effectively subject the Substitute Collateral to the first priority
Lien of the Indenture and any other Collateral Document.
<PAGE>
SECTION 10.9. Eminent Domain and Other Governmental Takings. If any of the
Collateral be taken by eminent domain or be sold pursuant to the exercise by the
United States of America or any state, municipality or other governmental
authority of any right which it may then have to purchase, or to designate a
purchaser or to order a sale of, all or any part of the Collateral, the Trustee
shall release the property so taken or purchased, but only upon receipt by the
Trustee of the following:
(a) an Officers' Certificate stating that (i) such property has been
taken by eminent domain and the amount of the award therefor, or that such
property has been sold pursuant to a right vested in the United States of
America, any State or municipality thereof or other governmental authority
to purchase, or to designate a purchaser or order a sale of, such property
and the amount of the proceeds of such sale, and that all conditions
precedent herein provided for relating to such release have been complied
with and (ii) that the amount of the proceeds of the property so sold is
not less than the amount to which the Company is entitled under the terms
of such right to purchase or designate a purchaser, or under the order or
orders directing such sale, as the case may be;
(b) the award for such property or the proceeds of such sale, for the
Trustee to hold as Trust Monies subject to the disposition thereof pursuant
to Section 4.7; provided, however, that, in lieu of all or any part of such
award or proceeds, the Company shall have the right to deliver to the
Trustee a certificate of the trustee, mortgagee or other holder of a prior
Lien on all or any part of the property to be released, stating that such
award or proceeds, or a specified portion thereof, has been deposited with
such trustee, mortgagee or other holder pursuant to the requirements of
such prior Lien, in which case the balance of the award, if any, shall be
delivered to the Trustee; and
(c) an Opinion of Counsel substantially to the effect that:
(1) such property has been taken by eminent domain, or has been
sold pursuant to the exercise of a right vested in the United States
of America, any State or municipality thereof or other governmental
authority to purchase, or to designate a purchaser or order a sale of,
such property;
(2) in the case of any such taking by eminent domain, the award
for the property so taken has become final or, to the best of such
counsel's knowledge, no appeal is contemplated or pending;
(3) in case, pursuant to Section 10.9(b), the award for such
property or the proceeds of such sale, or a specified portion thereof,
shall be certified to have been deposited with the trustee, mortgagee
or other holder of a prior Lien, that the property to be released, or
a specified portion thereof, is or immediately before such taking or
purchase was subject to such prior Lien, and that such deposit is
required by such prior Lien; and
<PAGE>
(4) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered to
and deposited with the Trustee conform to the requirements of this
Indenture and any of the other Collateral Documents and that, upon the
basis of such application, the Trustee is permitted by the terms
hereof and of the other Collateral Documents to execute and deliver
the release requested, and that all conditions precedent herein
provided for relating to such release have been complied with.
In any proceedings for the taking or purchase or sale of any part of the
Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Trustee may be represented by
counsel who may be counsel for the Company.
All cash received by the Trustee pursuant to this Section 10.9 shall be
held by the Trustee as Trust Monies under Article 11 subject to application as
therein provided or as provided in Section 4.7. All purchase money and other
obligations received by the Trustee pursuant to this Section 10.9 shall be held
by the Trustee as Collateral subject to application as provided in Section
10.13.
SECTION 10.10. Suits to Protect the Collateral. Subject to the provisions
of the Collateral Documents, the Trustee shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of any of the Collateral Documents, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Securityholders in the Collateral (including power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the Liens of this Indenture and the
other Collateral Documents or be prejudicial to the interests of the
Securityholders or the Trustee).
SECTION 10.11. Purchaser Protected. In no event shall any purchaser in good
faith or any property purported to be released hereunder be bound to ascertain
the authority of the Trustee to execute the release or to inquire as to the
satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article to be sold be
under obligation to ascertain or inquire into the authority of the Company to
make any such sale or other transfer.
<PAGE>
SECTION 10.12. Powers Exercisable by Receiver or Trustee. In case the
Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article upon the Company with respect to
the release, sale or other disposition of such property may be exercised by such
receiver or trustee, and an instrument signed by such receiver or trustee shall
be deemed the equivalent of any similar instrument of the Company or of any
officer or officers thereof required by the provisions of this Article.
SECTION 10.13. Disposition of Obligations Received. All obligations
(including, without limitation, securities received in connection with an Asset
Disposition) received by the Trustee under this Article shall be held by the
Trustee as a part of the Collateral. Upon payment in cash or Temporary Cash
Investments by or on behalf of the Company to the Trustee of the entire unpaid
principal amount of any such obligation, to the extent not constituting Net Cash
Proceeds which at such time (i) constitute Excess Proceeds for purposes of
Section 4.7 or (ii) have been deposited with the Paying Agent in an amount
sufficient to pay (A) the aggregate Change of Control Purchase Price of all
Securities or portions thereof that are to be purchased on the Change of Control
Purchase Date pursuant to Section 4.9 or (B) the redemption price of and accrued
interest on all Securities or portions thereof to be redeemed on the redemption
date in accordance with the requirements of Section 3.1, the Trustee shall
release and transfer such obligation and any mortgage securing the same upon
receipt of any documentation that the Trustee may reasonably require. Any cash
or Temporary Cash Investments received by the Trustee in respect of the
principal of any such obligations shall be held by the Trustee as Trust Monies
under Article 11 subject to application as therein provided and as provided in
the Collateral Documents. Until the Securities are accelerated pursuant to
Section 6.2, all interest and other income on any such obligations, when
received by the Trustee, shall be paid to the Company from time to time. If the
Securities have been accelerated pursuant to Section 6.2, any such interest or
other income not theretofore paid, when collected by the Trustee, shall be
applied by the Trustee in accordance with Section 6.10.
SECTION 10.14. Limitation on Duty of Trustee in Respect of Collateral;
Indemnification. (a) Beyond the exercise of reasonable care in the custody
thereof, the Trustee shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Trustee shall be deemed to have exercised
reasonable care in the custody of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or
diminution in the value of any of the Collateral, by reason of the act or
omission of any carrier, forwarding agent or other agent or bailee selected by
the Trustee in good faith.
(b) The Trustee shall not be responsible for the existence, genuineness or
value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Liens in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder, except to the extent such action or omission constitutes negligence,
bad faith or willful misconduct on the part of the Trustee.
<PAGE>
(c) In the event that the Company fails to comply with the provisions of
this Indenture or the other Collateral Documents such that the value of any
Collateral or the validity, perfection, rank or value of the Lien hereunder or
thereunder is thereby diminished or potentially diminished or put at risk, the
Trustee may, but shall not be required to, effect such compliance on behalf of
the Company, and the Company shall reimburse the Trustee for the costs thereof
on demand. All expenses of protecting, storing, insuring and handling the
Collateral, any and all excise, property, sales, and use taxes imposed by any
state, Federal or local authority on any of the Collateral, or expenses in
respect of (i) the sales or other disposition thereof, (ii) the administration
or enforcement thereof, (iii) the exercise by the Trustee of any of the rights
conferred upon it hereunder, including the preservation of the validity,
perfection, rank or value of any Lien or (iv) any Default or Event of Default,
shall be borne and paid by the Company; and if the Company fails to promptly pay
any portion of such expenses when due, the Trustee may, at its option, but shall
not be required to, pay the same and charge the Company's account therefor and
the Company agrees to reimburse the Trustee therefor on demand. All sums so paid
or incurred by the Trustee for any of the foregoing and any and all other sums
for which the Company may become liable hereunder and all costs and expenses
(including reasonable attorneys' fees, legal expenses and court costs)
reasonably incurred by the Trustee in enforcing or protecting the Lien of this
Indenture or the other Collateral Documents or any of its rights or remedies
under this Indenture shall, together with interest thereon until paid at the
rate applicable to the Securities, be deemed to be secured hereby and under the
other Collateral Documents.
SECTION 10.15. Release upon Termination of the Company's Obligations. (a)
In the event that this Indenture shall cease to be of further effect pursuant to
Section 8.1, the Trustee shall upon demand deliver to the Company, on behalf of
the Securityholders, a notice disclaiming, relinquishing and releasing any and
all rights it has in respect of the Collateral and any other instruments or
documents evidencing or effecting such release that the Company may reasonably
request.
(b) Any release of any portion of the Collateral made strictly in
compliance with the provisions of this Section shall not be deemed to impair the
Liens created by this Indenture and the other Collateral Documents in
contravention of the provisions of this Indenture.
ARTICLE 11
Application of Trust Monies
---------------------------
SECTION 11.1. "Trust Monies" Defined. All cash or Temporary Cash
Investments received by the Trustee in accordance with the terms of this
Indenture and the other Collateral Documents:
(a) upon the release of property from the Lien of this Indenture and
any of the other Collateral Documents, including all monies received in
respect of the principal of all purchase money, governmental and other
obligations;
<PAGE>
(b) as compensation for, or proceeds of sale of, any part of the
Collateral taken by eminent domain or purchased by, or sold pursuant to an
order of, a governmental authority or otherwise disposed of;
(c) as proceeds of insurance upon any part of the Collateral (other
than any liability insurance proceeds payable to the Company or the Trustee
for any loss, liability or expense incurred by it),
(d) pursuant to the provisions of Sections 6, 19 and 23 of any of the
Mortgages;
(e) as proceeds in the lockboxes or otherwise held pursuant to Article
8 of the Security and Pledge Agreement; or
(f) for application under this Article as elsewhere provided in this
Indenture or any other Collateral Document, or whose disposition is not
elsewhere otherwise specifically provided for herein or in any other
Collateral Document;
(all such monies being herein sometimes collectively referred to as "Trust
Monies"), shall be held by the Trustee for the benefit of the Holders as a part
of the Collateral securing the Securities and, upon any entry upon or sale of
the Collateral or any part thereof pursuant to Article 6, the Trust Monies shall
be applied in accordance with Section 6.10 hereof; but, prior to any such entry
or sale, all or any part of the Trust Monies may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in
Sections 4.7, 10.7 and 11.2 to 11.6, inclusive.
SECTION 11.2. Retirement of Securities. The Trustee shall apply Trust
Monies from time to time to the payment of the principal and interest on any
Securities, at final Maturity or to the purchase thereof pursuant to Section 4.7
or Section 4.9, as the Company shall request, upon receipt by the Trustee of the
following:
(a) a Board Resolution directing the application pursuant to this
Section of a specified amount of Trust Monies and, in any case any such
monies are to be applied to payment, designating the Securities so to be
paid and prescribing the method of purchase, the price or prices to be paid
and the maximum principal amount of Securities to be purchased and any
other provisions of this Indenture governing such purchase;
(b) cash which, together with any Trust Monies then held by the
Trustee, equals or exceeds in the aggregate the maximum amount of the
accrued interest, if any, required to be paid in connection with any such
purchase, which cash shall be held by the Trustee in trust for such
purpose;
(c) an Officers' Certificate, dated not more than five days prior to
the date of the relevant application, stating that all conditions precedent
and covenants herein provided for relating to such application of Trust
Monies have been complied with; and
<PAGE>
(d) an Opinion of Counsel stating that the documents and the cash or
Temporary Cash Investments, if any, which have been or are therewith
delivered to and deposited with the Trustee conform to the requirements of
this Indenture and that all conditions precedent herein provided for
relating to such application of Trust Monies have been complied with.
Upon compliance with the foregoing provisions of this Section 11.2, the
Trustee shall apply Trust Monies as directed and specified by such Board
Resolution up to, but not exceeding, the principal amount of the Securities so
paid plus any accrued interest required in connection with such purchase.
A Board Resolution expressed to be irrevocable directing the application of
Trust Monies under this Section to the payment of the principal of particular
Securities shall for all purposes of this Indenture be deemed the equivalent of
the deposit of money with the Trustee in trust for such purpose. Such Trust
Monies and any cash deposited with the Trustee, pursuant to subsection (b) of
this Section for the payment of accrued interest, shall not, after compliance
with the foregoing provisions of this Section, be deemed to be part of the
Collateral or Trust Monies.
SECTION 11.3. Withdrawals of Insurance Proceeds and Condemnation Awards. To
the extent that any Trust Monies consist of either (a) the proceeds of insurance
upon any part of the Collateral or (b) any award for or the proceeds from any of
the Collateral being taken by eminent domain or sold pursuant to the exercise by
the United States of America, any State or municipality thereof or other
governmental authority of any right which it may then have to purchase, or to
designate a purchaser or to order a sale of any part of the Collateral, such
Trust Monies may be withdrawn by the Company and shall be paid by the Trustee
upon a request by the Company to the Trustee by the proper officer or officers
of the Company to reimburse the Company for expenditures made, or to pay costs
incurred, by the Company in connection with the repair, rebuild or replace the
property destroyed, damaged or taken, upon receipt by the Trustee of the
following:
(a) An Officers' Certificate, dated not more than 30 days prior to the date
of the application for the withdrawal and payment of such Trust Monies, setting
forth:
(i) that expenditures have been made, or costs incurred, by the
Company in a specified amount in connection with certain repairs,
rebuildings and replacements of the Collateral, which shall be briefly
described, and stating the Fair Market Value thereof to the Company at the
date of the acquisition thereof by the Company;
(ii) that no part of such expenditures or costs, in any previous or
then pending application, has been or is being made the basis for the
withdrawal of any Trust Monies pursuant to this Section;
(iii) that no part of such expenditures or costs has been paid out or
either the proceeds of insurance upon any part of the Collateral not
required to be paid to the Trustee under Section 7 of any Mortgage or any
award for or the proceeds from any of the Collateral being taken not
required to be paid to the Trustee under Section 10.8, as the case may be;
<PAGE>
(iv) that there is no outstanding indebtedness, other than costs for
which payment is being requested, known to the Company, after due inquiry,
for the purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in connection with
the making thereof, which, if unpaid, might become the basis of a vendor's,
mechanics', laborers', materialmen's, statutory or other similar Lien upon
any of such repairs, rebuildings or replacement, which Lien might, in the
opinion of the signers of such Officers' Certificate, materially impair the
security afforded by such repairs, rebuildings or replacement;
(v) that the property to be repaired, rebuilt or replaced is necessary
or desirable in the conduct to the Company's business;
(vi) that the Company has title to such repairs, rebuildings and
replacements that is substantially similar to its title to the property
destroyed, damaged or taken;
(vii) that no Event of Default shall have occurred and be continuing;
and
(viii) that the Company has complied with all conditions precedent
herein provided for relating to such withdrawal and payment.
(b) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith delivered to
the Trustee conform to the requirements of this Indenture or any other
Collateral Document, and that, upon the basis of such Company request and
the accompanying documents specified in this Section, all conditions
precedent herein provided for relating to such withdrawal and payment have
been Complied with, and the Trust Monies whose withdrawal is then requested
may be lawfully paid over under this Section; and
(ii) that all the Company's right, title and interest in and to said
repairs, rebuilding or replacements, or combination thereof, are then
subject to the first priority Lien of this Indenture and any of the other
Collateral Documents.
Upon compliance with the foregoing provisions of this Section, the Trustee
shall on Company request pay an amount of Trust Monies of the character
aforesaid equal to the amount of the expenditures or costs stated in the
Officers' Certificate required by paragraph (i) of subsection (a) of this
Section, or the Fair Market Value to the Company of such repairs, rebuildings
and replacements stated in such Officers' Certificate, whichever is less;
provided, however, that notwithstanding the above, so long as no Event of
Default or Default shall have occurred and be continuing, in the event that any
insurance proceeds or award for such property or proceeds of such sale does not
exceed $25,000 and, in the good faith estimate of the Company, such destruction
or damage resulting in such insurance proceeds or such taking or sale resulting
in such award does not detrimentally affect the value or use of the applicable
Collateral in any material respect, upon delivery to the Trustee of an Officers'
Certificate to such effect, the Trustee shall release to the Company such
insurance proceeds or award for such property or proceeds of such sale, free of
the Lien hereof and of the applicable Collateral Documents; provided, that the
Company shall take all steps necessary to notify the condemning authority of
such assignment.
<PAGE>
SECTION 11.4. Release of Real Estate Tax Monies; Rents. (a) To the extent
that any Trust Monies consist of monies deposited by the Company with the
Trustee in respect of taxes, assessments and other items required to be paid by
the Company pursuant to Section 5 of the Mortgages, the Trustee shall directly
remit funds in payment thereof in accordance with the provisions of the bills,
invoices or statements therefor upon receipt by the Trustee, at least 20 days
prior to the date that such bills, invoices and statements are deemed delinquent
or any penalties assessed in accordance with their respective terms, an
Officers' Certificate setting forth, in an itemized fashion, the specific taxes,
assessments and other items and amounts owing in respect thereof of which such
funds apply, together with true copies of the respective bills, invoices or
statements therefor, and certifying the validity and accuracy of each thereof.
(b) To the extent that any Trust Monies consist of monies collected by the
Trustee in respect of rents, issues, income and profits pursuant to Section 23
of the Mortgages, upon Company request, the Trustee shall return such funds to
the Company upon receipt by the Trustee of an Officers' Certificate stating that
no Event of Default or Default shall have occurred and be continuing and there
are no occurrences or circumstances which, with the giving of notice or passage
of time, or both, could result in the occurrence of an Event of Default, a
Default or a default under any other Indebtedness of the Company.
SECTION 11.5. Powers Exercisable Notwithstanding Event of Default. In case
an Event of Default shall have occurred and shall be continuing, the Company,
while in possession of the Collateral (other than cash, Temporary Cash
Investments, securities and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder or under the other Collateral
Documents or with the trustee, mortgage or other holder of a prior Lien), may do
any of the things enumerated in Sections 11.2, 11.3 and 11.4 if the Trustee in
its discretion, or the Holders of a majority in aggregate principal amount of
the Securities outstanding, by appropriate action of such Holders, shall consent
to such action, in which event any certificate filed under any of such Sections
shall omit the statement to the effect that no Event of Default has occurred and
is continuing. This Section shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.1(1) or (2).
SECTION 11.6. Powers Exercisable by Trustee or Receiver. In case the
Collateral (other than any cash, Temporary Cash Investments, securities and
other personal property held by, or required to be deposited or pledged with,
the Trustee hereunder or under the other Collateral Documents or with the
trustee, mortgagee or other holder of a prior Permitted Lien) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in this Article 11 conferred upon the Company with respect to the withdrawal or
application of Trust Monies may be exercised by such receiver or trustee, in
which case a certificate signed by such receiver or trustee shall be deemed the
equivalent of any Officers' Certificate required by this Article 11. If the
Trustee shall be in possession of any of the Collateral hereunder or under any
of the other Collateral Documents, such powers may be exercised by the Trustee
in its discretion.
<PAGE>
SECTION 11.7. Disposition of Securities Retired. All Securities received by
the Trustee and for whose purchase Trust Monies are applied under this Article
11 may, but shall not be required to, be promptly canceled by the Trustee and
returned to the Company.
SECTION 11.8. Investment of Trust Monies. All or any part of any Trust
Monies held by the Trustee hereunder (except such as may be held for the account
of any particular Securities) shall from time to time be invested or reinvested
by the Trustee pursuant to the specific written direction of the Company (so
long as no Event of Default has occurred and is continuing) in any Temporary
Cash Investments. Unless an Event of Default occurs and is continuing, any
interest in such Temporary Cash Investments (in excess of any accrued interest
paid at the time of purchase) which may be received by the Trustee shall be
forthwith paid to the Company. Such Temporary Cash Investments shall be held by
the Trustee as a part of the Collateral, subject to the same provisions hereof
as the cash used by it to purchase such Temporary Cash Investments.
The Trustee shall not be liable or responsible for any loss resulting from
such investments or sales except only for its own negligent action, its own
negligent failure to act or its own willful misconduct in complying with this
Section.
ARTICLE 12
Miscellaneous
-------------
SECTION 12.1. Trust Indenture Act Controls. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 317, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 12.2. Notices. Any notice or communication shall be in writing and
delivered in person, by telecopy or mailed by first-class mail addressed as
follows:
if to the Company:
Anacomp, Inc.,
11550 North Meridian Street
Carmel, IN 46032
Telecopy No.:
Attention of: Chief Financial Officer
if to the Trustee:
The Bank of New York
101 Barclay Street - 21W
New York, N.Y. 10286
Telecopy No.:
Attention of Corporate Trust - Trustee
Administration
<PAGE>
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 Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 12.3. Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA ss. 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
<PAGE>
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual 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 individual, 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
individual, such covenant or condition has been complied with.
SECTION 12.6. Rules by Trustee, Paying Agent and Registrar. The Trustee may
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 12.7. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 12.8. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. THE COMPANY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN
THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE.
SECTION 12.9. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or the Trustee shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
<PAGE>
SECTION 12.10. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
SECTION 12.11. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 12.12. Table of Contents; Headings. 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 intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 12.13. Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ANACOMP, INC.
By: -----------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: -----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
The following legend is to be inserted in Global Securities deposited with or on
behalf of the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
CUSIP NO. 032371 AB 2
$
ANACOMP, INC.
11-5/8% Senior Secured Note due 1999
Global Note No._______
ANACOMP, INC., an Indiana corporation, promises to pay to ---------------,
or registered assigns, the principal sum of -------------- Dollars on September
30, 1999.
Interest Payment Dates: March 31 and September 30
Record Dates: March 15 and September 15
Additional provisions of this Security are set forth on the other side of
this Security.
ANACOMP, INC.
[Seal] by
------------------------------------
Chairman of the Board and Chief
Executive Officer
------------------------------------
[Secretary]
<PAGE>
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of
the Securities
referred to in the Indenture.
by
-------------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
11-5/8% Senior Secured Note due 1999
1. Interest
ANACOMP, INC., an Indiana corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
March 31 and September 30 (each an "Interest Payment Date") of each year,
commencing September 30, 1996. Interest on the Securities will accrue from and
including the most recent date to which interest has been paid or, if no
interest has been paid, from the date of this Security. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
2% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on the March 15 or September 15 immediately preceding the Interest Payment Date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal and
interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture; Collateral Documents
The Company issued the Securities under an Indenture dated as of June 4,
1996 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
securityholders are referred to the Indenture and the Act for a statement of
those terms.
<PAGE>
The Securities are secured obligations of the Company limited to
$112,190,000 aggregate principal amount (subject to Section 2.9 of the
Indenture). The Indenture imposes certain limitations on the Company and the
Restricted Subsidiaries, including, subject to certain exceptions, limitations
on the Incurrence of Indebtedness, the payment of dividends on, and redemption
of, the Capital Stock of the Company and certain of its Subsidiaries, the
redemption of certain Subordinated Obligations of the Company and certain of its
Subsidiaries, the sale by the Company and certain of its Subsidiaries of assets
and certain Subsidiary stock, transactions with Affiliates, Liens on the
Collateral securing the Securities and consolidations and mergers and transfer
of all or substantially all the Company's and certain of its Subsidiaries'
assets. In addition, the Indenture limits the ability of the Company and certain
of its Subsidiaries to restrict distributions and dividends from such
Subsidiaries.
As provided in the Indenture, the Securities are secured by the Lien of the
Indenture and the other Collateral Documents in respect of the Collateral. Each
securityholder, by accepting a Security, shall be bound by and entitled to the
benefits of the Collateral Documents, as the same may be amended from time to
time pursuant to the provisions thereof and of the Indenture.
5. Optional Redemption
The Company may redeem the Securities in whole at any time or in part at
any time and from time to time at a redemption price of 100% of the principal
amount thereof, plus accrued and unpaid interest (if any) to the date of
redemption subject to the right of Holders of record on the relevant record date
to receive interest due on the related interest payment date.
6. Mandatory Redemption
The Company shall redeem Securities in the principal amounts and on the
dates set forth below at a redemption price of 100% of the principal amount,
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant date to receive interest due on the related interest
payment date).
September 30, 1996 $14,288,000
March 31, 1997 $14,286,000
September 30, 1997 $16,163,000
March 31, 1998 $16,161,000
September 30, 1998 $17,100,000
March 31, 1999 $17,100,000
September 30, 1999 Balance due
<PAGE>
The Company shall receive a credit against the principal amount of the
Securities required to be redeemed pursuant to this paragraph equal to the
principal amount (excluding premium) of any Securities that the Company has
acquired pursuant to a pro rata offer to the Holders of all the Securities or
redeemed other than pursuant to this paragraph and has delivered to the Trustee
for cancellation. Such credit shall be applied against redemption payments
otherwise required under this paragraph 6 in the order of their maturity, except
that in the case of a credit for redemption of Securities pursuant to clause
(i)(y) of Section 4.7(f) of the Indenture, such credit shall be allocated pro
rata to reduce all mandatory redemption payments thereafter required under this
paragraph 6 and, in the case of credit for redemption of Securities pursuant to
clause (ii) of Section 4.7(f) or pursuant to a pro rata offer to the Holders of
all the Securities at a price less than 100% of the principal amount of the
Securities to be purchased not otherwise required or provided for pursuant to
the terms of the Indenture, 50% of such credit shall be applied against
redemption payments otherwise required under this paragraph 6 in the order of
their maturity and 50% of such credit shall be allocated pro rata to reduce all
mandatory redemption payments thereafter required by this paragraph 6. The
Company may receive the credit only once for any Security.
7. Notice of Redemption
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address; provided, however, that, in
the case of any mandatory redemption, notice of such redemption shall be given
as aforesaid at least fifteen Business Days prior to the date fixed for
redemption. Securities in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
8. Put Provisions
Upon the occurrence of a Change of Control, any Holder of Securities will
have the right to require the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 100% of the principal
amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
Under certain circumstances, any Holder of Securities will have the right
to require the Company to repurchase all or part of the Securities of such
Holder at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) from certain Net Cash
Proceeds of Asset Dispositions as provided in, and subject to the terms of, the
Indenture.
<PAGE>
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request unless an abandoned property law designates another Person.
After any such payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
12. Discharge
Subject to certain conditions, the Company at any time may terminate some
of or all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
13. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to establish or
maintain the Lien of the Indenture and the other Collateral Documents as a
perfected first priority Lien of the Trustee in respect of the Collateral, to
correct or amplify the description of the Collateral subject to the Lien of the
Indenture or the other Collateral Documents, to subject additional property or
assets to the Lien of the Indenture or the other Collateral Documents, to
provide for uncertificated Securities in addition to or in place of certificated
Securities, to add Guarantees with respect to the Securities, to add additional
covenants or surrender rights and powers conferred on the Company, to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act or to make any change that does not adversely affect the rights of any
Securityholder.
<PAGE>
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days in
payment of interest on the Securities; (ii) default in payment of principal on
the Securities at maturity, upon acceleration, redemption or otherwise, or
failure by the Company to redeem or Purchase Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $5,000,000 at the time; (v) certain events of bankruptcy or
insolvency with respect to the Company and any Restricted Subsidiary; and (vi)
certain judgments or decrees for the payment of money in excess of $5,000,000.
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest) if it determines that withholding notice is
in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
<PAGE>
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), COST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. GOVERNING LAW
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Attention of Corporate Communications
<PAGE>
- - --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint -------------------------- agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
- - -----------------------------------------------
Date: ----------------- Your Signature: -----------------
(Sign exactly as your name appears on the other side of this Security)
- - --------------------------------------------------------------------------------
Signature
Guarantee:----------------------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934.)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount:
$---------------------------
Date: ---------------- Your Signature: ---------------------------------
(Sign exactly as your name
appears on the other side of
the Security)
Signature
Guarantee:----------------------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements include membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934.)
<PAGE>
Schedule I to 11 5/8% Senior Secured Indenture
Indebtedness To Be Outstanding
------------------------------
Immediately After the Issue Date
--------------------------------
I. Anacomp, Inc.
A) Letters of Credit Issued by Citibank
Number Beneficiary Amount
------ ----------- ------
1) NY 0816 30007207 Resolve Site Trust $ 415,642
2) NY 0688 3001550 United Pacific Insurance 600,000
3) NY 0692 30007293 Dept. of Health Services 232,000
4) NY 0692 30005316 Dept. of Health Services 2,000,000
5) NY 0816 30006547 Gulf Insurance Company 400,000
6) NY 0816 30009251 Aetna Casualty & Surety 1,365,703
7) NY 0688 30012164 Aetna Casualty & Surety 1,243,356
8) NY 0688 30016044 Centra Capital 500,000
B) Indianapolis Industrial Revenue Bonds 375,000
C) AT&T Capital Lease 37,472
D Carlisle Company Note 1,200,000
II. Anacomp S.A. (France)
A) Term Loan 123,732
<PAGE>
Schedule II to 11 5/8% Senior Secured Indenture
Liens To be Outstanding Immediately After the Issue Date
--------------------------------------------------------
Name Agreement Amount
---- --------- ------
SKC America, Inc. Amended and Restated
and SKC Limited Master Supply Agreement $10,000,000.00
<PAGE>
Schedule III to 11 5/8% Senior Secured Indenture
U.S. Restricted Subsidiaries
----------------------------
1. Florida A A C Corporation
<PAGE>
Schedule IV to 11 5/8% Senior Secured Indenture
UCC-1 Financing Statement Filing Jurisdictions
----------------------------------------------
Anacomp, Inc.
-------------
Alabama Secretary of State
Jefferson County, Alabama
Arizona Secretary of State
Maricopa County, Arizona
Pima County, Arizona
California Secretary of State
Alameda County, California
Los Angeles County, California
Orange County, California
Sacramento County, California
San Diego County, California
San Francisco County, California
Santa Clara County, California
Yolo County, California
Colorado Secretary of State
Denver County, Colorado
Connecticut Secretary of State
Town of Stratford, Connecticut
Town of East Hartford, Connecticut
Delaware Secretary of State
<PAGE>
Kent County, Delaware
Florida Secretary of State
Dade County, Florida
Duval County, Florida
Glades County, Florida
Hillsborough County, Florida
Orange County, Florida
Fulton County, Georgia
Illinois Secretary of State
Cook County, Illinois
Indiana Secretary of State
Eckhart County, Indiana
Hamilton County, Indiana
Marion County, Indiana
Iowa Secretary of State
Polk County, Iowa
Kansas Secretary of State
Wyandotte County, Kansas
Kentucky Secretary of State
Fayette County, Kentucky
Jefferson County, Kentucky
Maryland Department of Assessments and Taxation
Montgomery County, Maryland
Massachusetts Secretary of the Commonwealth
Town of Marlborough, Massachusetts
<PAGE>
Town of Medford, Massachusetts
Michigan Secretary of State
Ingham County, Michigan
Oakland County, Michigan
Wayne County, Michigan
Minnesota Secretary of State
Hennepin County, Minnesota
Missouri Secretary of State
City of St. Louis, Missouri
Mississippi Secretary of State
Lee County, Mississippi
Nebraska Secretary of State
Douglas County, Nebraska
Nevada Secretary of State
Clark County, Nevada
New Jersey Secretary of State
Camden County, New Jersey
Register of Deeds & Mortgages
Essex County, New Jersey
County Clerk
Hudson County, New Jersey
Hunterdon County, New Jersey
County Clerk
Middlesex County, New Jersey
County Clerk
Morris County, New Jersey
County Clerk
<PAGE>
Passaic County, New Jersey
Register of Deeds & Mortgages
New Mexico Secretary of State
Bernalillo County, New Mexico
New York Secretary of State
Erie County, New York
Monroe County, New York
Nassau County, New York
New York County, New York
North Carolina Secretary of State
Guilford County, North Carolina
Wake County, North Carolina
Union County, North Carolina
Ohio Secretary of State
Cuyahoga County, Ohio
Erie County, Ohio
Franklin County, Ohio
Hamilton County, Ohio
Montgomery County, Ohio
Oregon Secretary of State
Washington County, Oregon
Pennsylvania
Secretary of the Commonwealth
Allegheny County, Pennsylvania, Prothonotary
Delaware County, Pennsylvania
<PAGE>
South Carolina Secretary of State
Richland County, South Carolina
Tennessee Secretary of State
Macon County, Tennessee
Texas Secretary of State
Dallas County, Texas
Farrors County, Texas
Harris County, Texas
Hunt County, Texas
Young County, Texas
Utah Secretary of State
Salt Lake County, Utah
Virginia Office of State Corporation
Commission
Port William County, Virginia
Washington Department of Licensing
King County, Washington
Wisconsin Secretary of State
Waukesha County, Wisconsin
Florida A A C Corporation
Indiana Secretary of State
Hamilton County, Indiana
Florida Secretary of State
Dade County, Florida
Duval County, Florida
<PAGE>
Hillsborough County, Florida
Orange County, Florida
<PAGE>
Schedule V to 11 5/8% Senior Secured Indenture
Jurisdictions for UCC-1 Real Property Filings
---------------------------------------------
Anacomp, Inc.
-------------
California Secretary of State
Official Records, San Diego County, California
Texas Secretary of State
Deed Records of Young County, Texas
EXECUTION COPY
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ANACOMP, INC.
13% Senior Subordinated Notes due 2002
---------------------------------
INDENTURE
Dated as of June 4, 1996
---------------------------------
IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions and Incorporation by Reference............... 1
------------------------------------------
SECTION 1.1. Definitions.............................................. 1
SECTION 1.2. Other Definitions........................................ 23
SECTION 1.3. Incorporation by Reference of Trust Indenture Act........ 23
SECTION 1.4. Rules of Construction.................................... 24
ARTICLE 2
The Securities............................ 24
--------------
SECTION 2.1. Form and Dating.......................................... 24
SECTION 2.2. Execution and Authentication............................. 25
SECTION 2.3. Registrar and Paying Agent............................... 26
SECTION 2.4. Deposit of Moneys; Paying Agent To Hold
Money in Trust......................................... 26
SECTION 2.5. Securityholder Lists..................................... 27
SECTION 2.6. Transfer and Exchange.................................... 27
SECTION 2.7. Book-Entry Provisions for Global
Securities............................................. 28
SECTION 2.8. Certificated Securities.................................. 28
SECTION 2.9. Replacement Securities................................... 29
SECTION 2.10. Outstanding Securities................................... 29
SECTION 2.11. Temporary Securities..................................... 30
SECTION 2.12. Cancellation............................................. 30
SECTION 2.13. Defaulted Interest....................................... 30
SECTION 2.14. Record Date.............................................. 32
SECTION 2.15. CUSIP Numbers............................................ 32
ARTICLE 3
Redemption.............................. 32
----------
SECTION 3.1. Notices to Trustee....................................... 32
SECTION 3.2. Selection of Securities To Be Redeemed................... 33
SECTION 3.3. Notice of Redemption..................................... 33
SECTION 3.4. Effect of Notice of Redemption........................... 34
SECTION 3.5. Deposit of Redemption Price.............................. 34
SECTION 3.6. Securities Redeemed in Part.............................. 34
<PAGE>
Page
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ARTICLE 4
Covenants.............................. 34
---------
SECTION 4.1. Payment of Securities.................................... 34
SECTION 4.2. SEC Reports.............................................. 35
SECTION 4.3. Limitation on Indebtedness............................... 35
SECTION 4.4. Limitation on Restricted Subsidiary
Indebtedness and Preferred Stock......................... 39
SECTION 4.5. Limitation on Restricted Payments........................ 40
SECTION 4.6. Limitation on Restrictions on Distributions
from Restricted Subsidiaries........................... 43
SECTION 4.7. Limitation on Sales of Assets and
Restricted Subsidiary Stock............................ 44
SECTION 4.8. Limitation on Transactions with Affiliates............... 49
SECTION 4.9. Change of Control........................................ 50
SECTION 4.10. Compliance Certificate................................... 54
SECTION 4.11. Further Instruments and Acts............................. 54
SECTION 4.12. Limitation on Liens...................................... 54
SECTION 4.13. Limitation on Sale/Leaseback Transactions................ 54
SECTION 4.14. Limitation on Issuance and Sale of
Capital Stock of Restricted Subsidiaries............... 55
SECTION 4.15. Restricted and Unrestricted
Subsidiaries........................................... 55
SECTION 4.16. Revisions to Schedules................................... 56
SECTION 4.17. Maintenance of Properties; Insurance..................... 56
SECTION 4.18. Corporate Existence...................................... 57
SECTION 4.19. Taxes.................................................... 57
SECTION 4.20. Conflicting Agreements................................... 57
ARTICLE 5
Successor Company........................... 57
-----------------
<PAGE>
Page
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ARTICLE 6
Defaults and Remedies......................... 59
---------------------
SECTION 6.1. Events of Default........................................ 59
SECTION 6.2. Acceleration............................................. 61
SECTION 6.3. Other Remedies........................................... 62
SECTION 6.4. Waiver of Past Defaults.................................. 62
SECTION 6.5. Control by Majority...................................... 62
SECTION 6.6. Limitation on Suits...................................... 62
SECTION 6.7. Rights of Holders To Receive
Payment................................................ 63
SECTION 6.8. Collection Suit by Trustee............................... 63
SECTION 6.9. Trustee May File Proofs of Claim......................... 63
SECTION 6.10. Priorities............................................... 64
SECTION 6.11. Undertaking for Costs.................................... 64
SECTION 6.12. Waiver of Stay or Extension Laws......................... 64
ARTICLE 7
Trustee.............................. 65
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SECTION 7.1. Duties of Trustee........................................ 65
SECTION 7.2. Rights of Trustee........................................ 66
SECTION 7.3. Individual Rights of Trustee............................. 67
SECTION 7.4. Trustee's Disclaimer..................................... 67
SECTION 7.5. Notice of Defaults....................................... 67
SECTION 7.6. Reports by Trustee to Holders............................ 67
SECTION 7.7. Compensation and Indemnity............................... 68
SECTION 7.8. Replacement of Trustee................................... 68
SECTION 7.9. Successor Trustee by Merger.............................. 69
SECTION 7.10. Eligibility; Disqualification............................ 70
SECTION 7.11. Preferential Collection of Claims
Against Company........................................ 71
ARTICLE 8
Discharge of Indenture; Defeasance................. 71
----------------------------------
SECTION 8.1. Discharge of Liability on Securities;
Defeasance............................................. 71
SECTION 8.2. Conditions to Defeasance................................. 72
SECTION 8.3. Application of Trust Money............................... 73
SECTION 8.4. Repayment to Company..................................... 73
SECTION 8.5. Indemnity for Government Obligations..................... 74
SECTION 8.6. Reinstatement............................................ 74
<PAGE>
Page
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ARTICLE 9
Subordination............................ 74
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SECTION 9.1. Securities Subordinated to Senior
Indebtedness........................................... 74
SECTION 9.2. No Payment on Securities in Certain
Circumstances.......................................... 75
SECTION 9.3. Securities Subordinated to Prior Payment
of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company............... 76
SECTION 9.4. Securityholders To Be Subrogated to Rights
of Holders of Senior Indebtedness...................... 78
SECTION 9.5. Obligations of the Company Unconditional................. 78
SECTION 9.6. Trustee and Paying Agent Entitled To Assume
Payments Not Prohibited in Absence of Notice........... 79
SECTION 9.7. Application by Trustee of Monies
Deposited With It...................................... 79
SECTION 9.8. Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness........... 79
SECTION 9.9. Securityholders Authorize Trustee To
Effectuate Subordination of Securities................. 80
SECTION 9.10. Right of Trustee and Paying Agent To
Hold Senior Indebtedness............................... 80
SECTION 9.11. Article 9 Not To Prevent Events of Default............... 81
SECTION 9.12. No Fiduciary Duty Created to Holders
of Senior Indebtedness................................. 81
<PAGE>
Page
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ARTICLE 10
Amendments and Waivers...................... 81
----------------------
SECTION 10.1. Without Consent of Holders............................... 81
SECTION 10.2. With Consent of Holders.................................. 82
SECTION 10.3. Compliance with Trust Indenture Act...................... 83
SECTION 10.4. Revocation and Effect of Consents and.
Waivers................................................ 83
SECTION 10.5. Notation on or Exchange of
Securities............................................. 83
SECTION 10.6. Trustee To Sign Amendments............................... 84
SECTION 10.7. Payment for Consent...................................... 84
ARTICLE 11
Miscellaneous............................ 84
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SECTION 11.1. Trust Indenture Act Controls............................. 84
SECTION 11.2. Notices.................................................. 84
SECTION 11.3. Communication by Holders with Other Holders.............. 85
SECTION 11.4. Certificate and Opinion as to
Conditions Precedent................................... 85
SECTION 11.5. Statements Required in Certificate or Opinion............ 85
SECTION 11.6. Rules by Trustee, Paying Agent and Registrar............. 86
SECTION 11.7. Legal Holidays........................................... 86
SECTION 11.8. Governing Law............................................ 86
SECTION 11.9. No Recourse Against Others............................... 86
SECTION 11.10. Successors............................................... 87
SECTION 11.11. Multiple Originals....................................... 87
SECTION 11.12. Table of Contents; Headings.............................. 87
SECTION 11.13. Severability............................................. 87
Exhibit A - Form of Security
Schedule I - Indebtedness To Be Outstanding Immediately After the Issue Date
Schedule II - Liens To Be Outstanding Immediately After the Issue Date
Schedule III - U.S. Restricted Subsidiaries
<PAGE>
ANACOMP, INC.
Reconciliation and tie between Trust Indenture Act of 1939 ("TIA") and Indenture
dated as of June 4, 1996.*
TIA Indenture
Section Section
- - ------- ---------
310(a)(1) .............................................. 7.10
(a)(2) .............................................. 7.10
(a)(3) .............................................. N.A.
(a)(4) .............................................. N.A.
(a)(5) .............................................. 7.10
(b) .............................................. 7.8, 7.10
(c) .............................................. N.A.
311(a) .............................................. 7.11
(b) .............................................. 7.11
(c) .............................................. N.A.
312(a) .............................................. 2.5
(b) .............................................. 11.3
(c) .............................................. 11.3
313(a) .............................................. 7.6
(b)(1) .............................................. N.A.
(b)(2) .............................................. 7.6
(c) .............................................. 11.2
(d) .............................................. 7.6
314(a) .............................................. 4.2, 4.10
11.2
(b) .............................................. 4.21
(c)(1) .............................................. 11.4
(c)(2) .............................................. 11.4
(c)(3) .............................................. N.A.
(d) .............................................. N.A.
(e) .............................................. 11.5
(f) .............................................. 4.10
315(a) .............................................. 7.1
(b) .............................................. 7.5; 11.2
(c) .............................................. 7.1
(d) .............................................. 7.1
(e) .............................................. 6.11
316(a)(last sentence)........................................ 2.8
(a)(1)(A) .............................................. 6.5
(a)(1)(B) .............................................. 6.4
(a)(2) .............................................. N.A.
(b) .............................................. 6.7
(c) .............................................. 6.7
317(a)(1) .............................................. 6.8
(a)(2) .............................................. 6.9
(b) .............................................. 2.4
318(a) .............................................. 11.1
N.A. means Not Applicable.
- - --------------------
* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture. This reconciliation and tie shall only apply
subsequent to qualification of this Indenture under the TIA.
<PAGE>
INDENTURE dated as of June 4, 1996, between ANACOMP, INC., an Indiana
corporation (the "Company"), and IBJ SCHRODER BANK & TRUST COMPANY, a New York
banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 13% Senior
Subordinated Notes due 2002 (the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.1. Definitions.
-----------
"Accrued Interest Securities" means any Securities issued in payment of
accrued interest on the Securities pursuant to the second paragraph of Section 2
of the Securities and the last paragraph of Section 2.1 of this Indenture, as
the same may be amended or supplemented from time to time in accordance with
their terms.
"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.
Notwithstanding the foregoing, each Unrestricted Subsidiary shall be deemed an
Affiliate of the Company and of each other Subsidiary of the Company.
"Asset Disposition" means any direct or indirect sale, lease, transfer,
conveyance or other disposition (or series of related sales, leases, transfers,
conveyances or dispositions) of shares of Capital Stock of any Restricted
Subsidiary (other than directors' qualifying shares), property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any Restricted Subsidiary (including any disposition by means of a
merger, consolidation or similar transaction), other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of the Company's or
any Restricted Subsidiary's accounts receivable, lease receivables or inventory
(other than the disposition of inventory pursuant to a Sale/Leaseback
Transaction) at Fair Market Value in the Ordinary Course of Business, (iii) a
disposition of property or assets, whether in a single transaction or a series
<PAGE>
of related transactions which constitute a single plan of disposition, that have
an aggregate Fair Market Value not in excess of $250,000, (iv) an operating
lease entered into in the ordinary course of business with respect to property,
plant or equipment that in the judgment of the Board of Directors constitutes
excess capacity or (v) a "like-kind exchange" of an asset in exchange for an
asset of a third party, so long as, in the judgment of the Company's Board of
Directors, the asset received by the Company or such Restricted Subsidiary in
such exchange (x) has a Fair Market Value at least equal to the fair market
value of the asset transferred by the Company or such Restricted Subsidiary and
(y) is usable in a Permitted Line of Business to at least the same extent as the
asset transferred by the Company or such Restricted Subsidiary. An Asset
Disposition shall include the requisition of title to, seizure of or forfeiture
of any property or assets, or any actual or constructive total loss or an agreed
or compromised total loss of any property or assets. The term "Asset
Disposition" when used with respect to the Company shall not include any
disposition pursuant to Article 5 which constitutes a disposition of all or
substantially all the assets of the Company.
"Attributable Indebtedness", in respect of a Sale/Leaseback Transaction,
means, as at the time of determination, the greater of (i) the Fair Market Value
of the property subject to such Sale/Leaseback Transaction (as determined in
good faith by the Board of Directors) or (ii) the present value (discounted at
the interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Authorized Denominations" shall mean denominations of $1,000, or integral
multiples thereof, except in the case of Accrued Interest Securities, in which
case Authorized Denominations shall mean any denomination.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock and (b) the
amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
<PAGE>
"Board Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP; the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests (including partnership interests) in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.
"Change of Control" means the occurrence of any of the following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or a Restricted Subsidiary, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total voting power of the Voting Stock of the Company; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board then in office; or (iii) the Company, either individually or in
conjunction with one or more of its Subsidiaries, sells, conveys, leases or
otherwise transfers, or one or more of such Subsidiaries sell, convey, lease or
otherwise transfer, all or substantially all the assets of the Company and the
Restricted Subsidiaries, taken as a whole, to any Person (other than a
Restricted Subsidiary).
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Price Protection Agreement" means, in respect of a Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
"Consolidated Coverage Ratio" means, as of any date of determination, the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to the date of
such determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Asset Disposition, or both, EBITDA for such period shall be reduced
by an amount equal to EBITDA (if positive) directly attributable to the property
or assets which are the subject of such Asset Disposition for such period, or
increased by an amount equal to EBITDA (if negative) directly attributable
thereto for such period and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and the continuing Restricted Subsidiaries in connection with such Asset
Dispositions for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and the continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such period the
Company or any Restricted Subsidiary (by merger or otherwise) shall have made an
<PAGE>
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction causing a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit
of a business, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period and (4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition or any Investment that would have required an
adjustment pursuant to clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition or Investment occurred on the first day of
such period. For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company and as further contemplated by the definition of pro forma. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the sum of (i) the
total cash and noncash interest expense of the Company and its consolidated
Subsidiaries, plus, to the extent not included in such interest expense, (A)
interest expense attributable to Capital Lease Obligations, (B) amortization of
debt discount and debt issuance cost, (C) capitalized interest, (D) accrued
interest, (E) commissions, discounts and other fees and charges paid or owed
with respect to letters of credit and bankers' acceptance financing, (F)
interest actually paid by the Company or any such Subsidiary under any Guarantee
of Indebtedness or other obligation of any other Person, (G) net costs
associated with Hedging Obligations (including amortization of discounts and
fees), (H) the interest portion of any deferred obligation, (I) Preferred Stock
dividends in respect of all Preferred Stock of Subsidiaries of the Company and
Redeemable Stock of the Company held by Persons other than the Company or a
Wholly Owned Subsidiary and (J) cash contributions to any employee stock
<PAGE>
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust
(provided, however, that there shall be excluded from this clause (i), (x) any
such interest expense of any Unrestricted Subsidiary to the extent the related
Indebtedness is not Guaranteed or paid by the Company or any Restricted
Subsidiary and (y) any such interest expense attributable to original issue
discount as a result of Fresh Start Accounting adjustments), less (ii) to the
extent included in clause (i), amortization or write-off of deferred financing
costs of the Company and its consolidated Subsidiaries during such period and
any charge related to any premium or penalty paid in connection with redeeming
or retiring any Indebtedness of the Company and its consolidated Subsidiaries
prior to its Stated Maturity.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries for such period determined in
accordance with GAAP but excluding for such purpose the impact of any Fresh
Start Accounting adjustment; provided, however, that there shall not be included
in such Consolidated Net Income (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any person acquired by
the Company or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition, (iii) any net income (loss) of
any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the limitations contained in (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a net loss
of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (iv) any gain (but not loss) realized
upon the sale or other disposition of any property, plant or equipment of the
Company or its consolidated Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business, (v) any gain (but not loss) realized upon the sale
or other disposition of any Capital Stock of any Person, (vi) any extraordinary
gain or loss, (vii) the cumulative effect of a change in accounting principles
and (viii) any non-recurring restructuring charges for any fiscal quarter in the
fiscal year of the Company commencing October 1, 1995.
<PAGE>
"Consolidated Tangible Net Worth" means the amount by which (i) the total
of the amounts shown on the balance sheet of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recent fiscal quarter of the Company ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (x) the par or stated value of all outstanding Capital Stock of
the Company plus (y) paid-in capital or capital surplus relating to such Capital
Stock plus (z) any retained earnings or earned surplus exceeds (ii) the sum of
(A) any accumulated deficit, (B) any amounts attributable to Disqualified Stock,
(C) the amounts appearing on the assets side of such balance sheet for all
contracts, patents, trademarks, copyrights and other intellectual property
rights, franchises, licenses, goodwill, treasury stock, unamortized debt
discount and expense and similar intangibles, (D) any increase in the amount of
capitalized research and development and capitalized interest subsequent to the
Issue Date, and (E) the amount of any write-up subsequent to the Issue Date in
the book value of any asset owned on the Issue Date resulting from the
revaluation thereof subsequent to such date, or any write-up in excess of the
cost of any asset acquired subsequent to that date.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in foreign currency exchange rates.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its nominees, and
their respective successors.
"Disqualified Stock" of a Person means Redeemable Stock of such Person as
to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the Holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Securities.
<PAGE>
"Dollar Equivalent" means, with respect to any monetary amount in a
currency other than U.S. dollars, at any time for the determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as quoted by Citibank, N.A. in New
York City at approximately 11:00 a.m. (New York time) on the date two Business
Days prior to such determination.
"EBITDA" for any period means the Consolidated Net Income for such period,
plus, to the extent deducted in calculating such Consolidated Net Income, (i)
income tax expense, (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense and (v) any charge related to any premium or
penalty paid in connection with redeeming or retiring any Indebtedness prior to
its Stated Maturity, in each case for such period.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction; provided, that the foregoing
shall not prohibit sales of inventory at a discount or on terms which are
typical in the industry to which such inventory relates. Fair Market Value shall
be determined, except as otherwise provided herein, (i) if such property or
asset has a Fair Market Value less than $5,000,000, by two officers of the
Company in an Officers' Certificate delivered to the Trustee or (ii) if such
property or asset has a Fair Market Value in excess of $5,000,000, by the Board
of Directors as a whole and evidenced by a Board Resolution, dated within 30
days of the relevant transaction, of the Board of Directors delivered to the
Trustee.
"Foreign Asset Disposition" means an Asset Disposition in respect of
Capital Stock or assets of a Restricted Subsidiary of the type described in
Section 936 of the Code to the extent that the proceeds of such Asset
Disposition are received by a Person subject in respect of such proceeds to the
tax laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is
incorporated in a jurisdiction other than the United States of America, any
State thereof or the District of Columbia.
<PAGE>
"Fresh Start Accounting" means Fresh Start Accounting as described in
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" (Am. Inst. of Certified Public Accountants 1990), as
then in effect, or any comparable statement then in effect.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP consistently applied, except as otherwise
expressly provided in this Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to
keepwell, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Protection Agreement, Commodity Price Protection
Agreement or Currency Exchange Protection Agreement or other similar agreement
or arrangement.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Incur" means to, directly or indirectly, create, issue, assume, Guarantee,
incur (by conversion, exchange or otherwise) extend, assume, or otherwise become
liable for, contingently or otherwise; provided, however, that any Indebtedness
or Capital Stock of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be
deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary.
The terms "Incurrence", "Incurred" and "Incurring" shall each have a correlative
meaning.
<PAGE>
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all Capital Lease Obligations and all Attributable Indebtedness
of such Person;
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except (A) Trade Payables and (B)
any obligation to pay any portion of such purchase price that becomes due
only if the earnings attributable to such property or services satisfy
predetermined minimum amounts subsequent to the purchase of such property
or services and the amount of such obligation cannot be determined on the
date of such purchase);
(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (i) through (iv) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on any such
letter of credit;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of such Indebtedness shall be the lesser
of (A) the Fair Market Value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
<PAGE>
(ix) to the extent not otherwise included in this definition,
obligations of such Person in respect of Hedging Obligations.
For purposes of this definition, the maximum fixed redemption, repayment or
repurchase price of any Disqualified Stock or Preferred Stock that does not have
a fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Stock as if such Stock were redeemed, repaid
or repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, however, that if such Stock is
not then permitted to be redeemed, repaid or repurchased, the redemption,
repayment or repurchase price shall be the book value of such Stock as reflected
in the most recent financial statements of such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the TIA that are deemed to be a part of and govern this
instrument, and any such supplemental indenture, respectively.
"Indenture Obligations" means the obligations of the Company (and any other
obligor hereunder or under the Securities) to pay principal of, and premium, if
any, and interest (including, without limitation, any default interest) on, the
Securities when due and payable, whether at maturity, by acceleration, call for
redemption or repurchase, in each case as required hereunder, and all other
amounts due or to become due under or in connection with this Indenture and the
Securities and the performance of all other obligations to the Trustee and the
Holders under this Indenture and the Securities, according to the terms hereof
and thereof.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
<PAGE>
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others)
such Person, or any purchase or acquisition of all or substantially all the
business or assets of, Capital Stock, Indebtedness, any other evidence of
beneficial ownership or other similar instruments issued by, such Person. For
purposes of Sections 4.5 and 4.15, (i) the term "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated as a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer. In determining the amount of any Investment in respect of any property
or asset other than cash, such property or asset shall be valued at its Fair
Market Value at the time of such Investment (unless otherwise specified in this
definition).
"Issue Date" means the first date on which Securities are issued pursuant
to this Indenture.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, preference, priority, security interest,
encumbrance, easement, restriction, covenant, right-of-way, servitude, lien
(statutory or otherwise), charge, other security or similar agreement or
preferential arrangement of any kind or nature whatsoever or other adverse claim
of any kind or nature (including, without limitation, any conditional sale or
other title retention agreement or lease having substantially the same economic
effect of any of the foregoing).
"Magnetics Division" means the property and assets of the Company or any
Restricted Subsidiary used in connection with the manufacture, marketing and
sale of magnetic tape, computer tape or other magnetic products.
<PAGE>
"Net Cash Proceeds" from an Asset Disposition means the sum of (i) cash
payments and Temporary Cash Investments received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to such
properties or assets or received in any other non-cash form) therefrom and (ii)
the Fair Market Value of all securities issued to the Company or a Subsidiary of
the Company in connection therewith, in each case net of (A) all legal, title
and recording tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP as a consequence of such Asset Disposition,
(B) all payments made on any Indebtedness which is secured by any property or
assets subject to such Asset Disposition, in accordance with the terms of any
Lien upon such property or assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (C) all distributions
and other payments required to be made to minority interest Holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (D) the
deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition; provided, that, in the event
that any consideration for such Asset Disposition (which would otherwise
constitute Net Cash Proceeds) is required to be held in escrow pending
determination of whether a purchase price adjustment shall be made, such
consideration (or any portion thereof) shall become Net Cash Proceeds only at
such time as it is released to the Company or any Restricted Subsidiary from
escrow; provided, further, that any non-cash consideration received in
connection with such Asset Disposition, which is subsequently converted to cash,
shall be deemed to be Net Cash Proceeds at such time and shall thereafter be
applied in accordance with Section 4.7. The term "Net Cash Proceeds" from an
issuance or sale of Capital Stock means the cash proceeds of such issuance or
sale, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Officer" means the Chairman of the Board and Chief Executive Officer, the
President and Chief Operating Officer, the Vice President and Chief
Administrative Officer, any other Vice President, the Treasurer or the Secretary
of the Company.
<PAGE>
"Officers' Certificate" means a certificate signed by two Officers at least
one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.
"Opinion of Counsel" means a written opinion, in form acceptable to the
Trustee, from legal counsel who is acceptable to the Trustee. The counsel may be
an employee of or counsel to the Company or the Trustee.
"Ordinary Course of Business" means sales or assignments of inventory or
accounts receivable or the performance of services at Fair Market Value or the
collection of accounts receivable in the ordinary course of business and does
not include any sale, assignment or collection after the voluntary or
involuntary bankruptcy of the Company, including, without limitation, those
events of the type described in Section 6.1(8) and (9). The ordinary course of
business shall include (i) sales of inventory to customers, (ii) returns of
merchandise to manufacturers or distributors for refunds or credit and (iii)
exchanges of inventory with manufacturers or distributors for other inventory.
"pari passu," as applied to the ranking of any Indebtedness of a Person in
relation to other Indebtedness of such Person, means that each such Indebtedness
either (i) is not subordinate in right of payment to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other; and is
so subordinate to the same extent, and is not subordinate in right of payment to
each other or to any Indebtedness as to which the other is not so subordinate.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) a Wholly Owned Subsidiary (including any Person which will
become a Wholly Owned Subsidiary as a result of such Investment) or any Person
that is merged or consolidated with or into, or transfers or coveys all or
substantially all of its business or assets to, the Company or any Wholly Owned
Subsidiary at the time such Investment is made; (ii) Temporary Cash Investments;
(iii) receivables owing to the Company or such Restricted Subsidiary, if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that nothing in this
paragraph shall limit in any way the ability of the Company or such Restricted
Subsidiary to settle, compromise or otherwise deal with such receivables in the
ordinary course of business; (iv) payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the ordinary course of
business; (v) loans or advances, in the aggregate principal amount of $6,000,000
outstanding from time to time, to employees of the Company or such Restricted
Subsidiary made in the ordinary course of business consistent with past
practices of the Company or such Restricted Subsidiary, as the case may be; (vi)
<PAGE>
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or such Restricted
Subsidiary or in satisfaction of judgments; (vii) joint ventures, whether in the
form of cash or through a contribution of assets (the nature of which, if other
than cash, to be determined in good faith by the Board of Directors, whose
determination shall be evidenced by a Board Resolution delivered to the Trustee)
in an amount not to exceed $10,000,000 at any one time; (viii) any other
property, asset or Person if made pursuant to any written agreement of the
Company or such Restricted Subsidiary in effect on the Issue Date; and (ix)
Investments made as a result of the receipt of non-cash consideration from an
Asset Disposition that was made pursuant to and in compliance with the
provisions of Section 4.7 or a disposition of assets pursuant to and in
compliance with the provisions of Article 5 hereof.
"Permitted Liens" means (i) pledges or deposits by the Company or any
Restricted Subsidiary under workmen's compensation laws, unemployment insurance
laws, other types of social security benefits or similar legislation, or good
faith deposits in connection with bids, tenders or contracts (other than for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations or
deposits of cash or United States government bonds to secure surety or appeal
bonds to which the Company or any Restricted Subsidiary is a party, or deposits
as security for contested taxes or import duties or for the payment of rent, in
each case incurred by the Company or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; (ii) Liens imposed by law,
such as carriers', warehousemen's and mechanics Liens, in each case for sums not
yet due from the Company or any Restricted Subsidiary or being contested in good
faith by appropriate proceedings by the Company or any Restricted Subsidiary, as
the case may be, or other Liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary, as the case may be, shall then be prosecuting an appeal
or other proceedings for review; (iii) Liens for property taxes or other taxes,
assessments or governmental charges of the Company or any Restricted Subsidiary
not yet due or payable or subject to penalties for nonpayment or which are being
contested by the Company or such Restricted Subsidiary, as the case may be, in
good faith by appropriate proceedings; (iv) Liens in favor of issuers of standby
letters of credit, performance bonds and surety bonds issued pursuant to Section
4.3(b)(viii)(B) or Section 4.4(b)(iii)(B); (v) survey exceptions, encumbrances,
easements or reservations of, or rights of others for, licenses, rights-of-way,
sewers, electric lines, telegraph and telephone lines and other similar purposes
or zoning or other restrictions as to the use of real property of the Company or
any Restricted Subsidiary incidental to the ordinary course of conduct of the
business of the Company or such Restricted Subsidiary or as to the ownership of
<PAGE>
properties of the Company or any Restricted Subsidiary, which, in either case,
were not incurred in connection with Indebtedness and which do not in the
aggregate materially adversely affect the value of said properties or materially
impair their use in the operation of the business of the Company or any
Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted under Section
4.3(b)(i) and Section 4.4(b)(vi); (vii) Liens outstanding immediately after the
Issue Date as set forth on Schedule II hereto (and not otherwise permitted by
clause (vi)); (viii) Liens on property, assets or shares of stock of any
Restricted Subsidiary at the time such Restricted Subsidiary became a Subsidiary
of the Company; provided, however, that (A) if any such Lien shall have been
Incurred in anticipation of such transaction, such property, assets or shares of
stock subject to such Lien shall have a Fair Market Value at the date of the
acquisition thereof not in excess of the lesser of (1) the aggregate purchase
price paid or owed by the Company in connection with the acquisition of such
Restricted Subsidiary and (2) the Fair Market Value of all property and assets
of such Restricted Subsidiary and (B) any such Lien shall not extend to any
other property or assets owned by the Company or any Restricted Subsidiary; (ix)
Liens on property or assets at the time the Company or any Restricted Subsidiary
acquired such property or assets, including any acquisition by means of a merger
or consolidation with or into the Company or such Restricted Subsidiary;
provided, however, that (A) if any such Lien shall have been incurred in
anticipation of such transaction, such property or assets subject to such Lien
shall have a Fair Market Value at the date of the acquisition thereof not in
excess of the lesser of (1) the aggregate purchase price paid or owed by the
Company or such Restricted Subsidiary in connection with the acquisition thereof
and of any other property and assets acquired simultaneously therewith and (2)
the Fair Market Value of all such property and assets acquired by the Company or
such Restricted Subsidiary and (B) any such Lien shall not extend to any other
property or assets owned by the Company or any Restricted Subsidiary; (x) Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or a Wholly Owned Subsidiary; (xi) Liens to secure any extension,
renewal, refinancing, replacement or refunding (or successive extensions,
renewals, refinancings, replacements or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in any of clauses (vii), (viii) and
(ix); provided, however, that any such Lien will be limited to all or part of
the same property or assets that secured the original Lien (plus improvements on
such property) and the aggregate principal amount of Indebtedness that is
secured by such Lien will not be increased to an amount greater than the sum of
(A) the outstanding principal amount, or, if greater, the committed amount, of
the Indebtedness described under clauses (vii), (viii) and (ix) at the time the
original Lien became a Permitted Lien under the Indenture and (B) an amount
necessary to pay any premiums, fees and other expenses Incurred by the Company
in connection with such refinancing, refunding, extension, renewal or
replacement; (xii) Liens on property or assets of the Company securing Hedging
Obligations so long as the related Indebtedness is, and is permitted to be under
Section 4.3(b), secured by a Lien on the same property securing the relevant
Hedging Obligation; (xiii) Liens securing Indebtedness incurred under (A) in the
case of the Company, any revolving credit facility; provided, that such
Indebtedness constitutes Senior Debt permitted hereunder and such Liens relate
only to accounts receivable, inventory and proceeds thereof (other than proceeds
from the disposition of inventory pursuant to any Sale/Leaseback Transaction);
<PAGE>
and (B) in the case of any Foreign Restricted Subsidiary, any foreign currency
revolving credit facility; provided, that such Indebtedness was incurred in
compliance with Section 4.4(b)(ii) and such Liens relate only to the accounts
receivable, inventory and proceeds thereof of such Foreign Restricted Subsidiary
(other than proceeds from the disposition of inventory pursuant to any
Sale/Leaseback Transaction); and (xiv) Liens on property or assets of the
Company or any Restricted Subsidiary securing Indebtedness (1) under Purchase
Money Indebtedness or Capital Lease Obligations permitted under, in the case of
the Company, Section 4.3(b)(vii) and, in the case of such Restricted Subsidiary,
Section 4.4(b)(ii) or (2) under Sale/Leaseback Transactions permitted under
Section 4.13; provided, that (A) the amount of Indebtedness Incurred in any
specific case does not, at the time such Indebtedness is Incurred, exceed the
lesser of the cost or Fair Market Value of the property or asset acquired or
constructed in connection with such Purchase Money Indebtedness or Capital Lease
Obligation or subject to such Sale/Leaseback Transaction, as the case may be,
(B) such Lien shall attach to such property or asset upon acquisition of such
property or asset and or upon commencement of such Sale/Leaseback Transaction,
as the case may be, and (C) no property or asset of the Company or any
Restricted Subsidiary (other than the property or asset acquired or contracted
in connection with such Purchase Money Indebtedness or Capital Lease Obligation
or subject to such Sale/Leaseback Transaction, as the case may be) are subject
to any Lien securing such Indebtedness.
"Permitted Line of Business" means (i) the line or lines of business in
which the Company or any of its Subsidiaries is engaged on the Issue Date and
(ii) a line or lines of business similar or related to the line or lines of
business described in the foregoing clause (i).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
<PAGE>
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms hereof, a calculation in accordance with Article 11
of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Purchase Money Indebtedness" means, with respect to any Person, all
obligations of such Person (i) consisting of the deferred purchase price of any
property or assets, conditional sale obligations, obligations under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business) and other purchase money obligations, in each case
where the maturity of such obligation does not exceed the anticipated useful
life of the property or asset being financed, (ii) Incurred to finance the
acquisition or construction of any property or asset and (iii) Incurred to
finance the acquisition of 100% of the Capital Stock (other than directors'
qualifying shares) of any other Person.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including, without limitation,
upon the happening of any event) (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or
exchangeable for Indebtedness (other than Preferred Stock) or Disqualified Stock
or (iii) is redeemable at the option of the Holder thereof, in whole or in part.
"Reference Bank" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not an
Affiliate of the Trustee and (iii) having an established place of business in
London.
<PAGE>
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," "refinancing" and "refinanced"
shall have a correlative meaning) any Indebtedness (including Indebtedness of
the Company that refinances Indebtedness of any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
another Restricted Subsidiary), including Indebtedness that refinances
Refinancing Indebtedness; provided, that (i) the Refinancing Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being refinanced and (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than
the sum of (A) the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being refinanced and (B) any premiums, fees and other expenses paid by the
Company or the Restricted Subsidiary, as the case may be, in connection with
such refinancing; provided, further, that Refinancing Indebtedness shall not
include (x) Indebtedness of a Subsidiary of the Company that refinances
Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; provided,
further, that the covenants relating to the Refinancing Indebtedness are no more
restrictive in the aggregate than those of the Indebtedness being refinanced
and, if the Indebtedness being refinanced is subordinated to the Securities, the
Refinancing Indebtedness is at least as subordinated to the Securities as the
Indebtedness being refinanced.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby pursuant to a direct or indirect arrangement
the Company or any Restricted Subsidiary of the Company transfers such property
to a Person and the Company or such Restricted Subsidiary leases it from such
Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities issued under this Indenture (including
any Accrued Interest Securities).
"Securities Act" means the Securities Act of 1933.
<PAGE>
"Senior Indenture" means the Indenture, dated as of June 4, 1996, between
the Company and The Bank of New York, as Trustee, as the same may be amended,
supplemented or modified in accordance with its terms.
"Senior Indebtedness" means the principal of, interest (including, without
limitation, interest at the contract rate relating to such Senior Indebtedness
accruing after any proceeding or event referred to in clauses (8) and (9) of
Section 6.1) on, or any other amounts due with respect to, (i) the Senior
Secured Notes, (ii) any Refinancing Indebtedness Incurred in respect of the
Senior Secured Notes or in respect of any previous Refinancing Indebtedness
Incurred in respect of such Notes and (iii) any Indebtedness Incurred pursuant
to clause (b)(xi) of Section 4.3. For purposes of Section 4.7, the amount of
consideration received by the Company or any Restricted Subsidiary for the
assumption of Senior Indebtedness by any purchaser of the Company's property,
assets or shares shall be equal to the face value of such Senior Indebtedness.
"Senior Secured Notes" means the $112,190,000 aggregate principal amount of
the 11.625% Senior Secured Notes due 1999 of the Company issued pursuant to the
Senior Indenture and any Senior Secured Notes issued upon the transfer thereof
or in substitution therefor, as the same may be amended, modified, supplemented
or extended from time to time (provided that the term "Senior Secured Notes"
shall not include any amendment, modification or extension thereof, or
supplement thereto, to the extent such amendment, modification, extension or
supplement increases or permits increase in the principal amount outstanding or
to be outstanding thereunder not permitted under the terms of Section 4.3
("Non-Permitted Increases"), and in the event any such Non-Permitted Increases
are provided for in any such amendment, supplement, modification or extension,
the term "Senior Secured Notes" shall thereafter mean the Senior Secured Notes
as in effect prior thereto without giving effect to such Non-Permitted
Increases).
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the Holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Securities pursuant to the terms of such
Indebtedness or pursuant to a written agreement.
<PAGE>
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) investments in
U.S. Government Obligations maturing within 90 days of the date of acquisition
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any State thereof having capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the Dollar
Equivalent thereof) and whose long-term debt is rated "A" or higher according to
Moody's Investors Service, Inc. (or such equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule 436
under the Securities Act)), (iii) repurchase obligations with a term of not more
than 7 days for underlying securities of the types described in clause (i)
entered into with a bank meeting the qualifications described in clause (ii) and
(iv) investments in commercial paper, maturing not more than 90 days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Corporation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trade Payables" means, with respect to any Person, any accounts payable or
any indebtedness or monetary obligation to trade creditors created, assumed or
Guaranteed by such Person arising in the ordinary course of business of such
Person in connection with the acquisition of goods or services, including under
the Company's Amended and Restated Master Supply Agreement dated as of October
8, 1993, among the Company, SKC Limited and SKC America, Inc., as such Agreement
is in effect on the Issue Date.
<PAGE>
"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 the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in, unless the context otherwise specifies, New York.
"Unrestricted Subsidiary" means (i) each Subsidiary of the Company that the
Company has designated, or is deemed to have designated, pursuant to the
provisions described under Section 4.15 as an Unrestricted Subsidiary and that
has not been redesignated a Restricted Subsidiary and (ii) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"U.S. Restricted Subsidiary" means any Restricted Subsidiary that is not a
Foreign Restricted Subsidiary.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
or another Wholly Owned Subsidiary.
<PAGE>
SECTION 1.2. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"........................................... 4.8
"Agent Members"................................................... 2.7
"Application Date"................................................ 4.7(a)
"Asset Disposition Purchase Amount"............................... 4.7(a)
"Asset Disposition Purchase Date"................................. 4.7(a)
"Asset Disposition Purchase Notice"............................... 4.7(d)
"Asset Disposition Purchase Offer"................................ 4.7(a)
"Asset Disposition Purchase Price"................................ 4.7(a)
"Asset Disposition Trigger"....................................... 4.7(b)
"Bankruptcy Law".................................................. 6.1
"Change of Control Offer"......................................... 4.9(a)
"Change of Control Purchase Date"................................. 4.9(a)
"Change of Control Purchase Notice"............................... 4.9(a)
"Change of Control Purchase Price"................................ 4.9(a)
"covenant defeasance option"...................................... 8.1(b)
"Custodian"....................................................... 6.1
"Defaulted Interest".............................................. 2.11
"Event of Default"................................................ 6.1
"Global Securities"............................................... 2.1
"legal defeasance option"......................................... 8.1(b)
"Legal Holiday"................................................... 11.7
"Notice of Default"............................................... 6.1
"Paying Agent".................................................... 2.3
"Payment"......................................................... 9.2
"Permitted Indebtedness".......................................... 4.3(b)
"Permitted Restricted Subsidiary
Indebtedness"................................................... 4.4(b)
"Refinanced Indebtedness"......................................... 4.3(e)
"Registrar"....................................................... 2.3
"Restricted Payment".............................................. 4.5
"Surviving Entity"................................................ Article 5
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
<PAGE>
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
The Securities
--------------
SECTION 2.1. Form and Dating. The Securities and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). The Company shall furnish any such legend not contained in
Exhibit A to the Trustee in writing. Each Security shall be dated the date of
its authentication. The terms of the Securities set forth in Exhibit A are part
of the terms of this Indenture.
<PAGE>
The Securities shall be issued initially in the form of one or more
permanent global Securities in registered form, substantially in the form set
forth in Exhibit A (the "Global Securities"), deposited with, or on behalf of,
the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Each Global Security shall bear such legend as may be
required or reasonably requested by the Depositary.
The Company may issue Accrued Interest Securities in accordance with the
second paragraph of Section 2 of the Securities. All Accrued Interest Securities
so issued shall constitute obligations of the Company under this Indenture and
shall be subject to the terms and conditions contained herein (except with
respect to the date from which interest shall accrue) as if they were issued on
the Issue Date.
SECTION 2.2. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate and make available for delivery Global Securities, from
time to time, in an aggregate principal amount of $160,000,000 (plus the
principal amount of any Accrued Interest Securities issued pursuant to the
second paragraph of Section 2 of the Securities) registered in the name of the
Depositary or the nominee of the Depositary and shall deliver such Global
Securities to the Depositary or pursuant to the Depositary's instructions. Such
order shall specify the amount of the Global Securities to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$160,000,000 (plus the principal amount of any Accrued Interest Securities
issued pursuant to the second paragraph of Section 2 of the Securities) except
as provided in Section 2.7. The Securities shall be issued in fully registered
form, without coupons in Authorized Denominations.
<PAGE>
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"), at least one of each such office
to be located in the City of New York. The Registrar shall keep a register of
the Securities and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. 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 such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Securities.
SECTION 2.4. Deposit of Moneys; Paying Agent To Hold Money in Trust. Prior
to 11:00 a.m. New York City time on each due date of the principal and interest
on any Security, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary of the
Company acts as Paying Agent, it shall segregate the money held by it as Paying
Agent 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 to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
<PAGE>
SECTION 2.5. Securityholder 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 Securityholders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(1) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. No service charge shall
be made for any registration of transfer or exchange of Securities, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any transfer or exchange pursuant
to this Section.
Prior to the due presentation for registration of transfer of any Security,
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary. Furthermore, any Holder of a Global Security
shall, by acceptance of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Depositary (or its agent), and that ownership of a
beneficial interest in the Global Security shall be required to be reflected in
a book entry.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Securities and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
<PAGE>
All Securities issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
SECTION 2.7. Book-Entry Provisions for Global Securities. (a) The Global
Securities initially shall (i) be registered in the name of the Depositary or
the nominee of the Depositary and (ii) be delivered to the Trustee as custodian
for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under any Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute legal owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 2.6.
(c) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.8. Certificated Securities. If the Depositary is at any time
unwilling or unable to continue as a depositary for the Global Security and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue certificated Securities in exchange for the Global Securities. In
connection with the execution and delivery of such certificated Securities, the
Trustee shall reflect on its books and records a decrease in the principal
amount of the relevant Global Security equal to the aggregate principal amount
of such certificated Securities and the Company shall execute and the Trustee
shall, upon receipt of a written order of the Company signed by two officers,
authenticate and deliver one or more certificated Securities in an equal
aggregate principal amount.
<PAGE>
SECTION 2.9. Replacement Securities. If a mutilated Security is surrendered
to the Registrar or if the Holder of a Security claims that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee or the Company. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.10. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal of, and premium, if any, and interest payable on, that date with
respect to the Securities (or portions thereof) to be redeemed or maturing, as
the case may be, then on and after that date such Securities (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Subsidiary thereof or by any other Affiliate controlled
by the Company shall be considered as though not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which the Trustee
actually knows are so owned shall be so disregarded.
<PAGE>
In determining whether the Holders of the required principal amount of
Securities have (i) directed the time, method or place of conducting any
proceeding for any remedy available to the Trustee hereunder, or exercising any
trust or power conferred upon the Trustee; (ii) consented to the waiver of any
past Event of Default and its consequences; or (iii) consented to the
postponement of any interest payment, Securities owned by Affiliates of the
Company shall be disregarded and considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee actually knows are so owned shall be so disregarded. The Company shall
notify the Trustee in writing when it or any of its Affiliates purchases or
otherwise acquires Securities, of the aggregate principal amount of such
Securities so purchased or otherwise acquired.
SECTION 2.11. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and, upon request, deliver such canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.13. Defaulted Interest. Any interest on any Security which is
payable, but is not punctually paid or duly provided for, on the dates and in
the manner provided in the Securities and this Indenture (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant record date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
<PAGE>
(i) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to
be given to each Holder, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities are registered
at the close of business on such special record date.
(ii) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.13, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
<PAGE>
SECTION 2.14. Record Date. The Company may set a record date for purposes
of determining the identity of Securityholders entitled to vote or to consent to
any action by vote or consent authorized or permitted by Sections 6.4 and 6.5.
Unless this Indenture provides otherwise, such record date shall be the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Securityholders furnished to the Trustee pursuant to Section 2.5
prior to such solicitation.
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may use
CUSIP numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as of convenience to Holders; provided,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE 3
Redemption
----------
SECTION 3.1. Notices to Trustee. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities or is required to redeem Securities
pursuant to paragraph 6 of the Securities, it shall notify the Trustee in
writing of the redemption date, the principal amount of Securities to be
redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days (or such lesser time as is acceptable to the Trustee)
but not more than 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
<PAGE>
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or, at the discretion of the Trustee, by a method
that complies with applicable legal and securities exchange requirements, if
any, and that the Trustee considers fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
Authorized Denominations. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.3. Notice of Redemption. At least 15 days but not more than 60
days before a date for redemption of Securities, the Company shall mail, or
cause to be mailed, a notice of redemption by first-class mail to each Holder of
Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portions thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
<PAGE>
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the related interest payment date). Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
SECTION 3.5. Deposit of Redemption Price. Prior to 11:00 a.m. New York City
time on the redemption date, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest (subject to the right of Holders of record on the relevant record date
to receive interest due on the related interest payment date) on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.1. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (other than the Company or a Wholly Owed Subsidiary acting as paying
agent) holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
<PAGE>
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 4.2. SEC Reports. The Company shall file the annual report and
other documents, reports and information required by Section 13 or 15(d) of the
Exchange Act with the SEC and, upon such filing, the Company shall (i) promptly
furnish such reports, documents and information to the Trustee and (ii) within
15 days after such filing with the SEC, furnish, or cause the Trustee to
furnish, such reports, documents and information to the Securityholders. The
Company shall use its best efforts to remain subject to the periodic reporting
requirements of Section 13 of the Exchange Act. In the event the Company is no
longer subject to the periodic reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC and furnish to the Trustee
and to the Securityholders the annual reports and other documents, reports and
information as if it were subject to such reporting requirements; provided,
however, that the Company shall not be so obligated to file such reports,
documents and information with the SEC if the SEC does not permit or accept such
filings, in which event such reports, documents and information shall be
provided to the Trustee and the Holders at the times the Company would have been
required to provide such reports, documents and information had it continued to
have been subject to such reporting requirements. The Company also shall comply
with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Indebtedness. (a) The Company shall not,
directly or indirectly, Incur any Indebtedness unless (i) no Default or Event of
Default shall have occurred and be continuing at the time of such Incurrence or
would occur as a consequence of such Incurrence and (ii) such Indebtedness is
Permitted Indebtedness under Section 4.3(b).
(b) "Permitted Indebtedness" means:
(i) Indebtedness to be outstanding immediately after the Issue Date
and listed on Schedule I to this Indenture;
(ii) Indebtedness represented by the Securities;
<PAGE>
(iii) Indebtedness Incurred by the Company and ranking on a parity
with, or subordinated to, the Securities if, after giving pro forma effect
to such Incurrence, the Consolidated Coverage Ratio would be equal to at
least 1.75 to 1;
(iv) Indebtedness (A) under Interest Rate Protection Agreements
relating to Indebtedness permitted hereunder entered into in the ordinary
course of the Company's financial management and not for speculative
purposes; provided, however, that the notional amount of each such Interest
Rate Protection Agreement does not exceed the principal amount of the
Indebtedness to which such Interest Rate Protection Agreement relates; or
(B) under Currency Exchange Protection Agreements entered into in the
ordinary course of the Company's financial management and not for
speculative purposes; provided, however, in the case of either clause (A)
or (B), any such Interest Rate Protection Agreement or Currency Exchange
Protection Agreement, as the case may be, does not increase the
Indebtedness of the Company outstanding at any time other than as a result
of fluctuations in the interest rates or exchange rates, as the case may
be, or by reason of customary fees, indemnities and compensation payable
thereunder;
(v) Indebtedness owing to and held by any Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital
Stock that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or another Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the incurrence of such Indebtedness by the
issuer thereof;
(vi) Indebtedness Incurred in connection with a prepayment of
Securities pursuant to a Change of Control Offer; provided, however, that
the aggregate principal amount of such Indebtedness does not exceed 101% of
the aggregate principal amount of the Securities prepaid; provided,
further, however, that such Indebtedness (A) has an Average Life equal to
or greater than the remaining Average Life of the Securities and (B) does
not mature prior to the Stated Maturity of the Securities;
(vii) Indebtedness in respect of Purchase Money Indebtedness or
Capital Lease Obligations directly Incurred by the Company; provided,
however, that the sum of (A) the aggregate principal amount of Purchase
Money Indebtedness incurred by the Company or by Restricted Subsidiaries as
permitted under Section 4.4(b)(ii) and (B) the aggregate amount of Capital
Lease Obligations Incurred by the Company or Incurred by Restricted
Subsidiaries as permitted under Section 4.4(b)(ii) does not at any one time
outstanding exceed $20,000,000 (such maximum permitted amount to increase
by $10,000,000 on each anniversary of the Issue Date);
<PAGE>
(viii) Indebtedness Incurred (A) in the ordinary course of business of
the Company with respect to trade credit made available to the Company in
connection with the obtaining of goods or services by the Company
(including commercial letters of credit, bankers' acceptances or
accommodation Guarantees for the benefit of trade creditors or suppliers),
in each case for a period not to exceed 180 days, in an amount not to
exceed the purchase price for the goods or services for which such credit
is made available and which do not constitute obligations for borrowed
money, and (B) with respect to standby letters of credit, performance bonds
and surety bonds that do not constitute obligations for borrowed money
Incurred by the Company in the ordinary course of business relating to
services to be performed by or on behalf of the Company;
(ix) Indebtedness in respect of Guarantees by the Company of
Indebtedness of any Restricted Subsidiary permitted to be Incurred under
Section 4.4(b);
(x) Indebtedness represented by the Senior Secured Notes in an
aggregate principal amount not to exceed $112,190,000, less, at any
specified date, an amount equal to actual repayments of the Senior Secured
Notes prior to such date, regardless of any subsequent increase in the
aggregate principal amount of the Senior Secured Notes pursuant to any
amendment or modification of, or supplement to, the Senior Secured Notes or
the Senior Indenture after the Issue Date;
(xi) Indebtedness Incurred by the Company which ranks senior to the
Securities and is not subordinated to any Indebtedness of the Company if,
after giving pro forma effect to such Incurrence, (i) the Consolidated
Coverage Ratio would be equal to at least 2.5 to 1 or (ii) the total
principal amount of Senior Debt would not exceed $80,000,000.
(xii) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i), (ii), (vi) or (x) above; and
(xiii) in addition to any Indebtedness permitted by clauses (i)
through (xii) above, up to an aggregate of (A) $25,000,000 in principal
amount of Indebtedness at any one time outstanding minus (B) the principal
amount of Indebtedness at such time outstanding of any Restricted
Subsidiaries permitted pursuant to Section 4.4(b)(vi).
<PAGE>
(c) The Company shall not directly or indirectly Incur any Indebtedness if
the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations.
(d) For purposes of determining the outstanding principal amount of any
particular Indebtedness Incurred pursuant to this Section or Section 4.4, (1)
Indebtedness permitted by this Section or Section 4.4 need not be permitted
solely by reference to one provision permitting such Indebtedness but may be
permitted in part by one such provision and in part by one or more other
provisions of this Section or Section 4.4 permitting such Indebtedness and (2)
in the event that Indebtedness or any portion thereof meets the criteria of more
than one of the types of Indebtedness described in this Section or Section 4.4,
the Company, in its sole discretion, shall classify such Indebtedness and only
be required to include the amount of such Indebtedness in one of such types.
(e) For purposes of determining whether the principal amount of any
Refinancing Indebtedness permitted by this Section or Section 4.4 does not, in
the event it is issued in a currency different from the currency in which the
Indebtedness being refunded or refinanced or paid at maturity ("Refinanced
Indebtedness") was issued, exceed the principal amount of the Refinanced
Indebtedness, the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
"Currency Trading" on the date two Business Days prior to such determination,
shall be used. If The Wall Street Journal does not publish such spot rate on
such date, then the spot rate for the purchase of the currency of the Refinanced
Indebtedness with the currency of the Refinancing Indebtedness, as quoted by
Citibank, N.A., or any successor thereto, in New York City at approximately
11:00 a.m. (New York time) on the date two Business Days prior to such
determination, shall be used.
Except as provided in the preceding paragraph, for purposes of determining
the Dollar Equivalent of any Indebtedness denominated in a currency other than
U.S. dollars outstanding at any time as permitted by this Section or Section
4.4, such Dollar Equivalent shall be the Dollar Equivalent of such currency at
the date such Indebtedness is issued; provided, however, that if such
Indebtedness constituted Refinancing Indebtedness, such conversion shall be made
based on the Dollar Equivalent of the Refinanced Indebtedness at the date of the
issuance of the Refinanced Indebtedness (or any preceding Refinanced
Indebtedness, as applicable).
<PAGE>
SECTION 4.4. Limitation on Restricted Subsidiary Indebtedness and Preferred
Stock. (a) The Company shall not permit any Restricted Subsidiary to, directly
or indirectly, Incur any Indebtedness or issue any Preferred Stock unless (i) no
Default or Event of Default shall have occurred and be continuing at the time of
such Incurrence or would occur as a consequence of such Incurrence and (ii) such
Indebtedness or Preferred Stock is Permitted Restricted Subsidiary Indebtedness
under Section 4.4(b).
(b) "Permitted Restricted Subsidiary Indebtedness" means:
(i) Indebtedness or Preferred Stock to be outstanding immediately
after the Issue Date and listed on Schedule I to this Indenture;
(ii) Indebtedness in respect of Purchase Money Indebtedness or Capital
Lease Obligations directly Incurred by any Restricted Subsidiary; provided,
however, that the sum of (A) the aggregate amount of Capital Lease
Obligations Incurred by Restricted Subsidiaries or Incurred by the Company
pursuant to Section 4.3(b)(vii) and (B) the aggregate principal amount of
Purchase Money Indebtedness Incurred by Restricted Subsidiaries or Incurred
by the Company pursuant to Section 4.3(b)(vii) does not at any one time
outstanding exceed $20,000,000 (such maximum permitted amount to increase
by $10,000,000 on each anniversary of the Issue Date);
(iii) Indebtedness incurred (A) in the ordinary course of business of
any Restricted Subsidiary with respect to trade credit made available to
such Restricted Subsidiary in connection with the obtaining of goods or
services by such Restricted Subsidiary (including commercial letters of
credit, bankers' acceptances or accommodation Guarantees for the benefit of
trade creditors or suppliers), in each case for a period not to exceed 180
days, in an amount not to exceed the purchase price for the goods or
services for which such credit is made available and which do not
constitute obligations for borrowed money and (B) standby letters of
credit, performance bonds and surety bonds that do not constitute
obligations for borrowed money Incurred by any Restricted Subsidiary' in
the ordinary course of business relating to services to be performed by or
on behalf of such Restricted Subsidiary;
<PAGE>
(iv) Indebtedness (A) under Interest Rate Protection Agreements
relating to Indebtedness permitted hereunder entered into in the ordinary
course of any Restricted Subsidiary's financial management and not for
speculative purposes; provided, however, that the notional amount of each
such Interest Rate Protection Agreement does not exceed the principal
amount of the Indebtedness to which such Interest Rate Protection Agreement
relates; or (B) under Currency Exchange Protection Agreements entered into
in the ordinary course of any Foreign Subsidiary's financial management and
not for speculative purposes; provided, however, in the case of either
clause (A) or (B), any such Interest Rate Protection Agreement or Currency
Exchange Protection Agreement, as the case may be, does not increase the
Indebtedness of such Subsidiary outstanding at any time other than as a
result of fluctuations in the interest rates or exchange rates, as the case
may be, or by reason of customary fees, indemnities and compensation
payable thereunder;
(v) Indebtedness or Preferred Stock owing to and held by the Company
or any Wholly Owned Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of any such Indebtedness or Preferred Stock (except to the Company
or a Wholly Owned Subsidiary) shall be deemed, in each case, to constitute
the incurrence of such Indebtedness or Preferred Stock by the issuer
thereof;
(vi) Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) above; and
(vii) in addition to any Indebtedness permitted by clauses (i) through
(v) above, up to an aggregate of $10,000,000 in principal amount of
Indebtedness of Foreign Restricted Subsidiaries at any one time
outstanding.
SECTION 4.5. Limitation on Restricted Payments. (a) The Company shall not,
and shall not permit any Restricted Subsidiary, to, directly or indirectly, (i)
declare or pay any dividend on, or make any distribution on or in respect of,
its Capital Stock (including any payment in connection with any merger or
consolidation involving the Company), except dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase such Capital Stock and except dividends or
distributions payable solely to the Company or any Restricted Subsidiary, (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of the
Company or any Restricted Subsidiary held by Persons other than the Company or a
Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value (including pursuant to mandatory repurchase
covenants), prior to any scheduled repayment, scheduled sinking fund payment or
other scheduled maturity, any Subordinated Obligation or (iv) make any
Investment (other than a Permitted Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to as a "Restricted Payment"), if
at the time of and after giving effect to the proposed Restricted Payment:
<PAGE>
(1) a Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.3(b)(iii); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be evidenced by a Board Resolution furnished to the Trustee) declared
or made since the Issue Date, would exceed, without duplication, the sum
of:
(A) an amount equal to 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) beginning on the
first day of the fiscal quarter of the Company immediately following
the fiscal quarter in which the Issue Date occurs and ending on the
last day of the Company's last fiscal quarter ended at least 45 days
prior to the date of such proposed Restricted Payment (or, if such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit) and minus 100% of the amount of any write-downs, writeoffs,
other negative revaluations and other negative extraordinary charges
not otherwise reflected in Consolidated Net Income during such period;
(B) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock, including Capital Stock of the
Company issued upon conversion of convertible debt or the exercise of
options, warrants or rights to purchase Capital Stock of the Company,
but excluding Disqualified Stock, subsequent to the Issue Date (other
than an issuance or sale to (i) a Subsidiary of the Company, (ii) an
employee stock ownership plan or other trust established by the
Company or any of its Subsidiaries or (iii) management employees);
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the Company or its
Restricted Subsidiaries convertible or exchangeable for Capital Stock
(other than Disqualified Stock) of the Company (less the amount of any
cash or other property distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange); and
<PAGE>
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of loans or advances or other transfers of assets to the
Company or any Restricted Subsidiary from Unrestricted Subsidiaries or
(ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investment") not to exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made (and treated as
a Restricted Payment) by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary.
(b) The provisions of Section 4.5(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company or
Subordinated Obligations made in exchange for, or out of the proceeds of a
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or other
trust established by the Company or any of its Subsidiaries) or out of
proceeds of an equity contribution made substantially concurrently with
such purchase or redemption; provided, however, that (A) such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall be excluded
from the calculation of amounts under Section 4.5(a)(3)(B);
(ii) any purchase or redemption of Subordinated Obligations made in
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to Section 4.3; provided, however, that (A) such Indebtedness is Incurred
in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the
aggregate sum of (1) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of
such Subordinated Obligations being so purchased or redeemed and (2) any
premiums, fees and other expenses paid by the Company or any Restricted
Subsidiary in connection with such purchase or redemption, (B) such
Indebtedness is at least as subordinated to the Securities as such
Subordinated Obligations so purchased or redeemed and the covenants
relating to such Indebtedness are no more restrictive in the aggregate than
those of such Subordinated Obligations, (C) such Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of such Subordinated
Obligations, (D) such Indebtedness has an Average Life at the time such
Indebtedness is Incurred equal to or greater than the Average Life of such
Subordinated Obligations and (E) such purchase or redemption shall be
excluded in the calculation of the amount of Restricted Payments;
<PAGE>
(iii) any payment in cash in lieu of the issuance of fractional shares
of Capital Stock to any Holder of Capital Stock warrants of the Company
outstanding on the Issue Date pursuant to the exchange of such warrants for
other Capital Stock of the Company upon the exercise of such warrants
pursuant to the terms thereof; provided, however, that such payment shall
be excluded in the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.5(a); provided, however, that at the time of payment of such
dividend, no other Default shall have occurred and be continuing (or result
therefrom); provided, further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments from and
after the date of declaration of such dividend; or
(v) so long as no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof, the redemption or
repurchase of Capital Stock of the Company, options in respect thereof or
related rights pursuant to and in accordance with the repurchase provisions
of any employee stock option or any stock purchase or other agreement
between the Company and any of its management employees; provided, however,
that such redemptions or repurchases pursuant to this Section 4.5(b)(v)
from and after the Issue Date shall not in the aggregate exceed $1,000,000,
plus the amount of any net cash proceeds to the Company from sales of
Capital Stock of the Company to management employees subsequent to the
Issue Date.
SECTION 4.6. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on or
in respect of its Capital Stock to the Company or any Restricted Subsidiary or
pay any Indebtedness owed to the Company or any Restricted Subsidiary, (ii) make
loans or advances to the Company or (iii) transfer any of its property or assets
to the Company or any Restricted Subsidiary, except for:
(a) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date;
<PAGE>
(b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary became a Subsidiary of, or was acquired by, the
Company (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary of, or was acquired
by, the Company) and outstanding on such date;
(c) any encumbrance or restriction pursuant to an agreement relating
to an acquisition of property, so long as the encumbrances or restrictions
in such agreement relate solely to the property so acquired;
(d) any encumbrance or restriction pursuant to an agreement effecting
a refinancing of Indebtedness Incurred pursuant to an agreement referred to
in clause (a), (b) or (c) or contained in any amendment to any such
agreement; provided, however, that any encumbrance and any restriction
contained in any such refinancing agreement or amendment is no less
favorable to the Securityholders than any encumbrance or restriction
contained in such agreement; and
(e) in the case of clause (iii), any encumbrance or restriction (1)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is a lease, license, conveyance or contract
or similar property or asset, (2) arising by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (3) arising or agreed to in the
ordinary course of business and that does not, individually or in the
aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or such
Restricted Subsidiary.
SECTION 4.7. Limitation on Sales of Assets and Restricted Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
make any Asset Disposition unless (i) the Company or such Restricted Subsidiary,
as the case may be, receives consideration at the time of such Asset Disposition
at least equal to the Fair Market Value of the shares, property and assets
subject to such Asset Disposition, (ii) at least 75% of such consideration (or,
in the event of any Asset Disposition of all or any portion of the Company's
Magnetics Division or a Foreign Subsidiary, at least 50% of such consideration)
consists of cash, Temporary Cash Investments or the assumption of Senior
Indebtedness of the Company or any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability under such Senior
Indebtedness, (iii) in connection with any Asset Disposition with an aggregate
<PAGE>
consideration greater than $10,000,000, the Company delivers an Officers'
Certificate to the Trustee certifying that such Asset Disposition complies with
clauses (i) and (ii) and that such Asset Disposition was approved by a majority
of the Board of Directors including a majority of the disinterested members of
the Board of Directors, as evidenced by a Board Resolution delivered to the
Trustee and (iv) 100% of the Net Cash Proceeds of such Asset Disposition are
applied as follows: (A) within 365 days of receipt thereof (or within such
longer period after receipt thereof as may be permitted by the terms of the
Senior Indenture)(the last day of such period, the "Application Date"), the
Company or such Restricted Subsidiary, as the case may be, may apply all or a
portion of such Net Cash Proceeds to the repayment of the Senior Secured Notes
or the reinvestment (whether by acquisition of an existing business or
expansion, including, without limitation, capital expenditures) in one or more
Permitted Lines of Business, or any combination thereof, and (B) to the extent
any or all of such Net Cash Proceeds are not applied as set forth above in
clause (A), the Company shall apply all remaining Net Cash Proceeds of such
Asset Disposition (the "Asset Disposition Purchase Amount") to an offer to
purchase (an "Asset Disposition Purchase Offer") Securities, on the first
Business Day occurring 60 Business Days after the Application Date (the "Asset
Disposition Purchase Date") for cash at a purchase price (such price, the "Asset
Disposition Purchase Price") equal to 100% of the principal amount of the
Securities so purchased plus accrued and unpaid interest thereon to the Asset
Disposition Purchase Date, in accordance with the procedures set forth in
Section 4.7(c). Any such Net Cash Proceeds which remain after the acquisition by
the Company of Securities tendered (and not withdrawn) by Securityholders
pursuant to such Asset Disposition Purchase Offer in accordance with the
procedures (including proration in the event of oversubscription) set forth in
Section 4.7(c) shall cease to be Net Cash Proceeds.
(b) Notwithstanding the foregoing, the Company shall not be required to
make an Asset Disposition Purchase Offer until such time as the aggregate amount
of Net Cash Proceeds from Asset Dispositions required to be so applied to the
purchase of Securities pursuant to Section 4.7 (a) exceeds $10,000,000 (the
"Asset Disposition Trigger"), and then the total amount of such Net Cash
Proceeds shall be required to be applied to an Asset Disposition Offer.
<PAGE>
(c) Within 30 Business Days of the occurrence of an Asset Disposition
Trigger, (i) the Company shall notify the Trustee in writing of the Asset
Disposition Trigger and shall make the Asset Disposition Purchase Offer to
purchase Securities in an aggregate principal amount equal to the Asset
Disposition Purchase Amount at the Asset Disposition Purchase Price on or before
the Asset Disposition Purchase Date, (ii) the Company shall mail a copy of the
Asset Disposition Purchase Offer to each Securityholder and (iii) the Company
shall cause a notice of the Asset Disposition Purchase Offer to be sent to the
Dow Jones News Service or similar business news service in the United States of
America. The Asset Disposition Purchase Offer shall remain open from the time
such offer is made until the Asset Disposition Purchase Date. The Company shall
purchase all Securities properly tendered pursuant to the Asset Disposition
Purchase Offer and not withdrawn in accordance with the procedures set forth in
the Asset Disposition Purchase Notice (as defined below). The Trustee shall be
under no obligation to ascertain, and the Trustee shall not be deemed to have
knowledge of, the occurrence of an Asset Disposition Trigger or to give notice
with respect thereto other than as provided above upon receipt of notice of the
occurrence of an Asset Disposition Trigger and an Asset Disposition Purchase
Offer from the Company. The Trustee may conclusively assume, in the absence of
receipt of notice of the occurrence of an Asset Disposition Trigger and an Asset
Disposition Purchase Offer from the Company, that no Asset Disposition Trigger
has occurred. The Asset Disposition Purchase Offer shall include a form of Asset
Disposition Purchase Notice to be completed by the Securityholder and shall
state or provide:
(1) the nature of the Asset Dispositions resulting in the Asset
Disposition Trigger, the date or dates such Asset Dispositions occurred and
the amount of the Asset Disposition Purchase Amount;
(2) that the Asset Disposition Purchase Offer is being made pursuant
to this Section 4.7(c) and that Securities in an aggregate principal amount
equal to the Asset Disposition Purchase Amount, selected in accordance with
this Indenture (if more than such amount shall be tendered) on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so
that only Securities in Authorized Denominations shall be purchased) from
among all the Securities properly tendered pursuant to the Asset
Disposition Purchase Offer, will be accepted for payment;
(3) the date by which the Asset Disposition Purchase Notice pursuant
to this Section 4.7(c) must be given;
(4) the Asset Disposition Purchase Date;
(5) the Asset Disposition Purchase Price;
(6) the name and address of the Paying Agent;
(7) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
<PAGE>
(8) information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum shall include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports) and (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such Reports.
(9) that the Asset Disposition Purchase Price for any Security as to
which an Asset Disposition Purchase Notice has been duly given and not
withdrawn (subject to proration if Securities with an aggregate principal
amount greater than the Asset Disposition Purchase Amount are so tendered)
will be paid promptly upon the later to occur of the third Business Day
following the Asset Disposition Purchase Date and the time of surrender of
such Security as described in clause (7);
(10) the procedures the Holder must follow to accept the Asset
Disposition Purchase Offer; and
(11) the procedures for withdrawing an Asset Disposition Purchase
Notice.
(d) A Holder may accept an Asset Disposition Purchase Offer by delivering
to the Paying Agent at the office of the Paying Agent a written notice (an
"Asset Disposition Purchase Notice") at any time prior to the close of business
in the location of the office of the Paying Agent on the Asset Sale Purchase
Date, stating:
(1) that such Holder elects to have a Security purchased pursuant to
the Asset Disposition Purchase Offer;
(2) the principal amount of the Security that the Holder elects to
have purchased by the Company, which amount must be in an Authorized
Denomination, and the certificate numbers of the Securities to be delivered
by such securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Asset Disposition
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
<PAGE>
The delivery of such Security (together with all necessary endorsements, as
determined by the Company) to the Paying Agent at the office of the Paying Agent
prior to, on or after the Asset Disposition Purchase Date shall be a condition
to the receipt by the Holder of the Asset Disposition Purchase Price therefor;
provided, that such Asset Disposition Purchase Price shall be so paid pursuant
to this Section 4.7(d) only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof set forth in the
related Asset Disposition Purchase Notice. If at the expiration of the Asset
Disposition Purchase Offer the aggregate principal amount of Securities
surrendered by Holders exceeds the Asset Disposition Purchase Amount, the
Company or the Trustee shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so that
only Securities in Authorized Denominations shall be purchased). Holders whose
Securities are purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to an Asset
Disposition Purchase Offer made in accordance with this Section 4.7, a portion
of a Security if the principal amount of such portion is an Authorized
Denomination. Provisions of this Indenture that apply to the purchase of all of
a Security also apply to the purchase of a portion of such Security.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Asset Disposition Purchase Notice or written notice of withdrawal thereof.
Upon receipt by the Paying Agent of the Asset Disposition Purchase Notice,
the Holder of the Security in respect of which such Asset Disposition Purchase
Notice was given shall (unless such Asset Disposition Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Asset Disposition Purchase Price with respect to such
Security (subject to proration if Securities with an aggregate principal amount
greater than the Asset Disposition Purchase Amount are properly tendered). Such
Asset Disposition Purchase Price shall be paid to such Securityholder by the
Paying Agent promptly upon the later of (a) the third Business Day following the
Asset Disposition Purchase Date (provided the conditions in this Section 4.7(d)
have been satisfied) and (b) the first Business Day following the time of
delivery of the Security to the Paying Agent at the office of the Paying Agent
by the Holder thereof in the manner required by this Section 4.7(d).
<PAGE>
An Asset Disposition Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Asset Disposition Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Asset Disposition Purchase
Notice was delivered at any time prior to the close of business on the Asset
Disposition Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be an Authorized
Denomination) with respect to which such notice of withdrawal is being
submitted; and
(3) the principal amount, if any, of such Security (which shall be an
Authorized Denomination) that remains subject to the original Asset
Disposition Purchase Notice and that has been or will be delivered for
purchase by the Company.
No later than the date upon which written notice of an Asset Disposition
Purchase Offer is delivered to the Trustee, the Company shall cause to be
irrevocably deposited with the Paying Agent, subject to the provisions of
Section 2.4, in cash or Temporary Cash Investments an amount sufficient to pay
the aggregate Asset Disposition Purchase Price, to be held for payment in
accordance with the provisions of this Section.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.8. Limitation on Transactions with Affiliates. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, conduct any business, enter into or permit to exist any transaction
(including, without limitation, the sale, conveyance, disposition, purchase,
exchange or lease of any property, the lending the borrowing or advancing of any
money or the rendering of any services) with, or for the benefit of, any
Affiliate of the Company (an "Affiliate Transaction") unless (i) the terms of
such Affiliate Transaction are set forth in writing, (ii) such Affiliate
Transaction is in the best interest of the Company or such Restricted
<PAGE>
Subsidiary, as the case may be, (iii) such Affiliate Transaction is on terms as
favorable to the Company or such Restricted Subsidiary, as the case may be, as
those that could be obtained at the time of such Affiliate Transaction for a
similar transaction in arm's length dealings with a Person who is not such an
Affiliate and (iv) with respect to each Affiliate Transaction involving
aggregate payments or value in excess of $500,000, the Company delivers to the
Trustee an Officers' Certificate certifying that such Affiliate Transaction was
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, as evidenced by a Board
Resolution, and that such Affiliate Transaction complies with clauses (ii) and
(iii), such Board Resolution to be dated within 30 days of such Affiliate
Transaction.
(b) The provisions of Section 4.8(a) shall not prohibit (i) any Restricted
Payment permitted to be paid pursuant to Section 4.5, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors, (iii) loans or advances
permitted under this Indenture to employees in the ordinary course of business
in accordance with past practices of the Company, (iv) the payment of reasonable
fees to directors of the Company and its Restricted Subsidiaries who are not
employees of the Company or of Restricted Subsidiaries, (v) any transaction
between the Company and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries or (vi) reasonable and customary indemnification arrangements
between the Company or any Restricted Subsidiary and their respective directors
and officers pursuant to which the Company or any such Restricted Subsidiary
agrees to indemnify such directors and officers against losses and expenses
incurred by such directors and officers in connection with their service to the
Company or such Restricted Subsidiary, as the case may be (to the extent that
such indemnification arrangements are permitted under applicable law).
SECTION 4.9. Change of Control. (a) Upon a Change of Control, (i) the
Company shall notify the Trustee, who shall in turn notify the Holders, in
writing of the occurrence of the Change of Control and shall make an offer to
purchase (the "Change of Control Offer") the Securities for cash at a purchase
price equal to 101% of the principal amount thereof plus any accrued and unpaid
interest thereon (collectively the "Change of Control Purchase Price") to the
Change of Control Purchase Date (as defined below) on or before the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 Business Days after the occurrence of the Change of Control (the
"Change of Control Purchase Date"), (ii) the Company shall, or shall cause the
Trustee to, mail a copy of the Change of Control Offer to each Holder and (iii)
the Company shall cause a notice of the Change of Control Offer to be sent at
least once to the Dow Jones News Service and The Bloomberg Business News Service
<PAGE>
or, if such news services no longer publish such notices, a similar business
news service in the United States. The Change of Control Offer shall remain open
from the time such offer is made until the Change of Control Purchase Date The
Company shall purchase all Securities properly tendered in the Change of Control
Offer and not withdrawn in accordance with the procedures set forth in Section
4.9(b). The Trustee shall be under no obligation to ascertain, and the Trustee
shall not be deemed to have knowledge of, the occurrence of a Change of Control
or to give notice with respect thereto other than as provided above upon receipt
of a Change of Control Offer from the Company The Trustee may conclusively
assume, in the absence of receipt of a Change of Control Offer from the Company,
that no Change of Control has occurred. The Change of Control Offer shall
include a form of change of control purchase notice (the "Change of Control
Purchase Notice") to be completed by the Holder and shall state:
(1) the events causing a Change of Control and the date such Change of
Control is deemed to have occurred;
(2) the circumstances and relevant facts regarding such Change of
Control which the Company in good faith believes will enable Holders to
make an informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited financial
statements) of the Company, the most recent subsequently filed Quarterly
Report on Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, (ii) a description of material
business developments in the Company's business subsequent to the date of
the latest of such Reports and (iii) information with respect to pro forma
historical income, cash flow and capitalization, each after giving effect
to such Change of Control, events causing such Change of Control and the
date such Change of Control is deemed to have occurred);
(3) that the Change of Control Offer is being made pursuant to this
Section 4.9(a) and that all Securities properly tendered pursuant to the
Change of Control Offer will be accepted for payment;
(4) the date by which the Change of Control Purchase Notice pursuant
to this Section 4.9 must be given;
(5) the Change of Control Purchase Date;
(6) the Change of Control Purchase Price;
(7) the name and address of the Paying Agent;
<PAGE>
(8) that Securities must be surrendered to the Paying Agent at the
office of the Paying Agent to collect payment;
(9) that the Change of Control Purchase Price for any Security as to
which a Change of Control Purchase Notice has been duly given and not
withdrawn will be paid promptly upon the later of the first Business Day
following the Change of Control Purchase Date and the time of surrender of
such Security as described in clause (8);
(10) the procedure the Securityholder must follow to accept the Change
of Control Offer; and
(11) the procedures for withdrawing a Change of Control Purchase
Notice.
(b) A Securityholder may accept a Change of Control Offer by delivering to
the Paying Agent at the office of the Paying Agent a Change of Control Purchase
Notice at any time prior to the close of business in the location of the office
of the Paying Agent on the Change of Control Purchase Date, stating:
(1) that such Securityholder elects to have a Security purchased
pursuant to the Change of Control Offer;
(2) the principal amount of the Security that the Securityholder
elects to have purchased by the Company, which amount must be an Authorized
Denomination, and the certificate numbers of the Securities to be delivered
by such Securityholder for purchase by the Company; and
(3) that such Security shall be purchased on the Change of Control
Purchase Date pursuant to the terms and conditions specified in this
Indenture.
The delivery of such Security (together with all necessary endorsements) to
the Paying Agent at the office of the Paying Agent prior to, on or after the
Change of Control Purchase Date shall be a condition to the receipt by the
Securityholder of the Change of Control Purchase Price therefor; provided, that
such Change of Control Purchase Price shall be so paid pursuant to this Section
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change of Control
Purchase Notice. Securityholders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to be unpurchased
portion of the Securities surrendered.
The Company shall purchase from the Holder thereof, pursuant to this
Section, a portion of a Security if the principal amount of such portion is an
Authorized Denomination. Provisions of this Indenture that apply to the Purchase
of all of a Security also apply to the Purchase of a portion of such Security.
<PAGE>
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change of Control Purchase Notice or written notice of withdrawal thereof.
Upon receipt by the Company of the Change of Control Purchase Notice, the
Holder of the Security in respect of which such Change of Control Purchase
Notice was given shall (unless such Change of Control Purchase Notice is
withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder
promptly upon the later of (a) the first Business Day following the Change of
Control Purchase Date (provided the conditions in this Section 4.9(b) have been
satisfied) and (b) the first Business Day following the time of delivery of the
Security to the Paying Agent at the office of the Paying Agent by the Holder
thereof in the manner required by this Section 4.9(b).
A Change of Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change of Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent to which the related Change of Control Purchase
Notice was delivered at any time prior to the close of business on the Change of
Control Purchase Date specifying, as applicable:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the principal amount of the Security (which shall be an Authorized
Denomination) with respect to which such notice of withdrawal is being
submitted; and
(3) the principal amount, if any, of such Security (which shall be an
Authorized Denomination) that remains subject to the original Change of
Control Purchase Notice and that has been or will be delivered for purchase
by the Company.
No later than the date upon which the Change of Control Offer is delivered
to the Trustee, the Company shall irrevocably deposit with the Paying Agent,
subject to the provisions of Section 2.4, in cash or Temporary Cash Investments
an amount equal to the Change of Control Purchase Price to the Holders entitled
thereto, to be held for payment in accordance with the provisions of this
Section.
<PAGE>
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.10. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
SECTION 4.11. Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.12. Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create or permit to
exist any Lien (other than Permitted Liens) on any of its property or assets
(including Capital Stock), whether owned on the Issue Date or thereafter
acquired, or any right, title or interest thereto, unless the Company or such
Restricted Subsidiary shall secure all payments hereunder and under the
Securities on an equal and ratable basis with the obligation so secured until
such time as such obligation is no longer secured by a Lien.
SECTION 4.13. Limitation on Sale/Leaseback Transactions. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
enter into, Guarantee or otherwise become liable with respect to any
Sale/Leaseback Transaction with respect to any property or assets unless (i) the
Company or such Restricted Subsidiary, as the case may be, would be entitled
under Section 4.3(b)(vii) to incur Indebtedness secured by a Permitted Lien on
such property or assets in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction, (ii) the net cash proceeds from such
Sale/Leaseback Transaction are at least equal to the Fair Market Value of the
property or assets subject to such Sale/Leaseback Transaction (such Fair Market
Value determined, in the event such property or assets have a Fair Market Value
in excess of $2,000,000, no more than 30 days prior to the effective date of
such Sale/Leaseback Transaction, by the Board of Directors including a majority
of the disinterested members of the Board of Directors, as evidenced by a Board
Resolution), and (iii) the net cash proceeds of such Sale/Leaseback Transaction
are applied in accordance with Section 4.7.
<PAGE>
SECTION 4.14. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company shall not permit (i) any Restricted
Subsidiary to issue any Capital Stock other than to the Company or a Wholly
Owned Subsidiary; or (ii) any Person (other than the Company or a Wholly Owned
Subsidiary) to, directly or indirectly, own or control any Capital Stock of any
Restricted Subsidiary (other than directors' qualifying shares); provided,
however, that clauses (i) and (ii) shall not prohibit (a) any sale of 100% of
the shares of the Capital Stock of any Restricted Subsidiary owned by the
Company or any Wholly Owned Subsidiary effected in accordance with Section 4.7,
or (b) any issuance of Preferred Stock of a Restricted Subsidiary to any Person
permitted under Section 4.4.
SECTION 4.15. Restricted and Unrestricted Subsidiaries. (a) The Board of
Directors may designate any Subsidiary of the Company or any Restricted
Subsidiary to be an Unrestricted Subsidiary if (i) the Subsidiary to be so
designated does not own any Capital Stock, Redeemable Stock or Indebtedness of,
or own or hold any Lien on any property or assets of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
by any Indebtedness or Lien that, if in default, would result (with the passage
of time or notice or otherwise) in a default on any Indebtedness of the Company
or any Restricted Subsidiary, and (iii) either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) such designation is
effective immediately upon such Person becoming a Subsidiary of the Company or
of a Restricted Subsidiary. Unless so designated as an Unrestricted Subsidiary,
any Person that becomes a Subsidiary of the Company or any Restricted Subsidiary
shall be classified as a Restricted Subsidiary. Except as provided in the first
sentence of this paragraph (a), no Restricted Subsidiary shall be redesignated
as an Unrestricted Subsidiary. Subject to Section 4.15(b), an Unrestricted
Subsidiary shall not be redesignated as a Restricted Subsidiary. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complies with the foregoing provisions.
<PAGE>
(b) The Company shall not, and shall not permit any Restricted Subsidiary
to, take any action or enter into any transaction or series of transactions that
would result in a Person becoming a Restricted Subsidiary (whether through an
acquisition, the redesignation of an Unrestricted Subsidiary or otherwise)
unless after giving effect to such action, transaction or series of
transactions, on a pro forma basis, (i) the Company could incur at least $1.00
of additional Indebtedness pursuant to Section 4.3(b)(iii), (ii) such Restricted
Subsidiary could then Incur under Section 4.4 all Indebtedness as to which it is
obligated at such time, (iii) no Default or Event of Default would occur or be
continuing and (iv) there exist no Liens with respect to the property or assets
of such Restricted Subsidiary other than Permitted Liens.
SECTION 4.16. Revisions to Schedules. Schedule III shall be revised from
time to time by the Company to accurately reflect all the U.S. Restricted
Subsidiaries, whether now existing or hereafter created, formed, designated or
acquired, and upon such revision a new Schedule III shall be delivered to the
Trustee.
SECTION 4.17. Maintenance of Properties; Insurance. The Company shall, and
shall cause each Restricted Subsidiary to, at all times:
(a) maintain all property and assets necessary in its business in good
working order and condition (ordinary wear and tear excepted), in
compliance with applicable regulations, laws or restrictions and supplied
with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all
as in the judgment of the Company may be necessary so its business may be
properly and advantageously conducted at all times; and
(b) maintain with recognized national or international insurance
companies, or through self-insurance programs, insurance on such of its
property and assets, and against such liabilities in at least such amounts,
against at least such risks and with such deductibles or self-insured
retentions as in each case are customarily insured against in the same
general area by companies engaged in the same or a similar business and
consistent with the past practices of the Company, and furnish to the
Trustee an Officers' Certificate specifying the nature of the insurance
carried and adequacy thereof at such times as it shall deliver to the
Trustee an Officers' Certificate pursuant to Section 4.10.
<PAGE>
SECTION 4.18. Corporate Existence. Subject to Article 5, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), registrations, licenses and franchises of the Company
and such Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license, registration or franchise, or the
corporate, partnership or other existence of any such Subsidiary, if the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries taken as a whole, and the loss thereof is not
adverse in any material respect to the Holders; provided, further, however, that
if such Subsidiary has more than a de minimis amount of assets, the Board of
Directors shall be required to make a determination to the foregoing effect.
SECTION 4.19. Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay, prior to delinquency, all taxes, assessments and
governmental levies, except as the same are being contested in good faith and by
appropriate proceedings or where the failure to pay would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole
SECTION 4.20. Conflicting Agreements. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any agreement or instrument, other
than the Senior Indenture, that by its terms expressly (i) prohibits the Company
from making any payments on the Securities required by the terms hereof and
thereof or (ii) making any Asset Disposition Purchase Offer or Change of Control
Offer, pursuant to Section 4.7 or 4.9, respectively.
ARTICLE 5
Successor Company
-----------------
The Company shall not, and the Company shall not permit any Restricted
Subsidiary to, enter into any transaction or series of transactions to
consolidate, amalgamate or merge with or into any other Person (other than the
merger of a Wholly Owned Subsidiary (i) with another Wholly Owned Subsidiary or
(ii) into the Company), or directly or indirectly through its Subsidiaries sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
its property and assets to any Person (other than to one or more Wholly Owned
Subsidiaries or to the Company) unless (i) if the Company is a party to such
transaction and is not the surviving entity (the "Surviving Entity"), the Person
formed by such consolidation or amalgamation or into which the Company is merged
or that acquires, by sale, conveyance, assignment, transfer, lease or other
disposition, all or substantially all the properties and assets of the Company
as an entirety, shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District or Columbia and
shall expressly assume (a) by a supplemental indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations of the
Company pursuant to the Securities and the Indenture and (b) by written
instruments executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under any agreements entered into by
<PAGE>
the Company to effectuate the provisions of Section 4.12 hereof; (ii) the
Surviving Entity, if any Restricted Subsidiary is a party to such transaction
and is not the Surviving Entity, shall by written instruments executed and
delivered to the Trustee, in form satisfactory to the Trustee, expressly assume
all the obligations of such Restricted Subsidiary under any agreements entered
into by such Restricted Subsidiary to effectuate the terms of Section 4.12
hereof; (iii) immediately before and after giving effect to such transaction or
series of transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Company, the Surviving Entity or any Restricted
Subsidiary as a result of such transaction or series of transactions as having
been incurred by the Company, such Surviving Entity or such Restricted
Subsidiary at the time of such transaction or series of transactions) no Default
or Event of Default shall have occurred and be continuing; (iv) immediately
after giving effect to such transaction or series of transactions on a pro forma
basis (and treating any Indebtedness which becomes an obligation of the Company,
the Surviving Entity or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been incurred by the Company,
such Surviving Entity or such Restricted Subsidiary at the time of such
transaction or series of transactions), the Company or the Surviving Entity, as
the case may be, could incur at least $1.00 of additional Indebtedness pursuant
to Section 4.3(b)(iii); (v) immediately after giving effect to such transaction
or series of transactions on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the Company, the Surviving Entity or any
Restricted Subsidiary as a result of such transaction or series of transactions
as having been incurred by the Company, such Surviving Entity or such Restricted
Subsidiary at the time of such transaction or series of transactions), the
Company or the Surviving Entity, as the case may be, shall have a Consolidated
Tangible Net Worth which is not less than the Consolidated Tangible Net Worth of
the Company immediately prior to such transaction or transactions; and (vi) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating (A) that such consolidation, amalgamation,
merger or transfer and such supplemental indenture (if any) and written
instrument (if any) comply with this Indenture and (B) that upon execution and
delivery of such supplemental indenture or written instrument the Company or
such Surviving Entity shall be bound by the terms of this Indenture as thereby
amended and this Indenture as thereby amended shall be enforceable against the
Company or such Successor Entity in accordance with its terms.
Upon any transaction involving the Company in which the Company is not the
Surviving Entity, such Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the Company in the case of a transfer or lease shall not be
released from the obligation to pay the principal of, and premium, if any, or
interest on, the Securities.
<PAGE>
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company fails to make any payment of interest on any Security
when the same shall become due and payable, and such failure continues for
a period of 30 days;
(2) the Company (i) fails to make the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
its Stated Maturity, upon acceleration, redemption or declaration, or
otherwise or (ii) fails to redeem or purchase Securities when and to the
extent required pursuant to this Indenture or the Securities;
(3) the Company fails to comply with Article 5;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5, 4.6,
4.7, 4.8, 4.9, 4.12, 4.13, 4.14 or 4.20 (other than a failure to purchase
Securities when required under Section 4.7 or 4.9) and such failure
continues for 30 days after the notice specified below, or the Company
fails to give the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for a period of 60 days after the
notice specified below or the Company fails to give the notice specified
below;
(6) Principal of or interest on any Indebtedness of the Company or any
Restricted Subsidiary for borrowed money is not paid when due within any
applicable grace period or any Indebtedness of the Company or any
Restricted Subsidiary is accelerated by the Holders thereof, in each case,
if the total amount so unpaid when due within any applicable grace period
or accelerated exceeds $7,500,000 or its Dollar Equivalent at the time;
<PAGE>
(7) one or more judgments or decrees aggregating in excess of
$7,500,000 or its Dollar Equivalent at the time is rendered against the
Company or any Restricted Subsidiary and is not discharged and either: (A)
an enforcement proceeding has been commenced by any creditor upon such
judgment or decree; or (B) there is a period of 60 days following the entry
of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed;
(8) the Company or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by reason of the provisions of Article IX of this Indenture or by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body.
<PAGE>
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (4), (5), (6) or (7) above, its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.1(8) or (9) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in principal amount of the Securities by notice to the Trustee (who
shall promptly notify the Company), may declare the principal of and accrued
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.1(8) or (9) occurs, the principal of and interest
on all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
<PAGE>
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal (other than principal due by
reason of acceleration) of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.2 cannot be amended or waived
without the consent of each Securityholder affected. When a Default or Event of
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in principal
amount of the Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or by exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
<PAGE>
(3) such Holder or Holders offer to the Trustee security or indemnity
reasonably satisfactory to it against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, 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 6.8. Collection Suit by Trustee. If an Event of Default in payment
of interest or principal specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. 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 and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
<PAGE>
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in
principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully refrain from doing so) shall 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 wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
<PAGE>
ARTICLE 7
Trustee
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SECTION 7.1. Duties of Trustee. (a) If an Event of Default has occurred and
is continuing, the Trustee shall exercise 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
such Person's own affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that: (1) this paragraph does not limit the effect of paragraph (b) of this
Section; (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 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
<PAGE>
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely and shall be
protected in acting or in refraining from acting 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, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled, upon
reasonable notice to the Company, to examine the books, records and premises of
the Company, personally or by agent or attorney and to consult with the officers
and representatives of the Company, including the Company's accountants and
attorneys.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
<PAGE>
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred by it in compliance with such request, order or direction.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or
the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in the Indenture or in any document issued in connection with the
sale of the Securities or in the Securities other than the Trustee's certificate
of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), 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 interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA Section
313(a), as promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Securityholder a brief report dated as of
May 15 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 Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
<PAGE>
SECTION 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as shall be agreed to in writing
between the Company and the Trustee for its services. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
sale or otherwise in connection with this Indenture, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts and court costs. The Company shall indemnify
the Trustee, its officers, directors, employees and agents, against any and all
loss, liability damage, claim or expense (including reasonable attorneys' fees
and expenses), including taxes (other than taxes based on the income of the
Trustee) incurred by it in connection with the acceptance or administration of
this trust and the performance of its duties hereunder. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company (even though
the Securities may be subordinate to such other liability or indebtedness).
The Company's payment obligations pursuant to this Section and the Lien of
the Trustee referred to in the preceding paragraph shall survive the discharge
of this Indenture. When the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.1(8) or (9) with respect to the Company, the
expenses are intended to constitute expenses of administration under Bankruptcy
Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time by
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
<PAGE>
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
25% in principal amount of the Securities 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 Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
<PAGE>
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. No obligor upon the Securities or
Person directly controlling, controlled by or under common control with such
obligor shall serve as Trustee upon the Securities. The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b) (1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b) (1) are met.
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 subject to TIA Section 311(a) to the extent indicated.
<PAGE>
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a) When (i)
the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.9) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof,
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.9), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(c) and 8.6, cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c), 8.2 and 8.6, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.2 (to the
extent that the failure to comply with Section 4.2 shall not violate the TIA),
4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.12, 4.13 and 4.14, Article 5 and the
related operation of Sections 6.1(3), (4) and (5) and the operation with respect
to Restricted Subsidiaries of Sections 6.1(6), (7), (8) and (9) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.1(3), (4) or
(5) or an Event of Default with respect to a Restricted Subsidiary specified in
Sections 6.1(b), (7), (8) or (9).
<PAGE>
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b), the Company's obligations in
Sections 2.3, 2.4, 2.5, 2.6, 2.9, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive until
the Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.4, 8.5 and 8.6 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its legal
defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.1(8) or (9) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
<PAGE>
(7) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from the Internal Revenue Service a ruling or (ii) since the
date of this Indenture there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Securityholders will not
recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money or securities
held by them at any time.
<PAGE>
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee and the Paying Agent before being
required to make any payment may, but need not, 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 paid to the Company. After payment
to the Company, Securityholders entitled to the money must look to the Company
for payment as general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Company shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
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
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8.
ARTICLE 9
Subordination
-------------
SECTION 9.1. Securities Subordinated to Senior Indebtedness. The Company,
for itself and its successors, and each Holder, by its acceptance of Securities,
agrees that, notwithstanding anything to the contrary in Sections 6.1 and 6.2
hereof, the payment of the principal of, interest on or any other amounts due on
the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article 9, to the prior payment in full of all Senior
Indebtedness. Each Holder by its acceptance of the Securities authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness and
such Holder, the subordination provided in this Article 9.
<PAGE>
The expressions "prior payment in full," "payment in full" and "paid in
full" and any other similar term or phrase when used in this Article 9 with
respect to Senior Indebtedness shall mean the payment in full of such Senior
Indebtedness in cash or provision for such payment in cash or otherwise in a
manner satisfactory to the holders of the Senior Indebtedness.
This Article 9 shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and they
and/or each of them may enforce such provisions to the extent and in the manner
provided herein.
SECTION 9.2. No Payment on Securities in Certain Circumstances. (a) No
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the principal of,
premium (if any) or interest on the Securities, or in respect of any redemption,
retirement, defeasance, purchase or other acquisition of any of the Securities,
and no Holder of any Security shall be entitled to receive any such payment (any
of the foregoing payments or actions being referred to in this Section 9.2 as a
"Payment"), on or after the occurrence of any default in the payment of
principal or interest then due and payable in respect of any Senior Indebtedness
(either at maturity, upon redemption, by acceleration or otherwise), unless and
until such default has been waived or cured or all amounts then due and payable
for principal of and interest on all Senior Indebtedness shall have been paid in
full or provision therefor in cash, in cash equivalents, or in accordance with
the terms of such Senior Indebtedness and the agreements, if any, under which
such Senior Indebtedness was issued or created, shall have been made.
(b) The Company may not make any Payment if:
(i) a default or event of default under any agreement governing Senior
Indebtedness (other than a default or event of default relating to payment
of principal or interest, either at maturity, upon redemption, by
declaration or otherwise) has occurred and is continuing that permits the
holders of such Senior Indebtedness to accelerate its maturity (whether or
not such acceleration has occurred); and
(ii) the Company or the Trustee receives a notice of such default or
event of default from (i) the holders of a majority of the outstanding
principal amount of Indebtedness under the Senior Indentures or (ii) the
trustee representing such holders under the Senior Indenture; provided,
however, that only one such notice shall be given effect within any period
of 360 consecutive days; provided, further, that no more than one notice
may be given with respect to any continuing default or event of default.
<PAGE>
Notwithstanding the provisions of this Section 9.2(b), the Company may make
Payments on the Securities when:
(1) all defaults and events of default referred to in such
notice are cured or waived; or
(2) 179 days pass after such notice is given, with respect
to such defaults and/or events of default
so long as this Article 9 (including, without limitation, Section 9.2(a))
otherwise permits a Payment at that time.
(c) In the event that notwithstanding the provisions of this Section 9.2
the Company shall make any Payment to the Trustee or any Holder of the
Securities on account of the principal of or interest on the Securities after
receiving notice (as aforesaid) of the happening of a default or event of
default on Senior Indebtedness, then, unless and until such default or event of
default shall have been cured or waived or shall have ceased to exist either due
to the passage of time as aforesaid in Section 9.2(b)(ii)(2) or otherwise, such
payment (subject to the provisions of Sections 9.6 and 9.7) shall be held by the
Trustee or such Holder, in trust for the benefit of, and subject to Sections 9.6
and 9.7, shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness then in default held by them) or the trustee
under the Senior Indenture, as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any default
in the payment of principal of or interest on any Senior Indebtedness or a
default which results in the acceleration of such Senior Indebtedness under the
Senior Indenture or under any agreement pursuant to which Senior Indebtedness
has been issued.
<PAGE>
SECTION 9.3. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any
distribution or payment of assets or securities of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company of any
kind or character (whether voluntary or involuntary, in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full (or to have such payment duly provided for) of the
principal thereof and interest due thereon and other amounts due in
connection therewith before the Holders are entitled to receive any payment
or distribution of any assets (other than Capital Stock of the Company) on
account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders
or the Trustee on behalf of the Holders would be entitled except for the
provisions of this Article 9, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other
person making such payment or distribution directly to the holders of
Senior Indebtedness or the trustee under the Senior Indenture, (pro rata as
to each such holder or trustee on the basis of the respective amounts of
unpaid Senior Indebtedness held or represented by each), to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid except that Holders of the Securities shall be entitled to receive
securities that are subordinated to Senior Indebtedness to at least the
same degree as the Securities; and
(c) in the event that notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the
Securities, shall be received by the Trustee or the Holders or any Paying
Agent (or, if the Company is acting as its own Paying Agent, money for any
such payment or distribution shall be segregated or held in trust) on
account of principal of or interest on the Securities before all Senior
Indebtedness is paid in full, such payment or distribution (subject to the
provisions of Sections 9.6 and 9.7) shall be received and held in trust for
and shall be paid forthwith over and delivered to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or the trustee under the
Senior Indenture (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness held by them), for application to
the payment of such Senior Indebtedness until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment
or distribution or provision thereof or to or for the holders of such
Senior Indebtedness, except that Holders of the Securities shall be
entitled to receive securities that are subordinated to Senior Indebtedness
to at least the same extent as the Securities.
<PAGE>
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company or any
assignment for the benefit of the Company's creditors.
SECTION 9.4. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness
pursuant to this Article 9, the Holders of Securities shall be subrogated
equally and ratably to the rights of the holders of Senior Indebtedness to
receive payments or distributions of assets of the Company applicable to the
Senior Indebtedness until all amounts owing on the Securities shall be paid in
full, and for the purpose of such subrogation no such payments or distributions
to the holders of Senior Indebtedness by or on behalf of the Company or by or on
behalf of the Holders by virtue of this Article 9 which otherwise would have
been made to the Holders shall, as among the Company, its creditors other than
holders of the Senior Indebtedness and the Holders, be deemed to be payment by
the Company to or on account of the Senior Indebtedness, it being understood
that the provisions of this Article 9 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.
SECTION 9.5. Obligations of the Company Unconditional. Nothing contained in
this Article 9 or elsewhere in this Indenture or in any Security is intended to
or shall impair, as among the Company, its creditors other than holders of the
Senior Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal amount of and
other interest (including, to the extent lawful, any interest on overdue
installments of interest) on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Company other
than the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or any Holders from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article 9 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 9, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation, reorganization or similar proceedings are pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 9.
<PAGE>
SECTION 9.6. Trustee and Paying Agent Entitled To Assume Payments Not
Prohibited in Absence of Notice. The Trustee and Paying Agent shall not at any
time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee or the Paying Agent or
the taking of any other action under this Article 9 by the Trustee unless and
until the Trustee or the Paying Agent shall have received written notice thereof
from the Company or from one or more holders of Senior Indebtedness or from the
trustee under the Senior Indenture and, prior to the receipt of any such written
notice, the Trustee and Paying Agent, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
facts exist.
SECTION 9.7. Application by Trustee of Monies Deposited With It. Subject to
Article 8, any deposit of monies by the Company with the Trustee or any Paying
Agent (whether or not in trust) for the payment of the principal of or interest
on any Securities shall be subject to the provisions of Sections 9.1, 9.2, 9.3
and 9.4, except that, prior to the date on which by the terms of this Indenture
any such monies may become payable for any purpose (including, without
limitation, the payment of either the principal of or the other interest on any
Security), the Trustee shall not have received with respect to such monies the
notice provided for in Section 9.6, then the Trustee or the Paying Agent shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received. This Section shall be construed solely
for the benefit of the Trustee and Paying Agent and nothing herein shall be
construed to relieve any Holders from the duties imposed upon them under Section
9.3(c) with respect to monies received in violation of the provisions of this
Article 9. The foregoing shall not apply if the Company acts as its own Paying
Agent.
SECTION 9.8. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with. The holders of Senior Indebtedness may
extend, renew, modify or amend the terms of the Senior Indebtedness or any
security therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and obligations
of the parties to the Indenture or the Holders. No provision in any supplemental
indenture which modifies this Article 9 or otherwise affects the superior
position of the holders of the Senior Indebtedness shall be effective against
the holders of the Senior Indebtedness who have not consented thereto.
<PAGE>
SECTION 9.9. Securityholders Authorize Trustee To Effectuate Subordination
of Securities. Each Holder by its acceptance of Securities authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 9 and to protect the rights of the Holders pursuant to this Indenture
and appoints the Trustee its attorney-in-fact for such purpose, including, in
the event of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or any
other similar remedy or otherwise) tending towards liquidation of the business
and assets of the Company, the immediate filing of a claim for the unpaid
balance of its Securities in the form required in said proceedings and causing
said claim to be approved. If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of Senior
Indebtedness are hereby authorized to file an appropriate claim for and on
behalf of the Holders. In the event of any such proceeding, until the Senior
Indebtedness is paid in full in accordance with Section 9.3 (or adequate
provision made for such payment), without the consent of the holders of a
majority in aggregate principal amount outstanding of Senior Indebtedness, no
Holder shall waive, settle or compromise any such claim or claims relating to
the Securities that such Holder now or hereafter may have against the Company.
SECTION 9.10. Right of Trustee and Paying Agent To Hold Senior
Indebtedness. The Trustee and the Paying Agent, in their individual capacities,
shall be entitled to all of the rights set forth in this Article 9 in respect of
any Senior Indebtedness at any time held by either of them to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall be
construed to deprive the Trustee or the Paying Agent of any of its rights as
such holder.
SECTION 9.11. Article 9 Not To Prevent Events of Default. The failure to
make a payment on account of principal of or other interest (including any
interest on overdue installments of interest and defaulted interest) on the
Securities by reason of any provision of this Article 9 shall not be construed
as preventing the occurrence of an Event of Default under Section 6.1. Nothing
contained in this Article 9 shall limited the right of the Trustee or the
Holders to take any action to accelerate the maturity of the Securities pursuant
to Section 6.2 or to pursue any rights or remedies hereunder or under applicable
law, subject to the rights, if any, under this Article 9 of the holders, from
time to time, of Senior Indebtedness.
<PAGE>
SECTION 9.12. No Fiduciary Duty Created to Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness by virtue of the provisions of this Article 9, and shall not
be liable to any such holders (other than for its willful misconduct or gross
negligence) if it shall pay over to deliver to the Holders or the Company or any
other person, money or assets in compliance with the terms of this Indenture.
ARTICLE 10
Amendments and Waivers
----------------------
SECTION 10.1. Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to provide for the acceptance of appointment hereunder by a
successor Trustee; or
(8) to make any change that does not adversely affect the rights of
any Securityholder.
<PAGE>
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officer's Certificate stating that such amendment or supplement complies with
the provisions of this Section 10.1.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 10.2. With Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to any Securityholder but
with the written consent of the Holders of at least a majority in principal
amount of the Securities. In addition, the Holders of at least a majority in
principal amount of the Securities by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment or waiver may not:
(1) reduce the percentage of principal amount of Securities whose
Holders must consent to an amendment or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Securityholder to institute suit for
enforcement of any payment on or with respect to any Security; or
(7) make any change in Section 6.4 or 6.7 or the second sentence of
this Section which adversely affects the rights of any Securityholder.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.
<PAGE>
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such amendment
or waiver. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment or waiver under
this Section.
SECTION 10.3. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 10.4. Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 10.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee at the written direction of
the Company shall place an appropriate notation on the Security regarding the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
<PAGE>
SECTION 10.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that (i) such
amendment is authorized or permitted by this Indenture and that all conditions
precedent to the execution, delivery and performance of such amendment have been
satisfied; and (ii) the Indenture together with such amendment complies with the
TIA.
SECTION 10.7. Payment for Consent. Neither the Company nor any Affiliate of
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 11
Miscellaneous
-------------
SECTION 11.1. Trust Indenture Act Controls. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 11.2. Notices. Any notice or communication shall be in writing and
delivered in person, by telecopier or mailed by first-class mail addressed as
follows:
if to the Company:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Telecopy No. (317) 843-2014
Attention of Chief Financial
Officer
<PAGE>
if to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street, 11th Floor
New York, N.Y. 10004
Telecopy No. (212) 425-0542
Attention of Corporate Trust
Administration
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 Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.3. Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
<PAGE>
(1) a statement that the individual 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 individual, 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
individual, such covenant or condition has been complied with.
SECTION 11.6. Rules by Trustee, Paying Agent and Registrar. The Trustee may
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.7. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
a day on which banking institutions are not required to be open in the State of
New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 11.8. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. THE PARTIES HERETO SUBMIT TO THE JURISDICTION OF COURTS
LOCATED IN THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE.
SECTION 11.9. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or the Trustee shall not have any liability
for any obligations of the Company or the Trustee, respectively, under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.10. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
<PAGE>
SECTION 11.11. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 11.12. Table of Contents; Headings. 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 intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 11.13. Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ANACOMP, INC.
By:
-----------------------------------
Name:
Title:
IBJ SCHRODER BANK & TRUST COMPANY, as
Trustee
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
The following legend is to be inserted in Global Securities deposited with or on
behalf of the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
$
CUSIP NO. 032371 AA4
13% Senior Subordinated Note due 2002
Global Note No. -------
ANACOMP, INC., an Indiana corporation, promises to pay to ---------------,
or registered assigns, the principal sum of --------------- Dollars on June 30,
2002.
Interest Payment Dates: June 30 and December 31
Record Dates: June 15 and December 15
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
ANACOMP, INC.
[Seal] by
-------------------------
President and
Chief Executive Officer
-------------------------
Vice President and
Treasurer
<PAGE>
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
--------------------
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
13% Senior Subordinated Note due 2002
1. Interest
--------
ANACOMP, INC., an Indiana corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
June 30 and December 31 (each an "Interest Payment Date") of each year,
commencing December 31, 1996. Interest on the Securities will accrue from and
including the most recent date to which interest has been paid or, if no
interest has been paid, from the date of this Security. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
-----------------
The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on the June 15 or December 15 immediately preceding the Interest Payment Date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. Except as provided in the next paragraph, the
Company will pay principal and interest in money of the United States of America
that at the time of payment is legal tender for payment of public and private
debts. However, the Company may pay principal and interest by check payable in
such money mailed to a Holder's registered address.
In the case of any Interest Payment Date for this Security occurring on or
prior to June 30, 1997, the Company shall satisfy its obligation to pay interest
on this Security on such Interest Payment Date by delivering to the Holder of
this Security a new Security (an "Accrued Interest Security"), in the form of
this Security, dated such Interest Payment Date (and bearing interest from such
Interest Payment Date) and having a principal amount corresponding to the amount
of interest due on this Security on such Interest Payment Date; provided,
however, that the Company shall not issue an Accrued Interest Security pursuant
to this paragraph in payment of any accrued interest payable upon any redemption
or repurchase of all or any portion of this Security, and instead shall pay such
accrued interest in cash. On each Interest Payment Date occurring after June 30,
1997, the Company shall pay to the Holder of this Security an amount in cash
equal to 100% of the interest payment due on such Interest Payment Date.
<PAGE>
3. Paying Agent and Registrar
--------------------------
Initially, IBJ Schroder Bank & Trust Company, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of June 4,
1996 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are obligations of the Company limited to $160,000,000 (plus
the principal amount of any Accrued Interest Securities issued pursuant to the
second paragraph of Section 2 of the Securities) aggregate principal amount
(subject to Section 2.9 of the Indenture). The Indenture imposes certain
limitations on the Company and the Restricted Subsidiaries, including, subject
to certain exceptions, limitations on the Incurrence of Indebtedness, the
payment of dividends on, and redemption of, the Capital Stock of the Company and
certain of its Subsidiaries, the redemption of certain Subordinated Obligations
of the Company and certain of its Subsidiaries, the sale by the Company and
certain of its Subsidiaries of assets and certain Subsidiary stock, transactions
with Affiliates, Sale/Leaseback Transactions by the Company and certain of its
Subsidiaries and consolidations and mergers and transfer of all or substantially
all the Company's and certain of its Subsidiaries' assets. In addition, the
Indenture limits the ability of the Company and certain of its Subsidiaries to
restrict distributions and dividends from such Subsidiaries.
<PAGE>
5. Optional Redemption
-------------------
The Company may redeem the Securities in whole at any time or in part at
any time and from time to time at the redemption prices set forth below
(expressed as percentages of the principal amount thereof), plus accrued and
unpaid interest (if any) to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related Interest Payment Date):
If redeemed pursuant to this Paragraph 5
during the 12-month period ending
June 30 of the years set forth below:
Year Percentage
---- ----------
1996 103.000%
1997 103.000%
1998 102.625%
1999 102.250%
2000 101.875%
2001 101.500%
2002 and thereafter 100.000%
6. Mandatory Redemption
--------------------
The Company shall, prior to the fifth anniversary of the Issue Date, redeem
a principal amount of the Securities equal to the aggregate principal amount of
Accrued Interest Securities issued under this Indenture. The redemption price
shall be the price that would then be applicable under Paragraph 5 in the case
of an optional redemption.
7. Notice of Redemption
--------------------
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in denominations
larger than $1,000 may be redeemed in part but only in Authorized Denominations.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
<PAGE>
8. Put Provisions
--------------
Upon the occurrence of a Change of Control, any Holder of Securities will
have the right to require the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to 101% of the principal
amount of the Securities to be repurchased plus accrued interest to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
Under certain circumstances, any Holder of Securities will have the right
to require the Company to repurchase all or part of the Securities of such
Holder at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) from certain Net Cash
Proceeds of Asset Dispositions as provided in, and subject to the terms of, the
Indenture.
9. Subordination
-------------
The Company's payment of the principal of and interest on the Securities is
subordinated and subject to the prior payment in full of the Company's Senior
Indebtedness as more fully set forth in the Indenture. Each Holder of Securities
by his acceptance hereof covenants and agrees that all payments of the principal
and interest on the Securities by the Company shall be subordinated in
accordance with Article 9 of the Indenture and each holder accepts and agrees to
be bound by such provisions.
10. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in Authorized
Denominations. A Holder may transfer or exchange Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
<PAGE>
11. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of it
for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request unless an abandoned property law designates another Person.
After any such payment, Holders entitled to the money must look only to the
Company and not to the Trustee for payment.
13. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time may terminate some
of or all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
14. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, to comply with Article 5 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to add Guarantees with respect to the Securities, to secure the Securities, to
add additional covenants or surrender rights and powers conferred on the
Company, to comply with any request of the SEC in connection with qualifying the
Indenture under the Act or to make any change that does not adversely affect the
rights of any Securityholder.
<PAGE>
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days in
payment of interest on the Securities; (ii) default in payment of principal on
the Securities at maturity, upon acceleration, redemption or otherwise, or
failure by the Company to redeem or Purchase Securities when required; (iii)
failure by the Company to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $7,500,000 at the time; (v) certain events of bankruptcy or
insolvency with respect to the Company and any Restricted Subsidiary; and (vi)
certain judgments or decrees for the payment of money in excess of $7,500,000.
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest) if it determines that withholding notice is
in the interest of the Holders.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
<PAGE>
18. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), COST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. GOVERNING LAW
-------------
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Attention of Corporate Communications
<PAGE>
- - --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent
may substitute another to act for him.
- - --------------------------------------------------------------------------------
Date: --------------- Your Signature: ---------------------------------------
(Sign exactly as your name appears on the other side of this Security)
- - --------------------------------------------------------------------------------
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.7 or 4.9 of the Indenture, check the box:
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.7 or 4.9 of the Indenture, state the amount:
$----------------------------
Date: ------------------ Your Signature: -----------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:------------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements
include membership or participation
in the Security Transfer Agent
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934.)
<PAGE>
Schedule I to 13% Senior Subordinated Indenture
Indebtedness To Be Outstanding
------------------------------
Immediately After the Issue Date
--------------------------------
I. Anacomp, Inc.
A) Letters of Credit Issued by Citibank
Number Beneficiary Amount
------------------- ----------------------- ---------------
1) NY 0816 30007207 Resolve Site Trust $ 415,642
2) NY 0688 3001550 United Pacific Insurance 600,000
3) NY 0692 30007293 Dept. of Health Services 232,000
4) NY 0692 30005316 Dept. of Health Services 2,000,000
5) NY 0816 30006547 Gulf Insurance Company 400,000
6) NY 0816 30009251 Aetna Casualty & Surety 1,365,703
7) NY 0688 30012164 Aetna Casualty & Surety 1,243,356
8) NY 0688 30016044 Centra Capital 500,000
B) Indianapolis Industrial Revenue Bonds 375,000
C) AT&T Capital Lease 37,472
D) Carlisle Company Note 2,513,423
II. Anacomp S.A. (France)
A) Term Loan 123,732
<PAGE>
Schedule II to 13% Senior Subordinated Indenture
Liens To be Outstanding Immediately After the Issue Date
--------------------------------------------------------
Name Agreement Amount
- - ---------------- ---------------------------------- ----------------
SKC America, Inc. Amended and Restated Master Supply
and SKC Limited Agreement $10,000,000.00
<PAGE>
Schedule III to 13% Senior Subordinated Indenture
U.S. Restricted Subsidiaries
----------------------------
1. Florida AAC Corporation
================================================================================
ANACOMP, INC.
and
-------------------------,
as Warrant Agent
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
WARRANT AGREEMENT
Dated as of June 4, 1996
-------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Section
- - -------
1. DEFINITIONS............................................................1
2. EXERCISE OF WARRANT....................................................4
2.1. Manner of Exercise............................................4
2.2. Payment of Taxes..............................................5
2.3. Fractional Shares.............................................5
3. TRANSFER, DIVISION AND COMBINATION.....................................5
3.1. Division and Combination......................................5
3.2. Expenses......................................................6
3.3. Maintenance of Books..........................................6
4. ADJUSTMENTS............................................................6
4.1. Corporate Event...............................................6
4.2. Stock Dividends, Subdivisions and Combinations................7
4.3. Certain Other Distributions...................................8
4.4. Issuance of Warrants or Other Rights..........................8
4.5. Issuance of Convertible Securities............................9
4.6. Superseding Adjustment.......................................10
4.7. Other Provisions Applicable to Adjustments under this
Section......................................................11
4.8. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets.....................................12
4.9. Other Action Affecting Common Stock..........................13
4.10. Certain Limitations..........................................13
5. NOTICES TO WARRANT HOLDERS............................................13
5.1. Notice of Adjustments........................................13
5.2. Notice of Corporate Action...................................13
6. NO IMPAIRMENT.........................................................14
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH
OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY.............................15
8. STOCK AND WARRANT TRANSFER BOOKS......................................15
9. SUPPLYING INFORMATION.................................................15
10. LOSS OR MUTILATION....................................................16
11. OFFICE OF COMPANY.....................................................16
<PAGE>
Section
- - -------
12. APPRAISAL.............................................................16
13. LIMITATION OF LIABILITY...............................................16
14. CONCERNING THE WARRANT AGENT..........................................16
14.1 Correctness of Statement.....................................16
14.2 Breach of Covenants..........................................16
14.3 Reliance on Counsel..........................................17
14.4 Reliance on Documents........................................17
14.5 Compensation.................................................17
14.6 Legal Proceedings............................................17
14.7 Other Transactions in Securities of the Company..............17
14.8 Liability of Warrant Agent...................................17
14.9 Adjustments to the Number of Warrant Shares..................18
15. MISCELLANEOUS.........................................................18
15.1. Nonwaiver....................................................18
15.2. Notice Generally.............................................18
15.3. Appointment of Warrant Agent.................................19
14.5. Successors and Assigns.......................................19
15.5. Amendment....................................................19
15.6. Severability.................................................19
15.7. Headings.....................................................19
15.8. Governing Law................................................19
SIGNATURES..................................................................19
EXHIBITS
Exhibit A - Form of Warrant Certificate..................................20
Exhibit B - Subscription Form............................................23
Exhibit C - Assignment Form..............................................24
<PAGE>
WARRANT AGREEMENT
-----------------
WARRANT AGREEMENT dated as of June 4, 1996, between ANACOMP, INC., an
Indiana corporation (the "Company") and ChaseMellon Shareholder Services,
L.L.C., as Warrant Agent (the "Warrant Agent").
WHEREAS, in connection with the financial restructuring of the Company and
certain of its subsidiaries pursuant to that certain Third Amended Joint Plan of
Reorganization (as amended, supplemented or otherwise modified from time to
time, the "Plan") filed with the United States Bankruptcy Court for the District
of Delaware and confirmed by such court on May 20, 1996, the Company, as
successor to Old Anacomp, proposes to issue the Warrants (as defined herein),
representing the right to purchase up to an aggregate of 362,694 shares of its
Common Stock (as defined herein), subject to adjustment as hereinafter provided,
to the holders of certain claims against the Company; and
WHEREAS, the Company desires to appoint the Warrant Agent to act on behalf
of the Company, and the Warrant Agent is willing so to act in connection with
the issuance, transfer, exchange, replacement and exercise of the Warrant
Certificates (as defined herein) and other matters as provided herein;
NOW THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company and the holders from time to time of the
Warrants, the Company and the Warrant Agent hereby agree as follows:
1. DEFINITIONS
As used in this Warrant Agreement, the following terms have the respective
meanings set forth below:
"Additional Shares of Common Stock" means all shares of Common Stock issued
by the Company after the Closing Date, other than Warrant Stock.
"Appraised Value" means, in respect of any share of Common Stock on any
date herein specified, the fair saleable value of such share of Common Stock as
of the last day of the most recent fiscal month ended at least 15 days prior to
such specified date, based on (i) the value of the Company, as determined by an
investment banking firm selected in accordance with the terms of Section 12,
divided by (ii) the number of Fully Diluted Outstanding shares of Common Stock.
"Business Day" means any day that is not a Saturday or Sunday or a day on
which banks are required or permitted to be closed in the State of New York.
"Closing Date" means June 4, 1996.
<PAGE>
"Commission" means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" means (except where the context otherwise indicates) the
Common Stock, $0.01 par value, of the Company, and any capital stock into which
such Common Stock may hereafter be changed, whether as a result of any change in
the capital structure of the Company or otherwise, and shall also include (i)
capital stock of the Company of any other class (regardless of how denominated)
issued to the holders of shares of Common Stock upon any reclassification
thereof which is not preferred as to dividends or assets over any other class of
stock of the Company and which is not subject to redemption and (ii) shares of
common stock of any successor or acquiring corporation (as defined in Section
4.9) received by or distributed to the holders of Common Stock of the Company in
the circumstances contemplated by Section 4.9.
"Control Event" has the meaning specified in Section 4.1.
"Control Event Purchase Price" has the meaning specified in Section 4.1.
"Convertible Securities" means evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for Additional
Shares of Common Stock, either immediately or upon the occurrence of a specified
date or a specified event.
"Current Market Price" means, in respect of any share of Common Stock on
any date herein specified, (a) for so long as there shall then be a public
market for the Common Stock, the average of the Daily Market Prices for 20
consecutive Business Days commencing 30 Business days before such specified
date, and (b) if there is then no public market for the Common Stock, the
Appraised Value per share of Common Stock as at such specified date.
"Current Warrant Price" means, in respect of a share of Common Stock at any
date herein specified, the price at which a share of Common Stock may be
purchased pursuant to this Warrant Agreement on such date. The Current Warrant
Price as of the date of this Warrant Agreement is $12.23, subject to adjustment
in accordance with the terms hereof.
"Daily Market Price" means, for each Business Day (i) the last sale price
on such day on the principal stock exchange on which the Common Stock is then
listed or admitted to trading, (ii) if no sale takes place on such day on such
exchange, the average of the last reported closing bid and asked prices on such
day as officially quoted on such exchange, (iii) if the Common Stock is not then
listed or admitted to trading on any stock exchange, the closing sale price on
such day in the over-the-counter market, as furnished by the Nasdaq Stock Market
or the National Quotation Bureau, Inc., (iv) if neither such corporation at the
time is engaged in the business of reporting such prices, as furnished by any
similar firm then engaged in such business, or (v) if there is no such firm, as
furnished by any member of the NASD selected by the Company.
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, as the same shall be in effect from time to time.
"Exercise Period" means the period during which the Warrants are
exercisable pursuant to Section 2.1.
"Expiration Date" means the fifth anniversary of the Closing Date.
"Fully Diluted Outstanding" means, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be determined,
all shares of Common Stock Outstanding at such date and all shares of Common
Stock issuable in respect of the Warrants outstanding on such date, and other
options or warrants to purchase, or securities convertible into, shares of
Common Stock outstanding on such date which would be deemed outstanding in
accordance with GAAP for purposes of determining book value or net income per
share.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on the applicable date of determination.
"Holder" means the Person in whose name a Warrant or Warrants is registered
on the books of the Company maintained by the Warrant Agent for such purpose.
"NASD" means the National Association of Securities Dealers, Inc., or any
successor corporation thereto.
"Other Property" shall have the meaning set forth in Section 4.9.
"Outstanding" means, when used with reference to Common Stock, at any date
as of which the number of shares thereof is to be determined, all issued shares
of Common Stock, except shares then owned or held by or for the account of the
Company or any subsidiary thereof, and shall include all shares issuable in
respect of outstanding scrip or any certificates representing fractional
interests in shares of Common Stock.
"Permitted Issuances" means (i) the issuance of the Warrants, (ii) the
issuance of warrants or stock options to the Company's management and other
employees for the purchase of up to 810,811 shares of Common Stock, (iii) the
issuance of shares of Common Stock upon exercise of the warrants and options
referred to in clauses (i) and (ii), and (iv) all other issuances of Common
Stock and warrants by the Company expressly authorized by the Plan.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
<PAGE>
"Plan" has the meaning assigned to such term in the recitals in this
Agreement.
"Securities Acts means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Warrant" means each of the Company's warrants issued pursuant to this
Agreement, each of which evidences the right to purchase one share of Common
Stock, subject to adjustment as set forth in this Warrant Agreement, and all
warrants issued upon transfer, division or combination of, or in substitution
for, any thereof.
"Warrant Certificate" means a certificate, substantially in the form of
Exhibit A hereto, representing one or more Warrants held by a Holder. All
Warrant Certificates shall at all times be identical as to terms and conditions
and date, except as to the number of Warrants represented thereby and the number
of shares of Common Stock for which such Warrants may be exercised.
"Warrant Price" means an amount equal to (i) the number of shares of Common
Stock being purchased upon exercise of Warrants pursuant to Section 2.1,
multiplied by (ii) the Current Warrant Price as of the date of such exercise.
"Warrant Stock" means the shares of Common Stock purchased by the holders
of the Warrants upon the exercise thereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. From and after the Closing Date and until 5:00
P.M., New York time, on the Expiration Date, a Holder may exercise Warrants, at
any time and from time to time, on any Business Day, for all or any part of the
number of shares of Common Stock purchasable hereunder.
In order to exercise Warrants, a Holder shall deliver to the Warrant Agent
at its principal office at 85 Challenger Road, Overpeck Centre, Ridgefield Park,
New Jersey 07660; Attn: Reorganization Department or at the office or agency
designated by the Company pursuant to Section 11, (i) a written notice of such
Holder's election to exercise such Warrants, which notice shall specify the
number of shares of Common Stock to be purchased, (ii) payment of the Warrant
Price and (iii) the Warrant Certificate in respect of the Warrants being
exercised. Such notice shall be substantially in the form of the subscription
form appearing at the end of this Warrant Agreement as Exhibit B, duly executed
by such Holder or its agent or attorney. Upon receipt thereof, the Company
shall, as promptly as practicable, and in any event within five (5) Business
Days thereafter, execute or cause to be executed and deliver or cause to be
delivered to such Holder a certificate or certificates representing the
aggregate number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereinafter provided.
The stock certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as a Holder shall request in the
notice and shall be registered in the name of such Holder or, subject to Section
9, such other name as shall be designated in the notice. Warrants shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and a Holder or any other Person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the notice, together with the cash or check or
checks and the Warrant Certificate, is received by the Warrant Agent as
described above and all taxes required to be paid by a Holder, if any, pursuant
to Section 2.2 prior to the issuance of such shares have been paid. If the
Warrants represented by a Warrant Certificate shall have been exercised in part,
the Warrant Agent shall, at the time of delivery of the certificate or
certificates representing Warrant Stock, deliver to a Holder a new Warrant
Certificate evidencing the rights of such Holder to purchase the unpurchased
shares of Common Stock called for by the Warrant Certificate surrendered, which
new Warrant Certificate shall in all other respects be identical with the
Warrant Certificate so surrendered, or, at the request of a Holder, appropriate
notation may be made on the Warrant Certificate so surrendered and the same
returned to such Holder. Notwithstanding any provision herein to the contrary,
the Company shall not be required to register shares in the name of any Person
who acquired Warrants or any Warrant Stock otherwise than in accordance with
this Warrant Agreement.
<PAGE>
Payment of the Warrant Price shall be made at the option of a Holder by
certified or official bank check.
2.2. Payment of Taxes. All shares of Common Stock issuable upon the
exercise of Warrants pursuant to the terms hereof shall be validly issued, fully
paid and nonassessable and without any preemptive rights. The Company shall pay
all expenses in connection with, and all taxes and other governmental charges
that may be imposed with respect to, the issue or delivery thereof, unless such
tax or charge is imposed by law upon a Holder, in which case such taxes or
charges shall be paid by such Holder. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Common Stock issuable
upon exercise of Warrants in any name other than that of a Holder, and in such
case the Company shall not be required to issue or deliver any stock certificate
until such tax or other charge has been paid or it has been established to the
satisfaction of the Company that no such tax or other charge is due.
2.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrants. As to any
fraction of a share which a Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the Current Market
Price per share of Common Stock on the date of exercise.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Division and Combination. A Warrant Certificate may be exchanged for a
new Warrant Certificate and Warrants may be divided or combined with other
Warrants upon presentation of the Warrant Certificate(s) therefor at the
aforesaid office or agency of the Warrant Agent, together with a written notice
specifying the names and denominations in which new Warrant Certificates are to
be issued, signed by a Holder or its agent or attorney. Subject to compliance
with this Section 3.1, as to any transfer which may be involved in such division
or combination, the Warrant Agent shall execute and deliver a new Warrant
Certificate(s) in exchange for the Warrant Certificate(a) representing the
Warrants to be divided or combined in accordance with such notice.
<PAGE>
3.2. Expenses. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant Certificates under this
Section 3.
3.3. Maintenance of Books. The Company agrees to maintain, at its aforesaid
office or agency, books for the registration and the registration of transfer of
the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which Warrants are exercisable,
and the price at which such shares may be purchased upon exercise of Warrants,
shall be subject to adjustment from time to time as set forth in this Section 4.
The Company shall give each Holder notice of any event described below which
requires an adjustment pursuant to this Section 4 at the time of such event.
4.1. Corporate Event. (a) If at any time prior to the third anniversary of
the Closing Date any Control Event (as defined in Section 4.1(b) hereof) shall
occur, (i) the number of shares of Common Stock for which each Warrant may be
exercised shall be adjusted to equal 135% of the number of shares for which such
Warrant could have been exercised immediately prior to such Control Event, and
(ii) the Current Warrant Price for each share of Common Stock pursuant to the
exercise of a Warrant shall be adjusted to equal a purchase price determined as
follows: (x) in the case of a Control Event occurring prior to the first
anniversary of the Closing Date, the adjusted Current Warrant Price shall be 50%
of the Control Event Purchase Price (as defined in Section 4.1(c) hereof); (y)
in the case of a Control Event occurring on or after the first anniversary of
the Closing Date and prior to the second anniversary of the Closing Date, the
adjusted Current Warrant Price shall be 75% of the Control Event Purchase Price;
and (z) in the case of a Control Event occurring on or after the second
anniversary of the Closing Date and prior to the third anniversary of the
Closing Date, the adjusted Current Warrant Price shall be 90% of the Control
Event Purchase Price. Such adjusted Current Warrant Price shall be deemed
effective immediately prior to the consummation of such Control Event so that
the holders of the Warrants shall be entitled to exercise the Warrants at such
adjusted Current Warrant Price, and, if applicable, thereafter dispose of the
shares of Common Stock received upon exercise in such Control Event. The Company
hereby agrees that it shall make provision in any agreement to which it is a
party relating to any Control Event to permit the exercise of Warrants
immediately prior to such Control Event, which exercise may be conditioned on
the actual occurrence of such Control Event. The Current Warrant Price for the
Warrants shall be adjusted in accordance with this Section 4.1(a) only for the
first Control Event occurring after the Closing Date. The Current Warrant Price
in effect following the occurrence of a Control Event shall in all cases be
subject to further adjustment as provided in this Section 4.
<PAGE>
(b) For purposes hereof, the term "Control Event" shall mean the occurrence
of any of the following events: (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than an underwriter engaged
in a firm commitment underwriting in connection with a public offering of Common
Stock, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 75% of the Common Stock of the Company;
(ii) the Company, either individually or in conjunction with one or more of its
subsidiaries, sells, conveys, leases or otherwise transfers, or one or more of
such subsidiaries sell, convey, lease or otherwise transfer, all or
substantially all the assets of the Company and its subsidiaries, taken as a
whole, to any Person (other than to a subsidiary of the Company or in a
transaction described in Section 4.8); or (iii) the stockholders of the Company
adopt a plan of complete liquidation and dissolution.
(c) As used herein, "Control Event Purchase Price" shall mean (i) in the
case of a Control Event resulting from a tender offer for the Common Stock, the
price offered in such tender offer for one share of Common Stock, or (ii)
otherwise, the Current Market Price as of the fifth business day preceding the
occurrence of the Control Event.
(d) The Company shall use its best efforts to notify all holders of
Warrants not less than 20 days prior to the occurrence of any Control Event
(which notice shall include an estimate of the Purchase Price to be in effect
upon the happening of the Control Event), in the manner described in Section 5.1
hereof (unless notice of such Control Event is required to be given earlier
pursuant to Section 5.1 hereof, in which case the notice shall include the
information required under this subsection (c)).
4.2. Stock Dividends, Subdivisions and Combinations. If at any time the
Company shall:
(a) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or make any other
distribution of, Additional Shares of Common Stock to the holders of its
Common Stock,
(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
<PAGE>
then (i) the number of shares of Common Stock for which Warrants are exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which such Warrants are exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (ii) the Current Warrant Price shall be adjusted to
equal (A) the Current Warrant Price multiplied by the number of shares of Common
Stock for which such Warrants are exercisable immediately prior to the
adjustment divided by (B) the number of shares for which such Warrants are
exercisable immediately after such adjustment.
4.3. Certain Other Distributions. If at any time the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive:
(a) any distribution of evidences of its indebtedness or any other
assets of any nature whatsoever (other than cash or Convertible Securities
covered by Section 4.5), or
(b) any distribution of warrants or other rights to subscribe for or
purchase any evidences of its indebtedness (other than warrants or rights
covered by Section 4.4 hereof),
then (i) the number of shares of Common Stock for which Warrants are exercisable
shall be adjusted to equal the product obtained by multiplying the number of
shares of Common Stock for which Warrants are exercisable immediately prior to
such adjustment by a fraction (A) the numerator of which shall be the Current
Market Price per share of Common Stock at the date of taking such record and (B)
the denominator of which shall be such Current Market Price per share of Common
Stock minus the amount allocable to one share of Common Stock of the fair value
(as determined in good faith by the Board of Directors of the Company) of any
and all such evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so distributable,
and (ii) the Current Warrant Price shall be reduced to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which such
Warrants are exercisable immediately prior to the adjustment divided by (B) the
number of shares for which such Warrant are exercisable immediately after such
adjustment. A reclassification of the Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares of Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4.3 and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4.2.
<PAGE>
4.4. Issuance of Warrants or Other Rights. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a distribution of any options, warrants or other rights to
subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Securities (other than Permitted Issuances), whether or not the
rights to exchange, subscribe or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such warrants or other rights (or, in the case of warrants or rights to
subscribe for or purchase Convertible Securities, the price per share for which
Common Stock is issuable upon the exercise of such warrants or other rights and
conversion of such Convertible Securities) shall be less than 90% of the Current
Market Price in effect immediately prior to the time of such issue or sale, then
(i) the number of shares of Common Stock for which Warrants are exercisable
shall be adjusted to equal the product obtained by multiplying the number of
shares of Common Stock for which Warrants are exercisable immediately prior to
such record date by a fraction (A) the numerator of which shall be the number of
shares of Common Stock Outstanding on such record date plus the total number of
Additional Shares offered for subscription or purchase, and (B) the denominator
of which shall be the number of shares of Common Stock Outstanding on such
record date plus the number of shares of Common Stock which the aggregate
subscription or exercise price to be paid for all Additional Shares would
purchase at the then Current Market Price; and (ii) the Current Warrant Price as
to the number of shares for which such Warrants are exercisable prior to such
adjustment shall be reduced by multiplying such Current Warrant Price by a
fraction (X) the numerator of which shall be the number of shares for which such
Warrants are exercisable immediately prior to such record date; and (Y) the
denominator of which shall be the number of shares of Common Stock for which
such Warrants are exercisable immediately after such record date. No further
adjustments of the number of shares for which Warrants are exercisable or of the
Current Warrant Price shall be made upon the actual issue of such Common Stock
upon exercise of such warrants or other rights.
4.5. Issuance of Convertible Securities. If at any time the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a distribution of any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, then (i)
the number of shares for which Warrants are exercisable shall be adjusted to
equal the product obtained by multiplying the number of shares of Common Stock
for which Warrants are exercisable immediately prior to such record date by a
fraction (A) the numerator of which shall be the number of shares of Common
Stock outstanding on such record date plus the total number of Additional Shares
into which such Convertible Securities would be convertible and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
on such record date and (ii) the Current Warrant Price as to the number of
shares for which such Warrants are exercisable prior to such adjustment shall be
reduced by multiplying such Current Warrant Price by a fraction (X) the
numerator of which shall be the number of shares for which such Warrants are
exercisable immediately prior to such record date; and (Y) the denominator of
which shall be the number of shares of Common Stock for which such Warrants are
exercisable immediately after such record date. No adjustment of the number of
Shares for which Warrants are exercisable or of the Current Warrant Price shall
be made under this Section 4.5 upon the issuance of any Convertible Securities
which are issued pursuant to the exercise of any warrants or other subscription
or purchase rights therefor, if any such adjustment shall previously have been
made upon the issuance of such warrants or other rights pursuant to Section 4.4.
No further adjustments of the number of Shares for which Warrants are
exercisable or of the Current Warrant Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible Securities
and, if any issue of such Convertible Securities is made upon exercise of any
warrant or other right to subscribe for or to purchase any such Convertible
Securities for which adjustments of the number of Shares for which Warrants are
exercisable and the Current Warrant Price have been or are to be made pursuant
to other provisions of this Section 4, no further adjustments of the number of
Shares for which Warrants are exercisable and the Current Warrant Price shall be
made by reason of such issue.
<PAGE>
4.6. Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which Warrants are exercisable and the
Current Warrant Price shall have been made pursuant to Section 4.4 or Section
4.5 as the result of any issuance of warrants, rights or Convertible Securities,
(a) such warrants or rights, or the right of conversion or exchange in
such other Convertible Securities, shall expire, and all or a portion of
such warrants or rights, or the right of conversion or exchange with
respect to all or a portion of such other Convertible Securities, as the
case may be, shall not have been exercised, or
(b) the consideration per share for which shares of Common Stock are
issuable pursuant to such warrants or rights, or the terms of such other
Convertible Securities, shall be increased solely by virtue of provisions
therein contained for an automatic increase in such consideration per share
upon the occurrence of a specified date or event,
then for each outstanding Warrant such previous adjustment shall be rescinded
and annulled and the Additional Shares of Common Stock which were deemed to have
been issued by virtue of the computation made in connection with the adjustment
so rescinded and annulled shall no longer be deemed to have been issued by
virtue of such computation. Thereupon, a recomputation shall be made of the
effect of such rights or options or other Convertible Securities on the basis of
(i) treating the number of Additional Shares of Common Stock or
other property, if any, theretofore actually issued or issuable
pursuant to the previous exercise of any such warrants or rights or
any such right of conversion or exchange, as having been issued on the
date or dates of any such exercise and for the consideration actually
received and receivable therefor, and
(ii) treating any such warrants or rights or any such other
Convertible Securities which then remain outstanding as having been
granted or issued immediately after the time of such increase of the
consideration per share for which shares of Common Stock or other
property are issuable under such warrants or rights or other
Convertible Securities; whereupon a new adjustment of the number of
shares of Common Stock for which Warrants are exercisable and the
Current Warrant Price shall be made, which new adjustment shall
supersede the previous adjustment so rescinded and annulled.
<PAGE>
4.7. Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which Warrants are exercisable and the
Current Warrant Price provided for in this Section 4:
(a) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any Convertible Securities or any warrants or
other rights to subscribe for or purchase any Additional Shares of Common
Stock or any Convertible Securities shall be issued for cash consideration,
the consideration received by the Company therefor shall be the amount of
the cash received by the Company therefor, or, if such Additional Shares of
Common Stock or Convertible Securities are offered by the Company for
subscription, the subscription price. To the extent that such issuance
shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the amount of such consideration shall be
deemed to be the fair value of such consideration at the time of such
issuance as determined in good faith by the Board of Directors of the
Company. In case any Additional Shares of Common Stock or any Convertible
Securities or any warrants or other rights to subscribe for or purchase
such Additional Shares of Common Stock or Convertible Securities shall be
issued in connection with any merger in which the Company issues any
securities, the amount of consideration therefor shall be deemed to be the
fair value, as determined in good faith by the Board of Directors of the
Company, of such portion of the assets and business of the nonsurviving
corporation as such Board in good faith shall determine to be attributable
to such Additional Shares of Common Stock, Convertible Securities, warrants
or other rights, as the case may be. The consideration for any Additional
Shares of Common Stock issuable pursuant to any warrants or other rights to
subscribe for or purchase the same shall be the consideration received by
the Company for issuing such warrants or other rights plus the additional
consideration payable to the Company upon exercise of such warrants or
other rights. The consideration for any Additional Shares of Common Stock
issuable pursuant to the terms of any Convertible Securities shall be the
consideration received by the Company for issuing warrants or other rights
to subscribe for or purchase such Convertible Securities, plus the
consideration paid or payable to the Company in respect of the subscription
for or purchase of such Convertible Securities, plus the additional
consideration, if any, payable to the Company upon the exercise of the
right of conversion or exchange in such Convertible Securities. In case of
the issuance at any time of any Additional Shares of Common Stock or
Convertible Securities in payment or satisfaction of any dividends upon any
class of stock other than Common Stock, the Company shall be deemed to have
received for such Additional Shares of Common Stock or Convertible
Securities a consideration equal to the amount of such dividend so paid or
satisfied.
(b) When Adjustments to Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the
number of shares of Common Stock for which Warrants are exercisable that
would otherwise be required may be postponed (except in the case of a
Control Event as provided in Section 4.1 or a subdivision or combination of
shares of the Common Stock, as provided for in Section 4.2) up to, but not
beyond the date of exercise if such adjustment either by itself or with
other adjustments not previously made adds or subtracts less than 1% of the
shares of Common Stock for which Warrants are exercisable immediately prior
to the making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed
shall be carried forward and made as soon as such adjustment, together with
other adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose
of any adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.
<PAGE>
(c) Fractional Interests. In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the
nearest 1/100th of a share.
4.8. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then each Holder shall have the right thereafter to receive,
upon exercise of Warrants, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which such Warrants are exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant Agreement to be performed and observed by the Company
and all the obligations and liabilities hereunder, subject to such modifications
as may be deemed appropriate (as determined by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of the
Common Stock for which Warrants are exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 4. For
purposes of this Section 4.8, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.8 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
<PAGE>
4.9. Other Action Affecting Common Stock. In case at any time or from time
to time the Company shall take any action in respect of its Common Stock, other
than any action described in this Section 4, then the number of shares of Common
Stock or other stock for which Warrants are exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
4.10. Certain Limitations. Notwithstanding anything herein to the contrary,
the Company agrees not to enter into any transaction which, by reason of any
adjustment hereunder, would cause the Current Warrant Price to be less than the
par value per share of Common Stock.
5. NOTICES TO WARRANT HOLDERS
5.1. Notice of Adjustments. Whenever the number of shares of Common Stock
for which Warrants are exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of Warrants shall be adjusted
pursuant to Section 4, the Company shall forthwith prepare a certificate to be
executed by the chief financial officer of the Company setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Board of Directors of the Company determined the fair value of any evidences
of indebtedness, shares of stock, other securities or property or warrants or
other subscription or purchase rights referred to in Section 4), specifying the
number of shares of Common Stock for which Warrants are exercisable and (if such
adjustment was made pursuant to Section 4.9) describing the number and kind of
any other shares of stock or Other Property for which Warrants are exercisable,
and any change in the purchase price or prices thereof, after giving effect to
such adjustment or change. The Company shall promptly cause a signed copy of
such certificate to be delivered to each Holder in accordance with Section 14.2.
The Company shall keep at its office or agency designated pursuant to Section 11
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by any Holder or any
prospective purchaser of Warrants designated by a Holder thereof.
5.2. Notice of Corporate Action. If at any time
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for
the payment of dividends under the laws of the jurisdiction of
incorporation of the Company) or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any
other right, or
<PAGE>
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or
business of the Company to, another person or entity, or
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in any one or more of such cases, the Company shall give to each Holder
(i) at least 10 days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 10 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to a
Holder at the last address of such Holder appearing on the books of the Company
and delivered in accordance with Section 14.2.
6. NO IMPAIRMENT
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant Agreement, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of a Warrant above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of a Warrant, and (c) use its best efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant Agreement.
<PAGE>
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Closing Date, the Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of this Warrant Agreement, shall be duly
and validly issued and fully paid and nonassessable, and not subject to
preemptive rights.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Current Warrant Price.
Before taking any action which would result in an adjustment in the number
of shares of Common Stock for which Warrants are exercisable or in the Current
Warrant Price, the Company shall use its best efforts to obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
If any shares of Common Stock required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any governmental
authority or other governmental approval or filing under any federal or state
law before such shares may be so issued, the Company will in good faith and as
expeditiously as possible and at its expense endeavor to cause such shares to be
duly registered.
8. STOCK AND WARRANT TRANSFER BOOKS
The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
9. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and each holder
of Common Stock in supplying such information as may be reasonably necessary for
such holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Warrant or Common Stock.
<PAGE>
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of a Warrant
Certificate and indemnity satisfactory to it, and in case of mutilation upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to such Holder.
11. OFFICE OF COMPANY
As long as any of the Warrants remain outstanding, the Warrant Agent, on
behalf of the Company, shall maintain an office or agency (which shall be the
principal executive offices of the Warrant Agent) where the Warrants may be
presented for exercise, registration of transfer, division or combination as
provided in this Warrant Agreement.
12. APPRAISAL
The determination of the Appraised Value per share of Common Stock shall be
made by an investment banking firm of nationally recognized standing selected by
the Company. The Company shall retain, at its sole cost, such investment banking
firm as may be necessary for the determination of Appraised Value required by
the terms of this Warrant Agreement.
13. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by a Holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of a Holder hereof, shall give rise to any liability of such Holder
for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
14. CONCERNING THE WARRANT AGENT
The Warrant Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the Holders, by their acceptance of the Warrants, shall be bound:
14.1 Correctness of Statement. The Statements contained herein and in the
Warrant certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates except as herein otherwise provided.
14.2 Breach of Covenants. The Warrant Agent shall not be responsible for
any failure of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied by the Company.
<PAGE>
14.3 Reliance on Counsel. The Warrant Agent may consult at any time with
counsel satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any Holder
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion or the advice of such counsel.
14.4 Reliance on Documents. The Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any action taken in reliance
on any Warrant Certificate, certificate of shares, notice, resolution, waiver,
consent, order certificate, or other paper, document or instrument believed by
it to be genuine and to have signed, sent or presented by the proper party or
parties.
14.5 Compensation. The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and other charges of any kind and nature incurred
by the Warrant Agent in the execution of this Agreement to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of its negligence or bad faith.
14.6 Legal Proceedings. The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as it may consider proper,
whether with or without any such security indemnity. All rights of action under
this Agreement or under any of the Warrant Certificates may be enforced by the
Warrant agent without possession of any of the Warrant Certificates or the
production thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the Holders, as their respective rights or interests may
appear.
14.7 Other Transactions in Securities of the Company. Except as prohibited
by law, the Warrant Agent, and any stockholder, director, officer or employee of
it, may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
<PAGE>
14.8 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent for the Company, and its duties shall be determined solely by
the provisions hereof. The Warrant Agent shall not be liable for anything which
it may do or refrain from doing in connection with this Agreement except for its
own negligence or bad faith.
14.9 Adjustments to the Number of Warrant Shares. The Warrant Agent shall
not at any time be under any duty or responsibility to any Holder to make or
cause to be made any adjustment of the Exercise Price or number of the Warrant
Shares deliverable as provided in this Agreement, or to determine whether any
facts exist which may require any of such adjustments, or with respect to the
nature or extent of any such adjustments, when made, or with respect to the
method employed in making the same. The Warrant Agent shall not be accountable
with respect to the validity or value or the kind or amount of any Warrant
Shares or of any securities or property which may at any time be issued or
delivered upon the exercise of the Warrant of any Warrant or with respect to
whether any such Warrant Shares or other securities will be when issued be
validly issued and fully paid and nonassessable, and makes no representation
with respect thereto.
15. MISCELLANEOUS
15.1. Nonwaiver. No course of dealing or any delay or failure to exercise
any right hereunder on the part of any Holder shall operate as a waiver of such
right or otherwise prejudice Holder's rights, powers or remedies.
15.2. Notice Generally. Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant Agreement shall be sufficiently given or made if
in writing and either (i) delivered in person with receipt acknowledged, (ii)
sent by registered or certified mail, return receipt requested, postage prepaid,
or (iii) by telecopy and confirmed by telecopy answer back, addressed as
follows:
(a) If to any Holder or holder of Warrant Stock, at its last known
address appearing on the books of the Company maintained by the Warrant
Agent for such purpose;
(b) If to the Warrant Agent, at 85 Challenger Road, Overpeck Center,
Ridgefield Park, New Jersey 07660; Attn: Corporate Secretary; or
(c) If to the Company, at 11550 Norte Meridian Street, Suite 600
Carmel, Indiana 46032; Attn: Corporate Secretary;
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by telecopy
answerback, or three (3) Business Days after the same shall have been deposited
in the United States mail. Failure or delay in delivering copies of any notice,
demand, request, approval, declaration, delivery or other communication to the
person designated above to receive a copy shall in no way adversely affect the
effectiveness of such notice, demand, request, approval, declaration, delivery
or other communication.
<PAGE>
15.3. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions set
forth herein, and the Warrant Agent hereby accepts such appointment.
15.4. Successors and Assigns. This Warrant Agreement and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company, the Warrant Agent and the successors and assigns of
each Holder. The provisions of this Warrant Agreement are intended to be for the
benefit of all Holders from time to time of a Warrant or Warrants and holders of
Warrant Stock, and shall be enforceable by any such Holder or holder of Warrant
Stock.
15.5. Amendment. The Company and the Warrant Agent may from time to time
supplement or amend this Warrant Agreement without the approval of any Holders
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions or change in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not adversely affect the interests of any
Holder.
15.6. Severability. Wherever possible, each provision of this Warrant
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Warrant Agreement.
15.7. Headings. The headings used in this Warrant Agreement are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant Agreement.
15.8. Governing Law. This Warrant Agreement shall be governed by the laws
of the State of New York, without regard to the provisions thereof relating to
conflict of laws.
<PAGE>
IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this
Warrant Agreement to be duly executed as of the date first written above.
ANACOMP, INC.
By:---------------------------------
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:---------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
WARRANT
ANACOMP, INC.
No. ------------------
Incorporated Under the Laws of the State of Indiana
THIS CERTIFIES THAT, for value received, ----------------------, the
registered holder hereof or registered assigns (the "Holder"), is entitled to
purchase from ANACOMP, INC., an Indiana corporation (the "Company"), at any time
commencing with the opening of business on the day of issuance by the Company of
this Certificate, and until the close of business on June 3, 2001 (the
"Expiration Date"), at the purchase price of $12.23 (subject to adjustment as
described below) per whole share (the "Current Warrant Price"), the number of
fully paid and nonassessable shares of Common Stock, par value $0.01 per share
(the "Common Stock"), of the Company set forth above. The number of shares
purchasable upon exercise of each Warrant and the Current Warrant Price per
whole share shall be subject to adjustment from time to time as set forth in the
Warrant Agreement referred to below.
The Warrants represented hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Subscription Form included
herein duly executed, which signature shall be guaranteed by a bank or trust
company having an office or correspondent in the United States or a broker or
dealer which is a member of a registered securities exchange or the National
Association of Securities Dealers, Inc., and simultaneous payment of the Current
Warrant Price multiplied by the number of Warrants being exercised at the
principal office of ChaseMellon Shareholder Services, L.L.C. (the "Warrant
Agent") at 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey
07660. Payment of such price shall be made at the option of the Holder hereof by
certified or official bank check.
The Warrants represented hereby are of a duly authorized issue of Warrants
evidencing the right to purchase an aggregate of 362,694 shares of Common Stock
and are issued under and in accordance with a Warrant Agreement (the "Warrant
Agreement"), dated as of June 4, 1996, between the Company and the Warrant Agent
and are subject to the terms and provisions contained in the Warrant Agreement,
to all of which the Holder of this Warrant Certificate by acceptance hereof
consents. A copy of the Warrant Agreement is available for inspection at the
principal office of the Company.
<PAGE>
Upon any partial exercise of the Warrants represented hereby, there shall
be countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants represented
hereby shall not have been exercised. The Warrants represented hereby may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate properly endorsed either separately or in combination with one or
more other Warrant Certificates for one or more new Warrant Certificates
representing Warrants entitling the Holder thereof to purchase the same
aggregate number of shares as were purchased on exercise of the Warrant or
Warrants exchanged. No fractional shares will be issued upon the exercise of
these Warrants. Subject to compliance with applicable securities laws, the
Warrants represented hereby are transferable at the office of the Warrant Agent,
in the manner and subject to the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant Certificate as the absolute owner hereof
for any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the books of the Company, any notice to the
contrary notwithstanding, and until such transfer on such books, the Company may
treat the Holder hereof as the owner for all purposes.
The Warrants represented hereby do not entitle any Holder hereof to any of
the rights of a shareholder of the Company.
The Warrants represented hereby shall not be valid or obligatory for any
purpose until this Warrant Certificate shall have been countersigned by the
Warrant Agent.
<PAGE>
Witness the facsimile seal of the Company and the facsimile signatures of
its duly authorized officers.
Dated: [----------------]
Countersigned and Registered:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Warrant Agent
By:-------------------------------
Authorized Signature
ANACOMP, INC.
By:-----------------------------------
President or
Vice President
Attest:-------------------------------
Secretary or
Assistant Secretary
<PAGE>
EXHIBIT B
SUBSCRIPTION FORM
[To be executed only upon exercise of a Warrant or Warrants]
The undersigned registered owner of the Warrant(s) represented by Warrant
Certificate No. [-------] irrevocably exercises [-------] Warrant(s) for the
purchase of [-------] shares of Common Stock of ANACOMP, INC. and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
the Warrant Agreement and requests that certificates for the shares of Common
Stock hereby purchased (and any securities or other property issuable upon such
exercise) be issued in the name of and delivered to [--------------] whose
address is [--------------] and, if such shares of Common Stock shall not
include all of the shares of Common Stock issuable as provided in the Warrant
Certificate, that a new Warrant Certificate of like tenor and date for the
balance of the shares of Common Stock issuable thereunder be delivered to the
undersigned.
-----------------------------------
(Name of Registered Owner)
-----------------------------------
(Signature of Registered Owner)
-----------------------------------
(Street Address)
- - ----------------------------------- -----------------------------------
(Signature Guarantee) (City)(State) (Zip Code)
NOTICE: The signature on this subscription form must correspond with the name
as written upon the face of the Warrant in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
Witness the facsimile seal of the Company and the facsimile signatures of
its duly authorized officer.
Dated: [-----------------]
Countersigned and Registered:
- - ----------------------------------------
CHASE MELLON SHAREHOLDER SERVICES, L.L.C
as Warrant Agent
By:-------------------------------------
Authorized Signature
Stan Stierkowski
Vice President
ANACOMP, INC.
By:-------------------------------------
President and Chief Executive Officer
Attest:---------------------------------
Secretary
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of the Warrant(s)
represented by Warrant Certificate No. [-------] hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under the Warrant Agreement, with respect to the number of shares of Common
Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
- - ---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint [---------------]
attorney-in-fact to register such transfer on the books of ANACOMP, INC.
maintained for the purpose, with full power of substitution in the premises.
Dated:-------------------------- Print Name:-------------------------------
Signature:--------------------------------
Witness:----------------------------------
- - -------------------------------
(Signature Guarantee)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF WARRANT CERTIFICATE
_____________ WARRANT
ANACOMP, INC.
No._____________________________
Incorporated Under the Laws of the State of Indiana.
THIS CERTIFIES THAT, for value received, ___________________, the
registered holder hereof or registered assigns (the "Holder"), is entitled to
purchase from ANACOMP, INC., an Indiana corporation (the "Company"), at any time
commencing with the opening of business on the day of issuance by the Company of
this Certificate, and until the close of business on June 3, 2001 (the
"Expiration Date"), at the purchase price of $12.23 (subject to adjustment as
described below) per whole share (the "Current Warrant Price"), the number of
fully paid and nonassessable shares of Common Stock, par value $0.01 per share
(the "Common Stock"), of the Company set forth above. The number of shares
purchasable upon exercise of each Warrant and the Current Warrant Price per
whole share shall be subject to adjustment from time to time as set forth in the
Warrant Agreement referred to below.
The Warrants represented hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Subscription Form included
herein duly executed, which signature shall be guaranteed by a bank or trust
company having an office or correspondent in the United States or a broker or
dealer which is a member of a registered securities exchange or the National
Association of Securities Dealers, Inc., and simultaneous payment of the Current
Warrant Price multiplied by the number of Warrants being exercised at the
principal office of ChaseMellon Shareholder Services, L.L.C. (the "Warrant
Agent") at 85 Challanger Road, Overpeck Centre, Ridgefield Park, New Jersey
07660. Payment of such price shall be made at the option of the Holder hereof by
certified or official bank check.
The Warrants represented hereby are of a duly authorized issue of Warrants
evidencing the right to purchase an aggregate of 362,694 shares of Common Stock
and are issued under and in accordance with a Warrant Agreement (the "Warrant
Agreement"), dated as of June 4, 1996, between the Company and the Warrant Agent
and are subject to the terms and provisions contained in the Warrant Agreement,
to all of which the Holder of this Warrant Certificate by acceptance hereof
consents. A copy of the Warrant Agreement is available for inspection at the
principal office of the Company.
<PAGE>
Upon any partial exercise of the Warrants represented hereby, there shall
be countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants represented
hereby shall not have been exercised. The Warrants represented hereby may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate properly endorsed either separately or in combination with one or
more other Warrant Certificates for one or more new Warrant Certificates
representing Warrants entitling the Holder thereof to purchase the same
aggregate number of shares as were purchased on exercise of the Warrant or
Warrants exchanged. No fractional shares will be issued upon the exercise of
these Warrants. Subject to compliance with applicable securities laws, the
Warrants represented hereby are transferable at the office of the Warrant Agent,
in the manner and subject to the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent and all
other persons dealing with this Warrant Certificate as the absolute owner hereof
for any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the books of the Company, any notice to the
contrary notwithstanding, and until such transfer on such books, the Company may
treat the Holder hereof as the owner for all purposes.
The Warrants represented hereby do not entitle any Holder hereof to any of
the rights of a shareholder of the Company.
The Warrant represented hereby shall not be valid or obligatory for any
purpose until this Warrant Certificate shall have been countersigned by the
Warrant Agent.
Witness the facsimile seal of the Company and the facsimile signatures of
its duly authorized officers.
Dated: [___________________________]
Countersigned and Registered:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Warrant Agent
By:_________________________________
Authorized Signature
ANACOMP, INC.
By:__________________________________
Chairman of the Board and President
Attest:______________________________
Secretary
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
ANACOMP, INC.
and Subsidiaries
--------------------------------------------
SECURITY AND PLEDGE AGREEMENT
Dated as of June 4, 1996
--------------------------------------------
THE BANK OF NEW YORK, as Trustee
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
SECTION 1.01. Terms Defined in the Indenture.............................1
SECTION 1.02. ...........................................................1
ARTICLE 2 GRANT OF SECURITY INTEREST
SECTION 2.01. Security Interest..........................................7
SECTION 2.02. No Release.................................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Title and Authority........................................8
SECTION 3.02. Filings....................................................8
SECTION 3.03. Validity of Security Interest..............................9
SECTION 3.04. Absence of Other Liens.....................................9
SECTION 3.05. Pledged Securities.........................................9
SECTION 3.06. Accounts Receivable.......................................10
SECTION 3.07. Lockboxes.................................................10
SECTION 3.08. Copyrights, Patents and Trademarks........................10
ARTICLE 4 COVENANTS
SECTION 4.01. Further Documentation, Pledge of Instruments..............11
SECTION 4.02. Notices Regarding Collateral..............................12
SECTION 4.03. Compliance with Laws......................................12
SECTION 4.04. Maintenance of Records....................................12
SECTION 4.05. Protection of Security....................................12
SECTION 4.06. Location of Offices.......................................12
SECTION 4.07. Covenants Regarding Collateral
Consisting of Intellectual Property.......................13
SECTION 4.08. Subsidiary Grantors.......................................14
SECTION 4.09. Administration of Receivables; Lockboxes..................15
SECTION 4.10. Maintenance of Inventory..................................15
ARTICLE 5 PLEDGED SECURITIES
SECTION 5.01. Delivery of Pledged Securities............................15
SECTION 5.02. Voting Rights; Dividends; etc.............................17
ARTICLE 6 THE TRUSTEE
SECTION 6.01. Trustee's Appointment as Attorney-in-Fact.................19
SECTION 6.02. Release and Substitution of Collateral....................21
SECTION 6.03. Cash Collateral Account...................................21
SECTION 6.04. Indemnification of Trustee................................22
<PAGE>
ARTICLE 7 REMEDIES
SECTION 7.01. Remedies; Rights Upon Default.............................22
SECTION 7.02. Private Sales.............................................25
SECTION 7.03. Authorization to Issuers..................................26
SECTION 7.04. Grant of License to Use Intellectual Property.............26
ARTICLE 8 LOCKBOXES; PROCEEDS; COLLECTION
OF ACCOUNTS RECEIVABLE
SECTION 8.01. Lockboxes.................................................26
SECTION 8.02. Collection of Accounts Receivable Prior to Default........27
SECTION 8.03. Directed Funds............................................27
SECTION 8.04. Collection of Accounts Receivable During Default..........27
SECTION 8.05. Special Collateral Account................................27
ARTICLE 9 MISCELLANEOUS
SECTION 9.01. Notices...................................................28
SECTION 9.02. Severability..............................................28
SECTION 9.03. No Waiver; Remedies Not Exclusive.........................28
SECTION 9.04. Amendments, Etc...........................................29
SECTION 9.05. Termination...............................................29
SECTION 9.06. GOVERNING LAW.............................................29
SECTION 9.07. Consent to Jurisdiction and Service of Process............29
SECTION 9.08. Conflicts with TIA; Indenture.............................30
SECTION 9.09. Survival of Obligations...................................30
SECTION 9.10. Successors and Assigns....................................30
SECTION 9.11. Counterparts..............................................30
SECTION 9.12. Descriptive Headings......................................30
SECTION 9.13. Expenses..................................................30
SECTION 9.14. Continuing Security Interest: Transfer of Notes...........31
SECTION 9.15. Security Interest Absolute................................31
SECTION 9.16. Further Assurances........................................32
SECTION 9.17. Rules of Construction.....................................33
<PAGE>
Exhibits
Exhibit A Perfection Certificate
Schedule 1 to Perfection Certificate
Schedule 3A to Perfection Certificate
Schedule 3B to Perfection Certificate
Exhibit B Form of Supplement (Additional Restricted Subsidiary)
Exhibit C Form of Supplement (Additional Pledged Securities)
Schedules
Schedule I Grantor Names
Schedule II Patents
Schedule III Pledged Securities
Schedule IV Locations of Real Property
Schedule V Trademarks
Schedule VI Lockbox Accounts
Schedule VII Chief Executive Office, etc.
Schedule VIII Copyrights
Schedule IX Pending Intellectual Property Litigation
<PAGE>
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT, dated as of June 4, 1996, among ANACOMP,
INC., an Indiana corporation (the "Company Grantor"), THE U.S. RESTRICTED
SUBSIDIARIES LISTED ON SCHEDULE I, ANY OTHER U.S. RESTRICTED SUBSIDIARIES AS MAY
FROM TIME TO TIME BECOME PARTIES HERETO PURSUANT TO SECTION 4.08 (each U.S.
Restricted Subsidiary and each such other U.S. Restricted Subsidiary being a
"Subsidiary Grantor" and, together with the Company Grantor, the "Grantors"),
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"Trustee") under the indenture dated as of the date hereof (as amended,
supplemented or modified from time to time, the "Indenture") relating to the
Company Grantor's 11 5/8% Senior Secured Notes due 1999 (the "Notes").
In order to secure the performance of the Obligations, the parties hereto
are entering into this Agreement regarding the terms and conditions of the
Grantors' grant of the Security Interest in the Collateral to the Trustee for
the benefit of the Noteholders.
NOW, THEREFORE, in consideration of the premises and the other benefits to
the Grantors and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Definitions
SECTION 1.01. Terms Defined in the Indenture. Capitalized terms used herein
(including in the preamble hereto) and not otherwise defined herein shall have
the meanings assigned to such terms in the Indenture.
SECTION 1.02. The following terms, as used herein (including in the
preamble hereto), shall have the following meanings:
"Accounts Receivable" means accounts as defined in the Code.
"Agreement" means this Security and Pledge Agreement, as the same may
from time to time be amended, supplemented or modified in accordance with
its terms and the terms of the Indenture.
"Business" is the collective reference to all of the lines of business
in which the Grantors are engaged from time to time.
"CashCollateral Account" means the account established pursuant to
Section 6.03.
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"Collateral" means, for purposes of this Agreement, any and all
personal property of each of the Grantors, whether now owned or hereafter
acquired, including, without limitation, any and all (i) Documents, (ii)
Equipment (including Fixtures), (iii) General Intangibles, including,
without limitation, claims of such Grantor for damages arising out of or
for breach of or a default under any contract and the right of such Grantor
to perform or to compel performance under any contract and to exercise all
remedies thereunder, (iv) Pledged Securities, (v) Accounts Receivable, (vi)
Inventory, (vii) Copyrights, (viii) Copyright Licenses, (ix) Patents, (x)
Patent Licenses, (xi) Trademarks, (xii) Trademark Licenses, (xiii)
Proceeds, (xiv) other goods and personal property of such Grantor, whether
tangible or intangible or whether now owned or hereafter acquired, by such
Grantor and wherever located, (xv) instruments, files, records, ledger
sheets and documents, whether now owned or hereafter acquired, covering or
relating to any of the Collateral, including, without limitation, customer
lists, credit files, computer programs, printouts and other computer
materials and records and (xvi) cash, obligations and any other amounts
held from time to time in the Cash Collateral Account, but excluding any of
the foregoing which constitute Non-Assignable Contracts.
"Concentration Account" means the Company's demand deposit account
established with Bank One, Indianapolis, N.A. at its office located at 111
Monument Circle, Indianapolis, Indiana, 46297, or such other deposit
account from time to time established by the Company and of which the
Company has notified the Trustee.
"Copyright License" means any agreement, now or hereafter in effect,
granting any right to any Person under any Copyright now or hereafter owned
by any of the Grantors or which any of the Grantors otherwise has the right
to license, or granting any right to any of the Grantors under any
Copyright now or hereafter owned by any Person, and all rights of any of
the Grantors under any such agreement.
"Copyrights" means all the following: (i) all copyright rights in any
work (including, without limitation, computer programs, software,
including, without limitation, all source code and object code, development
documentation, programming tools, drawings, specifications and data)
subject to the copyright laws of the United States or any other country or
jurisdiction, whether as author, assignee, transferee, licensee or
otherwise, and (ii) all registrations and applications for registration of
any such copyright in the United States or any other country or
jurisdiction, including, without limitation, registration, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office.
"Documents" has the meaning given such term under the Uniform
Commercial Code.
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"Equipment" has the meaning given such term under the Uniform
Commercial Code, and, in any event includes, without limitation, all
machinery, equipment, furnishings, vehicles, computers and other electronic
data-processing and office equipment, whether now owned or hereafter
acquired, by any Grantor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon
or affixed thereto. The term "Equipment" shall include Fixtures.
"Fixtures" means all items of equipment, in all its forms, wherever
located, whether now or hereafter owned or acquired, of any Grantor and all
parts thereof or accessions thereto that are now or hereafter owned by any
Grantor that become so related to particular real estate that an interest
in such items of such equipment arises under any real estate law applicable
thereto.
"General Intangibles" has the meaning given such term under the
Uniform Commercial Code, and, in any event includes, without limitation,
manuals, blueprints, know-how, warranties and records in connection with
the Equipment; all information, customer lists, identification of
suppliers, data, plans, blueprints, specification designs, drawings,
recorded knowledge, surveys, engineering reports, test reports, manuals,
materials, standards, catalogs, research data, computer and automatic
machinery software and programs and the like pertaining to operations by
any Grantor; all information relating to sales of products now or hereafter
manufactured by any Grantor; all accounting information pertaining to any
Grantor's operations or any of the Equipment, any other items set forth in
this definition and all media in which or on which any of the information
or knowledge or data or records relating to such operations or any of such
Equipment or any other items set forth in this definition may be recorded
or stored and all computer programs used for the compilation or printout of
such information, knowledge, records or data; all licenses, consents,
permits, variances, certifications and approvals of Governmental
Authorities now or hereafter held by any Grantor pertaining to operations
now or hereafter conducted by any Grantor; all choses in action and causes
of action; and all other intangible personal property of any Grantor of
every kind and nature now owned or hereafter acquired by any Grantor,
including, without limitation, corporate or other business records,
indemnification claims, contract rights, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim or
security interest.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator having jurisdiction
over any Grantor.
"Intellectual Property" means any and all Patents, Trademarks,
Licenses, Copyrights, mask works, designs, trade secrets, technology,
inventions, discoveries and improvements, technical information,
confidential and proprietary information, procedures, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records and all other intellectual property
rights, whether or not subject to statutory registration or protection.
<PAGE>
"License" means any Patent License, Trademark License, Copyright
License or other license or sub-license.
"Lockboxes" shall have the meaning ascribed to such term in Section
3.07.
"Non-Assignable Contract" means any contract or agreement or right
under any contract or agreement to which any Grantor is a party in which,
by its terms or pursuant to applicable law, a security interest may not be
granted without the consent of another party to such contract or agreement
or without a consent, filing, authorization or other act of a Governmental
Authority or other Person, which consent, filing, authorization or other
act has not been obtained or made or is not in full force and effect, and
which, if such contract or agreement was entered into after the date of
this Agreement, either (i) provides for payments by or to the Grantors or
the provision of goods or services by or to the Grantors of an aggregate
amount not in excess of $200,000 per year or (ii) provides for payments by
or to the Grantors and/or the provision of goods or services to the
Grantors in an aggregate amount of $200,000 per year or more and as to
which such Grantor has used its reasonable commercial efforts to obtain or
make such consent, filing, authorization or other act.
"Noteholders" means the holders, from time to time, of the Notes.
"Obligations" means the Indenture Obligations.
"Patent License" means any agreement, now or hereafter in effect,
granting to any Person any right to make, use or sell any invention under
any Patent, now or hereafter owned or licensable by any of the Grantors, or
granting to any of the Grantors any right to make, use or sell any
invention under any Patent, now or hereafter owned by any Person, and all
rights of any of the Grantors under any such agreement.
"Patents" means all the following: (i) all letters patent of the
United States or any other country or jurisdiction, all registrations and
recordings thereof, and all applications for letters patent of the United
States or any other country or jurisdiction, including, without limitation,
registrations, recordings and pending applications in the United States
Patent and Trademark Office or any similar offices in any other country or
jurisdiction; and (ii) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including, without limitation, all the
foregoing items listed in Schedule II.
"Perfection Certificate" means the Perfection Certificate
substantially in the form of Exhibit A.
"Pledged Securities" means (a) all the shares of Capital Stock of the
Subsidiary Grantors, (b) all the shares of Capital Stock of the Foreign
Restricted Subsidiaries owned directly by a Grantor, except to the extent,
according to an Opinion of Counsel, that the pledge of the Capital Stock of
a Foreign Restricted Subsidiary is restricted by the foreign law in which
such Foreign Restricted Subsidiary is organized and (c) all the promissory
notes issued or payable to the Grantors or their order, all such shares and
notes being listed on Schedule III, and shall also include:
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(i) the certificates and instruments representing the Pledged
Securities and any interest of any Grantor in the entries on the books
of any financial intermediary pertaining to the Pledged Securities,
and all principal, interest, premiums, dividends, cash, options,
warrants, rights, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed with respect to
or in exchange for or upon the conversion of any or all the Pledged
Securities (except as otherwise set forth in Section 5.02);
(ii) (1) all additional shares of Capital Stock issued by any
Subsidiary Grantor and (2) all additional shares of Capital Stock
issued by any Foreign Restricted Subsidiary (collectively, "Additional
Shares"), to the extent such Additional Shares are acquired by any
Grantor in any manner, and the certificates representing such
Additional Shares and any interest of any Grantor in the entries on
the books of any financial intermediary pertaining to such Additional
Shares, and all dividends, cash, options, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed with respect to or in exchange for
any of or all such Additional Shares (except as otherwise set forth in
Section 5.02);
(iii) (1) all shares of Capital Stock of any Person which,
subsequent to the date of this Agreement, becomes, as a result of any
occurrence, a Subsidiary Grantor and (2) all shares of Capital Stock
of any Person which, subsequent to the date of this Agreement,
becomes, as a result of any occurrence, a Foreign Restricted
Subsidiary (including, without limitation, as a result of designation
as such pursuant to Section 4.14 of the Indenture) (collectively,
"Acquired Shares"), to the extent such Acquired Shares are acquired by
any Grantor in any manner, and the certificates representing such
Acquired Shares and any interest of any Grantor in the entries on the
books of any financial intermediary pertaining to such Acquired
Shares, and all dividends, cash, options, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed with respect to or in exchange for
any of or all such Acquired Shares (except as otherwise set forth in
Section 5.02);
(iv) all additional promissory notes issued or payable to any
Grantor or its order, including, without limitation, intercompany
notes (collectively, "Additional Notes"), to the extent such
Additional Notes are acquired by any Grantor in any manner, and the
certificates and instruments representing such Additional Notes and
any interest of any Grantor in the entries on the books of any
financial intermediary pertaining to such Additional Notes, and all
payments of principal, interest, premium, cash, options, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed with respect to or in
exchange for or upon the conversion of any or all such Additional
Notes (except as otherwise set forth in Section 5.02);
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(v) subject to Section 5.02, all rights and privileges of each
Grantor with respect to all the foregoing; and
(vi) subject to Section 5.02, all Proceeds of any of the
foregoing;
provided, that in no case shall Pledged Securities include to the
extent required by applicable law, directors' qualifying shares.
"Proceeds" has the meaning given such term under the Uniform
Commercial Code and, in any event, includes, without limitation, (a) any
consideration from the sale, exchange or other disposition of any asset or
property that constitutes Collateral (regardless of the form such
consideration takes and including, without limitation, all funds and other
items of value paid, deposited or credited to or held in the Lockboxes),
(b) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable from time to time with respect to any of the Collateral, (c) any
and all payments (in any form whatsoever) made or due and payable from time
to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any Person acting under color of governmental
authority), (d) any and all amounts received upon any collection, exchange,
transfer, sale or other disposition (whether such disposition is voluntary
or involuntary) of any of the Collateral and any property into which any of
the Collateral is converted, whether cash or noncash proceeds, including,
without limitation, all rights to payment, including returned premiums,
with respect to any insurance relating thereto, and (e) any and all other
products of, or any rents, profits, income or other amounts from time to
time paid or payable under or in connection with any of the Collateral,
including, without limitation, any claim of any of the Grantors against any
Person for (and the right to sue and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past,
present or future infringement of any Patent now or hereafter owned by any
of the Grantors or owned by any other Person but with respect to which any
of the Grantors now or hereafter has the right to sue and recover for its
own account damages for infringement or dilution, (ii) past, present or
future infringement or dilution of any Trademark now or hereafter owned by
any of the Grantors or owned by any other Person but with respect to which
any of the Grantors now or hereafter has the right to sue and recover for
its own account damages for infringement or dilution or injury to the
goodwill associated with or symbolized by any Trademark now or hereafter
owned by any of the Grantors, (iii) past, present or future breach of any
License and (iv) past, present or future infringement of any Copyright now
or hereafter owned by either Grantor or owned by any other Person but with
respect to which any of the Grantors now or hereafter has the right to sue
and recover for its own account damages for infringement or dilution.
<PAGE>
"Properties" means the real property owned or leased by any of the
Grantors at the locations listed on Schedule IV.
"Related Tangible Personal Property" means, with respect to any
Intellectual Property, tangible personal property now owned or hereafter
acquired by any of the Grantors in which such Intellectual Property is
embodied, such as hard copies of computer code and related documentation
and copies of computer code and related documentation, stored in any
medium, including, without limitation, on disk or tape.
"Security Interest" has the meaning ascribed to such term in Section
2.01.
"Trademark License" means any agreement, now or hereafter in effect,
granting to any Person any right to use any Trademark now or hereafter
owned or licensable by any of the Grantors, or granting to any Grantor any
right to use any Trademark now or hereafter owned by any Person, and all
rights of any Grantor under any such agreement.
"Trademarks" means all the following: (i) all trademarks, service
marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source
or business identifiers, designs, all other names and slogans embodying
business or product goodwill (or both) and general intangibles of like
nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all registration and recording applications
filed in connection therewith, including, without limitation, registrations
and registration applications in the United States Patent and Trademark
Office, any State of the United States or any similar offices in any other
country or jurisdiction or any political subdivision thereof, and all
extensions or renewals thereof, (ii) all goodwill associated therewith or
symbolized thereby and (iii) all other assets, rights and interests that
uniquely reflect or embody such goodwill, including, without limitation,
all the foregoing items listed on Schedule V.
ARTICLE 2
Grant of Security Interest
SECTION 2.01. Security Interest. (a) Subject to Section 2.01(b), as
security for the payment and performance of the Obligations (whether now
existing or hereafter arising, and including future advances as applicable),
each of the Grantors hereby bargains, sells, conveys, assigns, sets over,
mortgages, pledges, hypothecates and transfers to the Trustee, its successors
and assigns, for the ratable benefit of the Noteholders, and hereby grants to
the Trustee, its successors and its assigns, for the ratable benefit of the
Noteholders, a security interest in and a lien on all such Grantor's right,
title and interest in, to and under the Collateral, whether now owned and held
or hereafter acquired (collectively, the "Security Interest").
<PAGE>
(b) Anything herein or in any other Collateral Document to the contrary
notwithstanding, the maximum amount of Obligations secured by the Security
Interests granted by any Subsidiary Grantor hereunder and under the other
Collateral Documents shall in no event exceed the amount which can be secured by
and be enforceable against such Subsidiary Grantor under applicable federal and
state statutes relating to the insolvency of debtors.
SECTION 2.02. No Release. Nothing set forth in this Agreement shall relieve
any of the Grantors from the performance of any term, covenant, condition or
agreement on such Grantor's part to be performed or observed under or in respect
of any of the Collateral or from any liability to any Person under or in respect
of any of the Collateral or impose any obligation on the Trustee or any
Noteholder to perform or observe any such term, covenant, condition or agreement
on any Grantor's part to be so performed or observed or impose any liability on
the Trustee or any Noteholder for any act or omission on the part of such
Grantor relating thereto or for any breach of any representation or warranty on
the part of such Grantor contained in any Collateral Document or in respect of
the Collateral or made in connection therewith.
ARTICLE 3
Representations and Warranties
Each Grantor represents and warrants to and with the Trustee and each
Noteholder that:
SECTION 3.01. Title and Authority. The Grantors collectively have good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder and has full power and
authority to grant to the Trustee the Security Interest in such Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other Person other than any consent or approval that has been obtained.
SECTION 3.02. Filings. The Perfection Certificate has been duly prepared,
completed and executed and the information set forth therein is correct and
complete in all material respects. Fully executed Uniform Commercial Code
financing statements or other appropriate filings, recordings, registrations or
other actions containing a description of the Collateral have been delivered for
filing in each governmental, regulatory or other office specified in Schedule
III to the Indenture, which are all the filings, recordings, registrations and
other actions that are necessary or advisable to publish notice of the, to
perfect, preserve and protect the validity of the, and to establish a valid and
perfected, security interest in favor of the Trustee (for the ratable benefit of
the Noteholders) in respect of all Collateral (other than Fixtures, except
Fixtures appurtenant to the Properties) in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its States, territories and possessions or
any other country or jurisdiction, and no further or subsequent filing,
refiling, recording, rerecording, registration, reregistration or other action
is necessary in any such jurisdiction, except as provided under applicable law
with respect to the filing of continuation or similar statements.
<PAGE>
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a valid and enforceable security interest in all the Collateral
securing the payment and performance of the Obligations and (b) subject to the
filing of all of the filings described in Section 3.02, a perfected security
interest in all Collateral (other than Fixtures, except Fixtures appurtenant to
the Properties) in which a security interest may be perfected by filing,
recording, registering or taking other action with respect to a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its States, territories and possessions pursuant to the
Uniform Commercial Code or other applicable law in such jurisdictions or any
other country or jurisdiction. The Security Interest is and shall be prior to
any other Lien on any of the Collateral, other than Permitted Liens.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except Permitted Liens. Other than as
otherwise contemplated hereby, the Grantors have not filed or consented to the
filing of (a) any financing statement or analogous document under the Uniform
Commercial Code of any jurisdiction or any other applicable laws covering any
Collateral or (b) any assignment in which the Grantors assign any Collateral or
any security agreement or similar instrument covering any Collateral with any
Federal, state or foreign governmental or regulatory authority, body or agency,
which financing statement or analogous document, assignment, security agreement
or similar instrument is still in effect.
SECTION 3.05. Pledged Securities. With respect to the Pledged Securities:
(a) the shares of Capital Stock constituting Pledged Securities
represent that percentage as set forth on Schedule III of the issued and
outstanding shares of each class of the Capital Stock of the issuer with
respect thereto; and the Pledged Securities represent all the Capital Stock
and promissory notes owned by, or issued or payable to, as the case may be,
the Grantors;
(b) except for the Security Interest created hereunder, each Grantor
listed as an owner on Schedule III of Pledged Securities (i) is and will at
all times continue to be the direct owner, beneficially and of record, of
such Pledged Securities, (ii) holds the same free and clear of all Liens
(other than Permitted Liens) and (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on (other than Permitted Liens), the Pledged
Securities, other than pursuant hereto or the other Collateral Documents,
and each Grantor, subject to Section 5.02, will cause any and all Pledged
Securities, whether for value paid by such Grantor or otherwise, to be
forthwith deposited with the Trustee and pledged or assigned hereunder;
(c) each Grantor (i) has the power and authority to pledge its Pledged
Securities in the manner hereby done or contemplated and (ii) will defend
its title or interest thereto or therein against any and all Liens (other
than Permitted Liens), however arising, of all Persons whomsoever;
<PAGE>
(d) no consent of any other Person (including stockholders or
creditors of each Grantor) and no consent or approval of any governmental
or regulatory authority, body or agency or any securities exchange was or
is necessary to the validity of the pledge effected hereby;
(e) all the Pledged Securities listed on Schedule III have been duly
authorized and validly issued and, to the extent the Pledged Securities are
shares of Capital Stock of a corporation, are fully paid and nonassessable
and all other Pledged Securities will be, when pledged hereunder, duly
authorized and validly issued and, to the extent the Pledged Securities are
shares of Capital Stock of a corporation, fully paid and nonassessable;
(f) all information set forth herein relating to the Pledged
Securities is accurate and complete in all respects as of the date hereof;
and
(g) the pledge of the Pledged Securities pursuant to this Agreement
does not violate Regulation G, T, U or X of the Federal Reserve Board or
any successor thereto as of the date hereof.
SECTION 3.06. Accounts Receivable. The names of the obligors, amounts
owing, due dates and other information with respect to the Accounts Receivable
are and shall be correctly stated in all material respects in all records of the
Grantors relating thereto and in all invoices and reports with respect thereto
furnished to the Trustee by the Grantors from time to time.
SECTION 3.07. Lockboxes. The lockboxes and related accounts identified on
Schedule VI are the only lockboxes and lockbox or similar accounts
(collectively, the "Lockboxes") to which as of the date hereof the Company
Grantor has directed that payments in respect of Accounts Receivable be made by
Accounts Receivable debtors.
SECTION 3.08. Copyrights, Patents and Trademarks. Schedule VIII hereto
includes all Copyrights and Copyright Licenses owned by the Grantors in their
own names as of the date hereof. Schedule II hereto includes all Patents and
Patent Licenses owned by the Grantors in their own names as of the date hereof.
Schedule V hereto includes all Trademarks and Trademark Licenses owned by the
Grantors in their own names as of the date hereof. To the best of the Company
Grantor's knowledge, each Copyright, Patent and Trademark is valid, subsisting,
unexpired, enforceable and has not been abandoned. Except as set forth in
Schedule VIII, II or V, none of such Copyrights, Patents and Trademarks is the
subject of any licensing or franchise agreement. No holding, decision or
judgment has been rendered by any Governmental Authority which would limit,
cancel or question the validity of any Copyright, Patent or Trademark. Except as
disclosed on Schedule IX, no action or proceeding is pending (i) seeking to
limit, cancel or question the validity of any Copyright, Patent or Trademark, or
(ii) which, if adversely determined, would have a material adverse effect on the
business, properties, operations or financial condition of the Company and its
Subsidiaries taken as a whole.
<PAGE>
ARTICLE 4
Covenants
Each of the Grantors covenants and agrees from and after the date of this
Agreement and until the Obligations are paid in full or the Company complies
with the provisions of Section 8.1 of the Indenture, as follows:
SECTION 4.01. Further Documentation, Pledge of Instruments.
(i) Each of the Grantors agrees that at any time and from time to
time, at the expense of such Grantor, such Grantor shall promptly and duly
execute and deliver and effect all further instruments and documents and
take all further action that may be necessary or advisable in order to
perfect, preserve and protect and assure the priority Security Interest
granted or purported to be granted hereby or to enable the Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral, including, without limitation, the payment of any fees and
taxes required in connection with the execution and delivery of this
Agreement, the granting of the Security Interest and compliance with any
terms hereof and the filing of any Uniform Commercial Code financing or
continuation statements or other appropriate filings, recordings or
registrations, including all refilings, recordings and reregistrations,
containing a description of the Collateral in each governmental, regulatory
or other appropriate office in the United States (or any political
subdivision thereof) and its States, territories and possessions and any
other country or jurisdiction. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory
note or other instrument, such note or instrument shall (to the extent not
previously pledged and delivered pursuant to this Agreement) be immediately
pledged and delivered to the Trustee, duly endorsed in a manner
satisfactory to the Trustee. Without limiting the generality of the
foregoing, each of the Grantors shall: (1) at any reasonable time requested
by the Trustee, at the expense of the Grantors, allow the Trustee, or any
Person reasonably designated by the Trustee, to inspect the Collateral, all
evidence and records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located,
discuss such Grantor's affairs with the appropriate officers of such
Grantor and its independent accountants and verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and
status of or any other matter relating to the Collateral; and (2) at the
Trustee's request, appear in and defend any action or proceeding that may
affect such Grantor's right, title and interest in and to, or the Trustee's
Security Interest in and to, any of the Collateral.
<PAGE>
(ii) Each of the Grantors hereby authorizes the Trustee to file one or
more financing or continuation statements or other documents, and
amendments, supplements and other modifications thereto, relative to all or
any part of the Collateral without the signature of such Grantor, naming
such Grantor as debtor and the Trustee as secured party.
(iii) Each of the Grantors will promptly prepare and furnish to the
Trustee at any time and from time to time duly certified statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Trustee may reasonably
request.
SECTION 4.02. Notices Regarding Collateral. Each of the Grantors shall
advise the Trustee promptly of (i) any Lien (other than Permitted Liens) or
claim of a Lien made or asserted against any of the Collateral, (ii) any
material adverse change in the condition of the Collateral taken as a whole,
(iii) the occurrence of any other event that could have an adverse affect on the
Collateral taken as a whole or on the Security Interest created hereunder, (iv)
any change in its corporate structure or identity and (v) any change in,
addition to or deletion from any corporate or business name used by such Grantor
in the conduct of its businesses or in the ownership of its properties and
assets (including, without limitation, any trade name and any name used by such
Grantor for billing purposes) and, with respect to any change in any business
name used by such Grantor, such Grantor shall have taken all action reasonably
satisfactory to the Trustee to maintain the perfection, priority and proof of
the Security Interest created hereunder.
SECTION 4.03. Compliance with Laws. Each of the Grantors shall comply with
all applicable laws, rules, regulations and orders of any governmental or
regulatory authority, body or agency applicable to it or any of its property,
business, operations or transactions, a breach of which would have a material
adverse effect on the business, properties, operations or financial condition of
the Company and its Subsidiaries taken as a whole.
SECTION 4.04. Maintenance of Records. Each of the Grantors shall keep and
maintain at its own cost and expense satisfactory, accurate and complete records
of the Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and all other
dealings with the Collateral. Each of the Grantors will appropriately mark its
books and records pertaining to the Collateral to evidence this Agreement and
the Security Interest granted hereby.
SECTION 4.05. Protection of Security. Each of the Grantors shall, at its
own cost and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Trustee in the Collateral and the priority thereof against any Lien not
expressly permitted under the Indenture.
<PAGE>
SECTION 4.06. Location of Offices. Each of the Grantors shall keep its
chief executive offices, its principal place of business and the office where it
keeps its evidence and records concerning the Collateral (i) at the location
thereof specified in Schedule VII or (ii) at such new location as any of the
Grantors may establish; provided, that, in the case of clause (ii), (a) such
Grantor shall have given to the Trustee not less than three days' prior written
notice of its intention to change such location, clearly describing such new
location (which shall be in the continental United States of America), providing
such other information in connection therewith as the Trustee may request and
providing the Trustee with a revised Schedule VII reflecting such new location
and (b) with respect to such new location, such Grantor shall have taken all
action satisfactory to the Trustee to maintain the perfection, priority and
proof of the Security Interest to be created hereunder. Each of the Grantors
shall hold and preserve such evidence and records and shall permit
representatives of the Trustee at any time during normal business hours upon
reasonable notice to inspect and make abstracts from such evidence and records,
each of the Grantors agreeing to render to the Trustee, at such Grantor's cost
and expense, all clerical and other assistance as may be reasonably required
with regard thereto; provided that, so long as no Default or Event of Default
has occurred and is continuing, the Grantors shall not be required to permit
such inspections more frequently than quarterly.
SECTION 4.07. Covenants Regarding Collateral Consisting of Intellectual
Property. (a) No Grantor shall do, nor shall it permit, any act, or omit to do
any act, whereby any Patent determined by such Grantor to be material to the
conduct of the Business may become invalidated or dedicated to the public.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) shall, for each Trademark determined by such Grantor to be
material to the conduct of the Business, (i) maintain such Trademark in
full force free from any claim of abandonment or invalidity for no-use,
(ii) maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and
preserve its material rights under applicable law and (iv) not knowingly
use or knowingly permit the use of such Trademark in violation of any other
Person's rights.
(c) Each Grantor (either itself or through licensees) shall, for each
work covered by a Copyright determined by such Grantor to be material to
the conduct the Business, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its material rights under applicable
copyright laws.
(d) Each Grantor shall notify the Trustee immediately if it knows or
has reason to know that any Patent, Trademark or Copyright determined by
such Grantor to be material to the conduct of the Business may become
abandoned, lost or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any
such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country or jurisdiction) regarding such Grantor's
ownership of any Patent, Trademark or Copyright material to the conduct of
the Business, or its right to register the same or maintain the same.
<PAGE>
(e) If any Grantor, either itself or through any agent, employee,
licensee or designee, files an application for any Patent, Trademark or
Copyright (or for the registration of any patent, Trademark or Copyright)
which is determined by such Grantor to be material to the Business with the
United States Patent and Trademark Office, United States Copyright Office
or any office or agency in any political subdivision of the United States
or in any other country or jurisdiction or any political subdivision
thereof, it shall promptly notify the Trustee of such filing within 30 days
after the last day of the fiscal quarter during which such filing was made,
and, upon request of the Trustee, execute and deliver any and all
agreements, instruments, documents and papers as the Trustee may reasonably
request to evidence the Trustee's Security Interest in such Patent,
Trademark or Copyright, and each Grantor hereby appoints the Trustee as its
attorney-in-fact to execute and file such agreements, instruments,
documents or papers for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable until the Obligations have been paid in full.
(f) Each Grantor shall take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or
jurisdiction or any political subdivision thereof, to maintain and pursue
each application relating to the Patents, Trademarks or Copyrights that is
determined by such Grantor to be material to the conduct of the Business
(and to obtain the relevant grant or registration) and to maintain each
issued Patent and each registration of the Trademarks and Copyrights that
is determined by such Grantor to be material to the conduct of the
Business, including, without limitation, timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if appropriate under the circumstances (as
determined in the exercise of the good business judgment of such Grantor),
to initiate opposition, interference and cancellation proceedings against
third parties.
(g) Following and during the continuance of an Event of Default, each
Grantor shall upon the request of the Trustee use commercially reasonable
efforts to obtain all requisite consents or approvals by the licensor of
each Copyright License, Patent License or Trademark License constituting
part of the Collateral to effect the assignment of all the Grantors' right,
title and interest thereunder to the Trustee or its designee.
SECTION 4.08. Subsidiary Grantors. If, at any time or from time to time,
the Company Grantor or any Subsidiary of the Company Grantor creates, forms or
acquires, in any manner, directly or indirectly, a U.S. Restricted Subsidiary
(including, without limitation, as a result of designation of such pursuant to
Section 4.14 of the Indenture), the Company Grantor shall, simultaneous with
such creation, formation or acquisition, cause such U.S. Restricted Subsidiary
to become a party hereto by causing such U.S. Restricted Subsidiary to execute
and deliver to the Trustee a supplement to this Agreement in the form of Exhibit
B. Attached to such supplement shall be cumulatively updated Schedules in the
form of Schedules I through VI. If, at any time or from time to time, any
Subsidiary Grantor ceases to be a Restricted Subsidiary in a transaction
permitted under the Indenture (including, without limitation, by designation as
an Unrestricted Subsidiary pursuant to Section 4.14 of the Indenture), such
Subsidiary Grantor shall, simultaneously therewith, cease to be a party hereto,
and the Trustee shall promptly release the Security Interest created hereunder
and under the other Collateral Documents and take all other actions reasonably
requested by the Company Grantor, at the expense of the Company Grantor, to
evidence such release, including, without limitation, executing appropriate
Uniform Commercial Code termination statements in any jurisdiction and
delivering the same to the Company Grantor for filing and delivering to such
Subsidiary Grantor any Collateral in its possession which is an asset or
property of such Subsidiary Grantor.
<PAGE>
SECTION 4.09. Administration of Receivables; Lockboxes. The Grantors shall
service and administer the Accounts Receivables, collect payments due under the
Accounts Receivables and charge off any uncollectible Accounts Receivables, in
each case in the ordinary course of its business and in accordance with its past
practices. The Company Grantor shall update Schedule VI from time to time to
identify any Lockboxes in addition to those identified on Schedule VI on the
date hereof to which the Company Grantor has directed that payments in respect
of Accounts Receivable be made by Accounts Receivable debtors.
SECTION 4.10. Maintenance of Inventory. The Grantors shall do all things
necessary to maintain, preserve, protect and keep the Inventory in good repair
and working and saleable condition as shall be consistent with past practice.
ARTICLE 5
Pledged Securities
SECTION 5.01. Delivery of Pledged Securities. (a) All Pledged Securities,
including, without limitation, all certificates, instruments or other property
representing, evidencing or comprising Pledged Securities, shall be delivered to
and held by or on behalf of the Trustee, at such office as designated by the
Trustee in the City of New York on the date hereof, and shall be accompanied by
duly executed stock powers or other instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Trustee. The Trustee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities at such office as designated by
such sub-agent in the City of New York. The Pledged Securities shall be held (in
the discretion of the Trustee) in the name of the appropriate Grantor, endorsed
or assigned in blank in favor of the Trustee, or endorsed to or assigned in
favor of the Trustee or any nominee or nominees of the Trustee or a sub-agent
appointed by the Trustee. Each Grantor shall promptly give to the Trustee copies
of any notice or other communications received by it with respect to Pledged
Securities registered in the name of such Grantor. Any securities, including,
without limitation, all Additional Shares, Acquired Shares, Additional Notes and
certificates, instruments or other property evidencing, representing or
comprising Pledged Securities, not in existence or becoming Pledged Securities
subsequent to the date of this Agreement (collectively, "New Pledged
Securities") shall be promptly, upon so existing or becoming Pledged Securities,
delivered to and held by or on behalf of the Trustee, at the office referred to
above, and shall be accompanied by duly executed stock powers or other
instruments of transfer or assignment in blank and by such other instruments and
documents as the Trustee may reasonably request, all in form and substance
satisfactory to the Trustee. Any Grantor acquiring New Pledged Securities shall,
upon so acquiring such New Pledged Securities, promptly execute and deliver a
supplement to this Agreement in the form of Exhibit C and complete and fully
update Schedule III showing cumulatively all Pledged Securities.
<PAGE>
(b) If an issuer of Pledged Securities is incorporated in any country
or jurisdiction which does not permit the use of certificates to evidence
equity ownership, then the appropriate Grantor shall, to the extent
permitted by applicable law, record such pledge on the stock register of
the issuer of such Pledged Securities, execute any customary stock pledge
forms or other documents necessary to complete the pledge and give the
Trustee the right to transfer the Pledged Securities under the terms hereof
and provide to the Trustee an Opinion of Counsel, in form and substance
satisfactory to it, confirming such pledge.
(c) Any or all Pledged Securities held by or for the benefit of the
Trustee hereunder may, if an Event of Default has occurred and is
continuing, without prior notice, be registered in the name of the Trustee
or its nominee, and the Trustee or its nominee may at any time thereafter,
without notice, exercise all voting and corporate rights arising under or
in connection with any of the Pledged Securities and exercise any and all
rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of the Pledged Securities as if the
Trustee were the absolute owner thereof, including, without limitation, the
right to exchange, at its discretion, any of and all the Pledged Securities
upon the merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer of any of such Pledged Securities or upon the
exercise by any such issuer or the Trustee of any right, privilege or
option pertaining to any of the Pledged Securities and, in connection
therewith, to deposit and deliver any of and all the Pledged Securities
with any committee, depositary, transfer agent, registrar or other
designated agency on such terms and conditions as the Trustee may
determine, all without liability except to account for property actually
received by it, but the Trustee shall have no duty to the Grantors to
exercise any of the aforesaid rights, privileges or options and shall not
be responsible for any failure to do so or delay in so doing or for the
manner of so doing.
(d) The Trustee may (but is under no obligation to) do whatever in its
reasonable judgment may be necessary or advisable for the purpose of
preserving or extending the corporate existence of any corporation whose
shares of Capital Stock are included as Pledged Securities, except with
respect to (i) any Subsidiary of the Company Grantor which is merged into
the Company Grantor and (ii) any Wholly Owned Subsidiary which is merged
into any other Wholly Owned Subsidiary, in each case in compliance with the
provisions of the Indenture and the other Collateral Documents; provided,
that the Trustee shall be under no duty to take any action in respect
thereof nor shall it incur any liability for its failure to take any such
action. Upon a written request from the Company Grantor to the Trustee
stating that (i) in order to qualify a person to act as a director of or in
any other official relation to any Subsidiary shares of Capital Stock of
such Subsidiary are required to be transferred to or for the benefit of
such person, and (ii) such Subsidiary has no shares of Capital Stock, other
than shares constituting Pledged Securities, the Trustee shall transfer or
permit the transfer of shares of Capital Stock as may be necessary to
qualify the requisite number of persons to act as directors of or in any
other official relation to the issuer of such shares. In every such case
the Trustee may make such arrangements as it shall deem necessary for the
protection of the Security Interest created hereunder in respect of the
shares of Capital Stock so transferred. While such shares remain so
transferred they shall not be deemed to be Pledged Securities, but when
such shares are no longer needed for such qualification purposes they shall
immediately be redeposited and repledged and thereupon again become Pledged
Securities.
<PAGE>
SECTION 5.02. Voting Rights; Dividends; Etc. (a) As long as no Event of
Default shall have occurred and be continuing:
(i) the applicable Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Securities or
any part thereof for any purpose not inconsistent with the terms of this
Agreement and the other Collateral Documents; provided, however, that no
vote shall be cast or consent, waiver or ratification given or action taken
that would (a) directly or indirectly impair the value of the Collateral,
(b) be inconsistent with or violate any provision of this Agreement, the
Indenture or the other Collateral Documents, (c) approve any merger or
consolidation with or any sale of substantially all or all the property and
assets of the issuer of any of the Pledged Securities, except as otherwise
permitted under, or not prohibited by, the terms of this Agreement or the
Indenture, or (d) materially and adversely affect the rights inuring to a
holder of Pledged Securities or the rights and remedies of the Trustee or
the Noteholders under any Collateral Document or the ability of the Trustee
or the Noteholders to exercise the same;
(ii) the applicable Grantor shall be entitled to receive and retain,
and to utilize free and clear of the Security Interest created hereunder or
the Lien of any other Collateral Document, any and all cash dividends,
principal and interest paid with respect to any of the Pledged Securities,
to the extent and only to the extent such payments are permitted by, and
otherwise made in accordance with, the terms and conditions of the
Collateral Documents; provided, however, that any and all:
(1) dividends, principal and interest paid or payable other
than in cash with respect to, and instruments and other
property (other than cash) received, receivable or
otherwise distributed with respect to, or in exchange
for, or upon conversion of, any Pledged Securities;
(2) except in the case of such a dividend or other
distribution payable by a Wholly Owned Subsidiary,
dividends, principal and interest paid or payable in
cash with respect to any such Pledged Securities in
connection with a partial or total liquidation or
dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus; and
(3) all other distributions, paid or payable with respect
to any Pledged Securities, whether paid or payable in
cash or otherwise, whether resulting from a
subdivision, combination or reclassification of the
Capital Stock of the issuer of any Pledged Securities
or received in exchange for Pledged Securities or any
part thereof, or on redemption thereof, or as a result
of any merger, consolidation, acquisition or other
exchange of assets to which such issuer may be a party
or otherwise, other than any such merger,
consolidation, acquisition or exchange with the Company
Grantor or any Subsidiary Grantor which is a Wholly
Owned Subsidiary;
shall be forthwith delivered to the Trustee to hold as Collateral, subject
to the Security Interest created hereunder or the Lien of any other
Collateral Document and, if received by any Grantor, received in trust for
the benefit of the Trustee, segregated from the other property or funds of
such Grantor and forthwith delivered to the Trustee as Collateral in the
same form as so received (with any necessary endorsement);
<PAGE>
(iii) in order to permit the applicable Grantor to exercise the voting
and other rights which it is entitled to exercise pursuant to paragraph (i)
and to receive the dividends, principal and interest which it is authorized
to receive and retain pursuant to paragraph (ii), the Trustee shall, upon
written request of the Company Grantor, execute and deliver (or cause to be
executed and delivered) to such Grantor all such proxies, dividend payment
orders, powers of attorney and other instruments as such Grantor may
reasonably request for such purposes as shall be specified in such Company
Grantor request. Until actually paid, all rights to any such dividends,
principal and interest shall remain subject to the Security Interest
created hereunder and the Lien of the other Collateral Documents.
(b) Following the occurrence and during the continuance of an Event of
Default:
(i) unless the Trustee shall have otherwise notified the Company,
all rights of the applicable Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 5.02(a)(i) shall without further action cease, and
all such rights shall thereupon without further action become vested
in the Trustee who shall thereupon have the sole right to exercise
such rights during the continuance of such Event of Default;
(ii) all rights of the applicable Grantor to receive the
dividends, principal and interest which it would otherwise be entitled
to receive and retain pursuant to Section 5.02(a)(ii) shall without
further action cease, and all such rights shall thereupon without
further action become vested in the Trustee who shall thereupon have
the sole right to receive and hold as Collateral such dividends,
principal and interest during the continuance of such Event of
Default; and
<PAGE>
(iii) in order to permit the Trustee to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant
to Section 5.02(b)(i), and to receive all dividends, principal,
premium and interest which it may be entitled to receive under Section
5.02(b)(ii), the applicable Grantor shall execute and deliver to the
Trustee all such proxies, dividend payment orders, powers of attorney
and other instruments as the Trustee may request.
(c) All dividends, principal and interest which are received by any
Grantor contrary to or in violation of the provisions of Section
5.02(b)(ii) shall be received in trust for the benefit of the Trustee,
segregated from the other property or funds of such Grantor and forthwith
paid over to the Trustee as Collateral in the same form as received by such
Grantor (with any necessary endorsement).
(d) With the consent of the applicable Grantor, the Trustee may join
in any plan of voluntary or involuntary reorganization or readjustment or
rearrangement in respect of any issuer of Pledged Securities and may accept
or authorize the acceptance of new securities issued in exchange therefor
under any such plan. If an Event of Default shall have occurred and be
continuing, the Trustee shall be entitled to take such steps without the
consent of such Grantor. Any new securities so issued shall be deposited
and pledged with the Trustee under this Agreement. If the Trustee does not
join in such plan of reorganization or readjustment or rearrangement,
unless otherwise provided by applicable law, the Trustee shall receive any
monies accruing on or apportioned to such Pledged Securities and such
monies shall be held as Trust Monies and paid over or applied by the
Trustee as provided in the Indenture and the other Collateral Documents.
(e) Nothing in this Agreement shall prevent:
(i) the renewal or extension, without impairment of the Security
Interest intended to be created hereunder and the Lien of any other
Collateral Document, at the same or at a lower or higher rate of
interest, of any of the obligations or indebtedness of any corporation
included in the Pledged Securities; or
(ii) the issue in substitution for any such obligations or
indebtedness constituting Pledged Securities of other obligations or
indebtedness of such corporation for equivalent amounts and of
substantially equal or superior rank as to security, if any;
provided, however, in the case of clause (i) or (ii), that every such obligation
or indebtedness as so renewed or extended shall continue to be subject to the
Security Interest created hereunder and the Lien of any other Collateral
Document.
<PAGE>
ARTICLE 6
The Trustee
SECTION 6.01. Trustee's Appointment as Attorney-in-Fact. Each of the
Grantors hereby irrevocably constitutes and appoints the Trustee and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of each of the Grantors and in the name of the Grantors or in its own
name, from time to time in the Trustee's discretion upon the occurrence and
during the continuance of an Event of Default, for the purpose of carrying out
the terms of this Agreement and the other Collateral Documents, to take any and
all appropriate action and to execute any and all documents and instruments that
may be necessary or desirable to accomplish the purposes of this Agreement and
the other Collateral Documents and, without limiting the generality of the
foregoing, hereby gives the Trustee the power and right, on behalf of each of
the Grantors, without prior notice to or assent by the Grantors, upon the
Trustee's good faith determination that such action is reasonably necessary or
advisable to perfect, preserve and protect the Security Interest created
hereunder and the Lien of any other Collateral Document and, upon the occurrence
and during the continuance of an Event of Default, to do the following:
(i) to ask for, demand, collect, receive and give acquittances and
receipts for, settle and compromise any and all monies due and to become
due under or by virtue of any of the Collateral and, in the name of the
applicable Grantor or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of monies due under or by virtue of any of the
Collateral and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Trustee for the purpose of collecting any and all such monies due under or
by virtue of any of the Collateral whenever payable;
(ii) to pay or discharge taxes or Liens levied or placed on or
threatened against the Collateral other than as the same may be permitted
by the Collateral Documents, to effect any repairs or maintenance on the
Collateral or to effect any insurance required by the terms of this
Agreement or any other Collateral Document, and to pay all or any part of
the costs thereof, including, without limitation, premiums therefor;
provided, that each Grantor agrees to reimburse the Trustee on demand for
any payment made or any reasonable expense incurred by the Trustee pursuant
to the foregoing authorization; provided, further, that the foregoing shall
not be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Trustee or any Noteholder to cure or
perform, any covenants or other promises of such Grantor with respect to
taxes or Liens and maintenance and repairs as set forth herein or in any
other Collateral Document; and
<PAGE>
(iii) (1) to direct any Person liable for any payment under or by
virtue of any of the Collateral to make payment of any and all monies,
amounts and other obligations due and to become due thereunder directly to
the Trustee or as the Trustee shall direct; (2) to receive payment of and
receipt for any and all monies, amounts and other obligations due and to
become due at any time in respect of or arising out of any Collateral; (3)
to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices relating to the Collateral; (4) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of any Collateral; (5) to
defend any suit, action or proceeding brought against any Grantor with
respect to any Collateral if such Grantor fails to do so and such failure
is reasonably likely to have a materially adverse effect on the rights of
the Trustee or the Noteholders hereunder or under any Collateral Document
or on the value of the Collateral; (6) to settle, compromise or adjust any
suit, action or proceeding described in clauses (4) and (5) and, in
connection therewith, to give such discharges or releases as the Trustee
may reasonably deem appropriate; (7) to communicate with present or future
or prospective suppliers, customers or other persons associated with or
related to the business of each of the Grantors; and (8) to the extent
permitted by law, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Trustee were the absolute owner thereof for all
purposes, and to do, at the Trustee's option and the Grantors' expense, at
any time, or from time to time, all acts and things that the Trustee deems
necessary to protect, preserve, perfect or realize upon the Collateral and
the Security Interest, in order to effect the intent of this Agreement and
the other Collateral Documents, all as fully and effectively as each of the
Grantors might do.
Notwithstanding the provisions of this Section, nothing contained in this
Section shall be construed as requiring or obligating the Trustee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Trustee, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the monies due
or to become due in respect thereof or any property covered thereby. The Trustee
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to it herein, and neither the Trustee nor any of
its officers, directors, employees or agents shall be responsible to any Grantor
for any act or failure to act hereunder, except for its own wilful misconduct,
negligence or bad faith. It is understood and agreed that the appointment of the
Trustee as the agent and attorney-in-fact of each Grantor for the purposes set
forth above is coupled with an interest and is irrevocable. The provisions of
this Section shall in no event relieve the Grantor of any of its obligations
hereunder or under the other Collateral Documents with respect to the Collateral
or any part thereof or impose any obligation on the Trustee to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Trustee of any other or further right that it may
have on the date of this Agreement or hereafter, whether hereunder, under any
other Collateral Document, by law or otherwise.
Each of the Grantors hereby ratifies and confirms all that said attorney
shall lawfully do or cause to be done by virtue hereof.
SECTION 6.02. Release and Substitution of Collateral. No Collateral shall
be released from the Security Interest created hereunder and no assets or
property of any kind or nature whatsoever, real, personal or mixed (including
Fixtures), whether tangible or intangible, shall be substituted for any of the
Collateral, except that the Trustee shall so release or accept substitutions of
Collateral in accordance with the provisions of the Indenture, which provisions
are hereby incorporated herein by reference as if fully set forth herein.
<PAGE>
SECTION 6.03. Cash Collateral Account. The Trustee will establish a cash
collateral account (the "Cash Collateral Account") to hold all Trust Monies
received by it from time to time pursuant to the terms of the Indenture and the
other Collateral Documents. The Trust Monies on deposit in the Cash Collateral
Account shall be invested, withdrawn, used and otherwise managed as provided in
this Agreement and the Indenture.
SECTION 6.04. Indemnification of Trustee. Each of the Grantors hereby
jointly and severally agrees to indemnify the Trustee for, and hold it harmless
against, any and all reasonable claims, demands, expenses (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
counsel), losses, obligations, damages, penalties, actions, judgments, suits,
costs, liabilities or disbursements of any kind and nature whatsoever which may
be imposed on, incurred by or asserted against the Trustee in its capacity as
such in any way relating to or arising out of or in connection with the
acceptance and administration of this Agreement, the Indenture, the other
Collateral Documents, the Obligations, the Notes or any other documents
contemplated by or referred to herein or therein or any of its rights and duties
hereunder or under any other Collateral Document or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other document or otherwise arising or relating in any
manner to the pledges and Security Interests contemplated hereunder and under
the Indenture and the other Collateral Documents, except to the extent such
claims, demands, expenses, losses, obligations, damages, penalties, actions,
judgments, suits, costs, liabilities or disbursements have resulted from the (i)
willful misconduct, gross negligence or bad faith of the Trustee or (ii) any
legal proceedings commenced against the Trustee or any Noteholder by any
security holder or creditor thereof arising out of and based upon rights
afforded such security holder or creditor solely in its capacity as such. Each
of the Grantors hereby jointly and severally agrees to pay, and to save the
Trustee harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all excise, sales or other taxes that may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
ARTICLE 7
Remedies
SECTION 7.01. Remedies; Rights Upon Default. (a) Upon the occurrence and
during the continuance of an Event of Default:
(i) all payments received by the Grantors under or in connection
with any of the Collateral shall be held by such Grantor in trust for
the Trustee for the benefit of the Noteholders, shall be segregated
from other property and funds of the Grantors and shall forthwith upon
receipt by any of the Grantors be paid over to the Trustee as
Collateral, in the same form as received by such Grantor (with any
necessary endorsements);
<PAGE>
(ii) any and all such payments so received by the Trustee
(whether from the Grantors or otherwise) shall be held by the Trustee
and applied by it in the manner provided in the Indenture;
(iii) each Grantor shall deliver each item of Collateral to the
Trustee on demand; and the Trustee shall have the right to seize and
take possession (and temporary possession of any non-Collateral in
connection with any such repossession with the right to store
temporarily, at the Grantors' expense and risk, such non-Collateral),
with or without legal process and with or without prior notice or
demand for performance, of any Collateral and the evidence and records
pertaining to the Collateral (including, without limitation, customer
lists, correspondence with present or future or prospective suppliers
or customers, advertising materials, credit files, computer tapes,
programs, printouts and all other computer materials, records and
electronic data processing software) and may enter, without liability
for trespass, the premises where they, or any of them, are located for
the purpose of effecting such possession or removal; the Trustee shall
not be liable to such Grantor for any damage suffered by such Grantor
by reason of such entry or seizure unless it results from the
Trustee's wilful misconduct, gross negligence or bad faith; and each
of the Grantors hereby agrees jointly and severally to indemnify and
hold harmless the Trustee from and against any and all claim, expense
or liability that it may incur to any Person by reason of such entry
or seizure except to the extent resulting from the Trustee's wilful
misconduct, gross negligence or bad faith; and
(iv) the Trustee may hire and maintain on any of the Grantors'
premises a custodian or independent contractor selected by the Trustee
who shall have full authority to do all lawful acts necessary to
protect the Trustee's interest and to report to the Trustee thereon.
Each of the Grantors hereby agrees to cooperate with any such Person and to
do whatever the Trustee may reasonably request to preserve the Collateral.
(b) Upon the occurrence and during the continuance of any Event
of Default, the Trustee may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other Collateral
Document, all rights and remedies of a secured party after default
under the Uniform Commercial Code or any other applicable law in the
applicable jurisdiction. Without limiting the generality of the
foregoing, each of the Grantors expressly agrees that in any such
event the Trustee may, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale) to or on such Grantor or
any other Person, all and each of which demands, advertisements and
notices are (to the fullest extent permitted by applicable law) hereby
expressly waived, forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof and may forthwith sell,
lease, assign, give option or options to purchase, or sell or
otherwise dispose of and deliver, the Collateral (or contract to do
so), or any part thereof, in one or more parcels at public or private
sale or sales, at any exchange or broker's board or at any of the
Trustee's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon
such other terms as the Trustee may deem commercially reasonable,
irrespective of the effect of any such sales on the market price of
the Collateral. The Trustee or any Noteholder shall have the right on
any such public sale or sales and, to the extent permitted by law, on
any such private sale or sales to purchase the whole or any part of
such Collateral so sold. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part
of any of the Grantors. Each of the Grantors further agrees to
assemble, at the Trustee's reasonable request in connection with any
such sale, the Collateral and make it available to the Trustee at
places that the Trustee reasonably selects, whether at such Grantor's
premises or elsewhere. The Trustee shall apply the proceeds of any
such collection, recovery, receipt, appropriation, realization or sale
in the manner provided in the Indenture. Upon any sale of the
Collateral by the Trustee (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
Trustee or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and
such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Trustee
or such officer or be answerable in any way for the misapplication
thereof.
<PAGE>
Each of the Grantors agrees that the Trustee need not give more than 10
days' notice of the time and place of any public sale or of the time after which
a private sale may take place and that such notice is reasonable notification,
as provided in Section 9.504(3) of the Uniform Commercial Code as in effect in
the State of New York or its equivalent in other jurisdictions. No notification
need be given to such Grantor if it has signed, after default, a statement
renouncing or modifying any right to notification of sale or other intended
disposition. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Trustee may fix and state in the notice (if any) of such sale. At any
such sale, the Collateral, or portion thereof, to be sold may be sold in one lot
as an entirety or in separate parcels, as the Trustee may (in its sole and
absolute discretion) determine. The Trustee shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Trustee
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. In case any sale of all
or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Trustee until the sale price is paid
by the purchaser or purchasers thereof, but the Trustee shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. Subject to Section 2.01(b), each of the Grantors
shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral applied to the Obligations pursuant to the
Indenture are insufficient to pay in full all Obligations and each of the
Grantors also shall be liable for the reasonable fees and expenses of any
attorneys employed by the Trustee to collect any such deficiency. For purposes
hereof, (a) a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof, (b) the Trustee shall be free to
carry out such sale pursuant to such agreement and (c) no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Trustee shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Trustee may proceed by a suit or suits at law or in equity to
foreclose upon the Collateral and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
<PAGE>
SECTION 7.02. Private Sales. (a) Each of the Grantors recognizes that the
Trustee may be unable to effect a public sale of any part of or all the
Collateral by reason of certain prohibitions contained in the Securities Act and
the rules and regulations thereunder and applicable state securities or "blue
sky" laws. The Trustee is hereby authorized at any one or more private sales (if
it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree, among other things, to
acquire such Collateral for their own account for investment and not with a view
to the distribution or resale thereof. Each of the Grantors acknowledges and
agrees that any such private sale may result in proceeds and other terms less
favorable to the seller than if such sale were a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration under the Securities Act) and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Trustee shall be under no
obligation to engage in public sales or delay a sale of any of the Collateral
for the period of time necessary to permit any issuer thereof to register such
Collateral for public sale under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.
(b) Each of the Grantors recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any foreign
government or regulatory authority, agency or body, the Trustee may be
compelled, with respect to any sale of all or any part of the Collateral,
to limit purchasers to those who meet the requirements of such foreign
government or regulatory authority, agency or body. Each of the Grantors
acknowledges that any such sales may be at prices and on terms less
favorable to the Trustee than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agrees
that any such restricted sale shall be deemed to have been made in a
commercially reasonable manner and that the Trustee shall have no
obligation to engage in public sales.
(c) Each of the Grantors further agrees to do or cause to be done all
such other acts and things as may be reasonably necessary to make such sale
or sales of any portion of or all the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators,
regulators or governmental bodies, authorities or agencies having
jurisdiction over any such sale or sales, all at such Grantor's expense.
Such Grantor shall and shall cause each issuer of any Pledged Securities to
be sold hereunder from time to time to furnish to the Trustee all such
information as the Trustee may reasonably request in order to determine the
number of shares, notes and other instruments included in the Collateral
which may be sold by the Trustee as exempt transactions under the
Securities Act and the rules and regulations thereunder, as the same are
from time to time in effect.
<PAGE>
SECTION 7.03. Authorization to Issuers. Each Grantor hereby authorizes and
instructs, and shall cause, each issuer of any Pledged Securities to comply with
any written instruction received by such issuer from the Trustee that states
that an Event of Default has occurred and is continuing and that is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and such Grantor agrees that such issuers shall
be fully protected in so complying.
SECTION 7.04. Grant of License to Use Intellectual Property. For the
purpose of enabling the Trustee to exercise rights and remedies under this
Article at such time as the Trustee shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Trustee (solely in its
capacity as Trustee) an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sub-license (in each case to the fullest extent of the Grantors' rights to do
so) any of the Collateral consisting of Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located,
including, without limitation, in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Trustee shall be exercised, at the option of the Trustee, only upon the
occurrence and during the continuation of an Event of Default; provided,
however, that any license, sub-license or other transaction entered into by the
Trustee in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.
ARTICLE 8
Lockboxes; Proceeds; Collection of Accounts Receivable
SECTION 8.01. Lockboxes. The Company shall at all times maintain one or
more Lockboxes with such banks ("Lockbox Banks") as the Company shall select.
The Company Grantor shall direct all obligors on all Accounts Receivable to make
payments in respect thereof to a Lockbox, or directly to the Concentration
Account. The Company Grantor shall immediately deposit in a Lockbox or the
Concentration Account all cash payments made for Inventory or in respect of
Accounts Receivable in the identical form in which such payment was made,
whether by cash or check. The Company Grantor, and any of its Affiliates,
employees, agents or other Persons acting for or in concert with the Company
Grantor, shall, acting for the benefit of and as agent for the Trustee, receive,
for the benefit of the Noteholders (subject to the Grantor's rights of
withdrawal and direction pursuant to Section 8.02 of this Agreement, and to the
right of the Company Grantor to excess proceeds pursuant to Section 8.3 and
Section 6.10 of the Indenture), any monies, checks, notes, drafts or any other
payments relating to or proceeds of Accounts Receivable or other Collateral
which come into the possession or under the control of the Company Grantor or
any of its Affiliates, employees, agents or other Persons acting for or in
concert with the Company Grantor, and immediately upon receipt thereof, the
Company Grantor or such Persons shall deposit the same or cause the same to be
deposited, in kind, in a Lockbox or the Concentration Account.
<PAGE>
SECTION 8.02. Collection of Accounts Receivable Prior to Default Prior to
the date on which an Event of Default has occurred and the Trustee has notified
the Company Grantor that an Event of Default has occurred, the Grantors may, and
the Trustee hereby authorizes the Grantors to, subject to Section 10.5 of the
Indenture, assign, collect, liquidate, sell, factor or otherwise dispose of
Accounts Receivable, to retain the proceeds thereof and of any Sales of
Inventory and to apply such proceeds to any use not prohibited under this
Agreement or the Indenture. The Grantors shall be entitled to withdraw, or
direct the disbursement, of any proceeds of Accounts Receivable or Inventory
from any Lockbox and the Concentration Account at any time prior to the date
referenced in the immediately preceding sentence.
SECTION 8.03. Directed Funds. From and after the date upon which an Event
of Default has occurred and is continuing, the Trustee may direct the Lockbox
Banks or the bank in which the Concentration Account is located to forward to
the Trustee all or any portion of the amounts from time to time deposited in the
Lockboxes or the Concentration Account, as the case may be. The Trustee shall
promptly apply such funds as set forth in Section 6.10 of the Indenture.
SECTION 8.04. Collection of Accounts Receivable During Default. The Trustee
may at any time when an Event of Default has occurred and is continuing in its
sole discretion upon written notice to the Company Grantor, elect to require
that the Accounts Receivable be paid directly to the Trustee. In such event, the
Company Grantor shall, and shall permit the Trustee to, promptly notify the
account debtors or obligors under the Accounts Receivable of the Trustee's
interest therein and direct such account debtors or obligors to make payment of
all amounts then or thereafter due under the Accounts Receivable directly to the
Trustee. Upon receipt of any such notice from the Trustee, the Company Grantor
shall thereafter hold in trust for the Trustee all amounts and proceeds received
by it with respect to the Accounts Receivable and other Collateral and
immediately and at all times thereafter deliver to the Trustee all such amounts
and proceeds in the same form as so received, whether by cash, check, draft or
otherwise, with any necessary endorsements. The Agent shall hold and apply funds
so received as provided by the terms of Article 11 of the Indenture.
SECTION 8.05. Special Collateral Account. From and after the date upon
which an Event of Default has occurred and is continuing, the Trustee may
require all cash proceeds received by the Trustee under this Article to be
deposited, until applied as provided in this Article, in the Cash Collateral
Account as security for the Obligations. During the continuance of an Event of
Default, the Company Grantor shall have no control whatsoever over such cash
collateral account or the investment thereof. The Trustee shall apply the
collected balances as set forth in Article 11 of the Indenture. The Trustee
shall release to the Company Grantor any amounts deposited in such cash
collateral account on the first Business Day on which no Event of Default is
continuing.
<PAGE>
ARTICLE 9
Miscellaneous
SECTION 9.01. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or on the Grantors or the Trustee
(a) shall be in writing and (b) shall be given or made, if to (1) any Grantor,
11550 North Meridian Street, Carmel, Indiana 40632, Attention: Gary Bilsland,
and (2) the Trustee, at 101 Barclay Street, Floor 21W, New York, New York 10286,
Attention: Corporate Trust Trustee Administration; or at such other address as
any of such party may hereafter specify to each of the other parties in writing,
and (unless otherwise specified herein) shall be deemed delivered upon receipt,
if delivered by hand, or five Business Days after mailing, and all mailed
notices shall be by first-class mail, postage prepaid.
SECTION 9.02. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Collateral Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.03. No Waiver; Remedies Not Exclusive. (a) The Trustee shall not
by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver shall be valid unless in writing
signed by the Trustee, and then only to the extent therein set forth. A waiver
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy that the Trustee would otherwise have on any future
occasion. No failure to exercise nor any delay in exercising, on the part of the
Trustee, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies of the
Trustee hereunder and under the other Collateral Documents are cumulative and
are not exclusive of any rights or remedies that it would otherwise have. The
rights and remedies hereunder provided may be exercised singly or concurrently,
from time to time as often as may be deemed expedient by the Trustee. No right
or remedy conferred upon or reserved to the Trustee by this Agreement is
intended to be exclusive of any other right or remedy, and each and every such
right and remedy shall be cumulative and shall be in addition to every other
right and remedy given under this Agreement or now or hereafter existing at law
or in equity.
<PAGE>
(b) In the event the Trustee shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the
Trustee, then and in every such case the Grantors and the Trustee shall, to
the extent permitted by applicable law, be restored to their respective
former positions and rights hereunder with respect to the Collateral, and
all rights, remedies and powers of the Trustee shall continue as if no such
preceding had been instituted.
SECTION 9.04. Amendments, Etc. This Agreement may not be amended,
supplemented or modified except in accordance with the terms of the Indenture;
provided, that this Agreement may be amended, supplemented and modified in
connection with the addition or deletion of Subsidiary Grantors as parties
hereto as provided in Section 4.08 and in connection with the pledging of
additional Collateral by any Grantor as provided in Section 5.01(a); provided,
further, that no amendment, supplement or modification described in the previous
proviso of this sentence shall adversely affect the interests of the
Noteholders.
SECTION 9.05. Termination. Upon payment in full of all the Obligations or
upon compliance by the Company Grantor with the provisions of Sections 8.1 of
the Indenture, this Agreement shall terminate and the Trustee shall reassign and
redeliver to each of the Grantors all their respective Collateral hereunder
which has not been sold, disposed of, retained or applied by the Trustee in
accordance with the terms hereof or of any other Collateral Document. Such
reassignment and redelivery shall be without warranty by or recourse to the
Trustee and shall be at the expense of the Grantors. At such time, this
Agreement shall no longer constitute a Lien upon any of the Collateral and the
Trustee shall execute and deliver to the Grantors, at the Grantors' expense, all
Uniform Commercial Code termination statements and similar documents that the
Grantors shall reasonably request to evidence such termination or release. Any
execution and delivery of termination statements or documents pursuant to this
Section shall be without recourse to or warranty by the Trustee. This Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Obligations is rescinded or must otherwise be
returned, upon the insolvency, bankruptcy or reorganization of any Grantor, or
otherwise, all as though such payment had not been made and, if applicable, this
Agreement had never been terminated.
SECTION 9.06. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
GIVING EFFECT TO APPPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY;
PROVIDED, HOWEVER, THAT ANY REMEDIES HEREIN PROVIDED WHICH SHALL BE VALID UNDER
THE LAWS OF THE JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT HEREOF SHALL
BE TAKEN SHALL NOT BE AFFECTED BY ANY INVALIDITY UNDER THE LAW OF THE STATE OF
NEW YORK.
<PAGE>
SECTION 9.07. Consent to Jurisdiction and Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in the City of New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Collateral Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Trustee may otherwise have to bring any action or proceeding
relating to this Agreement or the other Collateral Documents against any Grantor
or its properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other
Collateral Documents in any New York State or Federal court of the United
States of America sitting in the City of New York, or any appellate court
from any thereof. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such court.
SECTION 9.08. Conflicts with TIA; Indenture. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Agreement by any of the provisions of the TIA, such
required provision shall control. If any provision hereof conflicts with any
provision of the Indenture, the provision set forth in the Indenture shall
control.
SECTION 9.09. Survival of Obligations. All obligations set forth in
Sections 2.02, 6.04 and 9.13 shall survive the execution, delivery and
termination of this Agreement and all other Collateral Documents and the payment
in full of all Obligations or the compliance by the Company with the provisions
of Section 8.1 of the Indenture.
SECTION 9.10. Successors and Assigns. Subject to Section 9.14, whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of each Grantor that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 9.11. Counterparts. This Agreement may be executed in any number of
separate counterparts, and all of the said counterparts taken together shall be
deemed to constitute one and the same instrument.
SECTION 9.12. Descriptive Headings. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
<PAGE>
SECTION 9.13. Expenses. The Grantors agree to pay to the Trustee, from time
to time, upon demand, all reasonable fees, costs and expenses of the Trustee
(including, without limitation, the reasonable expenses, fees and disbursements
of its counsel) incurred by the Trustee or arising in connection with (a) the
preparation, execution, delivery, administration, modification, amendment or
termination of this Agreement or the enforcement of any of the provisions
hereof, (b) the custody or preservation and protection of, or the sale of,
collection from, or other realization upon, any of the Collateral, (c) the
preservation, protection, defense, exercise or enforcement of any of the rights
of the Trustee hereunder and in and to the Collateral or (d) the failure by any
of the Grantors to perform or observe any of the provisions hereof.
SECTION 9.14. Continuing Security Interest: Transfer of Notes. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until all Obligations are indefeasibly
paid in full or the Company Grantor complies with the provisions of Section 8.1
of the Indenture, (b) be binding upon each of the Grantors and each of their
successors and assigns and (c) inure, together with the rights and remedies of
the Trustee hereunder, to the benefit of the Trustee, and each Noteholder, and
each of their respective successors, transferees and assigns; no other Person
(including, without limitation, any other creditor of any of the Grantors) shall
have any interest herein or any right or benefit with respect hereto. Without
limiting the generality of clause (c), the Trustee may assign or otherwise
transfer any Indebtedness held by it secured by this Agreement to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Person herein or otherwise. Neither
this Agreement nor any interest herein or in the Collateral, or any part
thereof, except as otherwise permitted by any of the Collateral Documents, may
be assigned by any of the Grantors; provided, however, that this Agreement may
be assigned by the Company Grantor to any Person that shall become the obligor
under the Indenture in compliance with the Indenture if such person executes and
delivers an amendment hereto whereby it expressly assumes all obligations of the
Company Grantor hereunder as if it were an original party hereto. This Agreement
shall be deemed to be automatically assigned by the Trustee to any Person who
succeeds to the Trustee in accordance with the Indenture and such assignee shall
have all rights and powers of, and act as, the Trustee hereunder.
SECTION 9.15. Security Interest Absolute. All rights of the Trustee, the
Security Interest created hereunder and all obligations of each of the Grantors
hereunder shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Obligations, the
Notes, the Indenture or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Obligations, the Notes,
the Indenture or any other agreement or instrument relating thereto;
(c) any exchange, release or nonperfection of any other collateral, or
any release or amendment or waiver of or consent to or departure from any
guarantee, for all or any of the Obligations; or
<PAGE>
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any of the Grantors (other than the
indefeasible payment in full of the Obligations).
SECTION 9.16. Further Assurances. Each Grantor agrees to do such further
acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Trustee may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Trustee its rights and remedies hereunder.
SECTION 9.17. Rules of Construction. The rules of construction specified in
Section 1.04 of the Indenture shall be applicable to this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and become effective by their respective duly authorized officers.
Attest: Anacomp, Inc., as Company Grantor
By:------------------------ By:----------------------------------------
Name:
Title:
Attest: Florida AAC Corporation, as a Subsidiary
Grantor
By: ------------------- By:-----------------------------------------
Name:
Title:
<PAGE>
The Bank of New York, as Trustee
By:-----------------------------------------
Name:
Title:
<PAGE>
Exhibit A to the
Secruity and Pledge Agreement
PERFECTION CERTIFICATE
Reference is made to the Security and Pledge Agreement dated as of
____________, 1996(as the same may be amended, supplemented or modified from
time to time, the "Security and Pledge Agreement"), among Anacomp, Inc. (the
"Company Grantor"), the U.S. Restricted Subsidiaries referred to therein, such
other U.S. Restricted Subsidiaries as may from time to time become parties
thereto pursuant to Section 4.08 thereof (each a "Subsidiary Grantor" and,
together with the Company Grantor, the "Grantors") and The Bank of New York, as
Trustee.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Security and Pledge Agreement.
The undersigned, an Officer and the chief legal officer of the Company
Grantor, hereby certify to the Trustee as follows:
1. Names. (a) The exact corporate name of each Grantor under the Collateral
Documents, as such name appears in its respective certificate of incorporation,
is set forth on Schedule 1.
(b) Set forth on Schedule 1 is each other corporate name each Grantor
has had since its organization, together with the date of the relevant
change.
(c) Except as set forth on Schedule 1, no Grantor has changed its
identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature
or jurisdiction of corporate organization. If any such change has occurred,
included in Schedule 1 is the information required by items 1 and 2 of this
Perfection Certificate as to each acquiree or constituent party to such
merger, consolidation or acquisition.
(d) Set forth on Schedule 1 is a list of all other names (including
trade names or similar appellations) used by each Grantor or any of its
divisions or other business units in connection with the conduct of its
business or the ownership of its properties at any time during the past
five years.
(e) Set forth on Schedule 1 is the Federal Taxpayer Identification
Number of each Grantor.
<PAGE>
2. Current Locations. (a) The chief executive office of each Grantor is
located at the address set forth opposite its name below:
Grantor Mailing Address County State
(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any evidence or records relating to any Collateral (with
each location at which chattel paper, if any, is kept being indicated by an
"*"):
Grantor Mailing Address County State
(c) Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a) or (b):
Grantor Mailing Address County State
(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Collateral not identified above:
Grantor Mailing Address County State
(e) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than the Grantors that have possession of any of
the Collateral:
Grantor Name of Person Mailing Address County State
<PAGE>
3. File Search Reports. Attached as Schedule 3A are true copies of file
search reports dated no more than 30 days prior to the date of this Perfection
Certificate from the Uniform Commercial Code filing offices where filings are to
be made as required by the Security and Pledge Agreement. Attached hereto as
Schedule 3B is a true copy of each financing statement or other filing
identified in such file search reports.
IN WITNESS WHEREOF, we have hereunto set our hands this day of , 1996.
Anacomp, Inc.
By:---------------------------------
Name:
Title:
<PAGE>
Schedule 1 to
Perfection Certificate
Item l(a):
Item l(b):
Item l(d):
Item l(e):
Name Federal Taxpayer Identification
- - ---- -------------------------------
<PAGE>
Schedule 3A to
Perfection Certificate
UCC File Search Reports
-----------------------
<PAGE>
Schedule 3B to
Perfection Certificate
Financing Statements
--------------------
Identified in UCC File Search Reports
-------------------------------------
<PAGE>
Exhibit B to the
Security and Pledge Agreement
SUPPLEMENT NO. ----- dated as of ------------, ----, to the Security
and Pledge Agreement dated as of ------------, ---, 1996 (as the same may be
amended, supplemented or modified from time to time, the "Security and Pledge
Agreement"), among Anacomp, Inc. (the "Company Grantor"), the U.S. Restricted
Subsidiaries referred to therein, such other U.S. Restricted Subsidiaries as may
from time to time become parties thereto pursuant to Section 4.08 thereof and
The Bank of New York, as Trustee.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security and Pledge
Agreement.
B. Pursuant to Section 4.08 of the Security and Pledge Agreement, each
U.S. Restricted Subsidiary that was not in existence or not such a U.S.
Restricted Subsidiary on the date of the Security and Pledge Agreement is
required to become a party to the Security and Pledge Agreement as a Subsidiary
Grantor upon becoming a U.S. Restricted Subsidiary. Section 4.08 of the Security
and Pledge Agreement provides that any such additional U.S. Restricted
Subsidiaries shall become Subsidiary Grantors under the Security and Pledge
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned U.S. Restricted Subsidiary (the "New U.S. Restricted
Subsidiary") is executing this Supplement in accordance with the requirements of
the Security and Pledge Agreement to become a Grantor under the Security and
Pledge Agreement.
Accordingly, the Trustee and the New U.S. Restricted Subsidiary agree
as follows:
SECTION 1. In accordance with Section 4.08 of the Security and Pledge
Agreement, the New U.S. Restricted Subsidiary by its signature below becomes a
Subsidiary Grantor under the Security and Pledge Agreement with the same force
and effect as if originally named therein as a Subsidiary Grantor, and the New
U.S. Restricted Subsidiary hereby (a) agrees to all the terms and provisions of
the Security and Pledge Agreement applicable to it as a Grantor thereunder, (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof and (c)
attaches cumulatively updated Schedules in the form of Schedules I through VI to
the Security and Pledge Agreement. Each reference to a "Grantor" in the Security
and Pledge Agreement shall be deemed to include the New U.S. Restricted
Subsidiary. The Security and Pledge Agreement is hereby incorporated herein by
reference.
<PAGE>
SECTION 2. The New U.S. Restricted Subsidiary represents and warrants
to the Trustee that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally or equitable principles relating to or limiting creditors' rights
generally.
SECTION 3. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Supplement shall
become effective when the Trustee shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New U.S.
Restricted Subsidiary and the Trustee.
SECTION 4. Except as expressly supplemented hereby, the Security and
Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY; PROVIDED, HOWEVER,
THAT ANY REMEDIES HEREIN PROVIDED WHICH SHALL BE VALID UNDER THE LAWS OF THE
JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT HEREOF SHALL BE TAKEN SHALL
NOT BE AFFECTED BY ANY INVALIDITY UNDER THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in
writing and given as provided in Section 8.01 of the Security and Pledge
Agreement. All communications and notices hereunder to the New U.S. Restricted
Subsidiary shall be given to it at the address set forth under its signature
below.
<PAGE>
IN WITNESS WHEREOF, the New U.S. Restricted Subsidiary and the Trustee
have duly executed this Supplement to the Security and Pledge Agreement as of
the day and year first above written.
[NAME OF NEW U.S. RESTRICTED
SUBSIDIARY],
by-----------------------------------
Name:
Title:
Address:
THE BANK OF NEW YORK, as
Trustee,
by-----------------------------------
Name:
Title:
<PAGE>
Exhibit C to the
Security and Pledge Agreement
SUPPLEMENT NO. ------ dated as of ----------, -----, ----, to the
Security and Pledge Agreement dated as of -----------, ---- 1995 (as the same
may be amended, supplemented or modified from time to time, the "Security and
Pledge Agreement"), among Anacomp, Inc. (the "Company Grantor"), the U.S.
Restricted Subsidiaries referred to therein, such other U.S. Restricted
Subsidiaries as may from time to time become parties thereto pursuant to Section
4.08 thereof and The Bank of New York, as Trustee.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security and Pledge
Agreement.
B. Pursuant to Section 5.01(a) of the Security and Pledge Agreement,
each Grantor thereunder is required to deliver thereunder any securities not in
existence or becoming Pledged Securities subsequent to the date the Security and
Pledge Agreement was initially executed promptly upon such securities so
existing or becoming Pledged Securities. Section 5.01(a) of the Security and
Pledge Agreement provides that each Grantor (as applicable, the "Acquiring
Grantor") that acquires any such Pledged Securities shall execute and deliver an
instrument in the form of this Supplement and complete and fully update Schedule
III to the Security and Pledge Agreement showing cumulatively all Pledged
Securities.
Accordingly, the Trustee and the Acquiring Grantor agree as follows:
SECTION 1. In accordance with Section 5.01(a) of the Security and
Pledge Agreement, the Acquiring Grantor by its signature below pledges the
securities listed in Schedule I to this Supplement to the Trustee with the same
force and effect as if originally pledged to the Trustee under the Security and
Pledge Agreement, and the Acquiring Grantor hereby (a) agrees that all the terms
and provisions of the Security and Pledge Agreement applicable to Pledged
Securities shall be fully applicable to such securities, (b) represents and
warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof and (c) attaches a
fully updated Schedule III to the Security and Pledge Agreement showing
cumulatively all Pledged Securities. The Security and Pledge Agreement is hereby
incorporated herein by reference.
SECTION 2. The Acquiring Grantor represents and warrants to the
Trustee that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
equitable principles relating to or limiting creditors' rights generally.
<PAGE>
SECTION 3. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Supplement shall
become effective when the Trustee shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the Acquiring
Grantor and the Trustee.
SECTION 4. Except as expressly supplemented hereby, the Security and
Pledge Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY; PROVIDED, HOWEVER,
THAT ANY REMEDIES HEREIN PROVIDED WHICH SHALL BE VALID UNDER THE LAWS OF THE
JURISDICTION WHERE PROCEEDINGS FOR THE ENFORCEMENT HEREOF SHALL BE TAKEN SHALL
NOT BE AFFECTED BY ANY INVALIDITY UNDER THE LAW OF THE STATE OF NEW YORK.
SECTION 6. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
IN WITNESS WHEREOF, the Acquiring Grantor and the Trustee have duly
executed this Supplement to the Security and Pledge Agreement as of the day and
year first above written.
[NAME OF ACQUIRING GRANTOR],
by-------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Trustee,
by-----------------------------------
Name:
Title:
<PAGE>
Schedule I to Supplement No.
to Security and Pledge Agreement
NEW PLEDGED SECURITIES
Pledged Shares
- - --------------
Percentage
Class Stock Number Ownership Percentage
of Certificate Par of (Direct or Pledge to
Owner Issuer Stock No(s) Value Shares Indirect) Trustee
- - ----- ------ ----- ----------- ----- ------ ---------- ----------
Pledged Notes
- - -------------
Original Final
Holder Obligor Amount of Note Date of Note Maturity Date
- - ------ ------- -------------- ------------ --------------
<PAGE>
Schedule I to
Security and Pledge Agreement
GRANTOR NAMES
COMPANY GRANTOR:
Anacomp, Inc.
SUBSIDIARY GRANTOR:
Florida A A C Corporation
<PAGE>
Schedule II to
Security and Pledge Agreement
ANACOMP, INC. ISSUED PATENTS AND PENDING APPLICATIONS
Patent No. Title Issued
- - ---------- ---------------------- ------
4,079,296 Variable Speed AC Motor Control - 03/14/78
Expires 03/14/95
4,084,212 Corona Charging Unit for Microfiche 04/11/78
Reader/Printer - Expires 04/11/95
4,105,312 Carriage Mechanism for Microfiche 08/08/78
Beam Cathode Ray Tube - Expires 08/15/95
4,107,582 Character Selector for a Shaped 08/15/78
Beam Cathode Ray Tube - Expires 08/15/95
4,111,537 Optical Structure for Microfiche 09/05/78
Reader - Expires 09/05/95
4,122,234 Article Employing A Heat Hardenable 10/24/78
Liquid Film Forming Composition
with Articles Dispersed Therein and
Method for Making Same - Expires 10/24/95
4,123,699 Vertically Scanning Microfilm Reader and 10/31/78
Reader Printer - Expires 10/31/95
4,130,352 Portable Microfiche Reader With Foldup 12/19/78
Lens and Mirror Assembly - Expires 12/19/96
4,141,640 Method and Apparatus for Developing 02/27/79
Microfilm - Expires 02/27/96
4,148,582 Programmable Microfiche Duplicator 04/10/79
and Sorter Apparatus - Expires 02/27/96
4,152,156 Duplication-Proof Photographic Film - 05/01/79
Expires 05/01/96
4,156,978 Microfiche Carrier - Expires 06/05/96 06/05/79
4,157,870 Exposure Station - Expires 06/12/96 06/12/79
<PAGE>
4,165,160 Lamp Assembly and Power Module for 08/21/79
Fanless Microfiche Reader - Expires 08/21/96
4,167,310 Lamp Assembly and Power Module for 09/11/79
Fanless Microfiche Reader - Expires 09/11/96
4,169,675 Microfiche Duplicator - Expires 10/02/96 10/02/79
4,217,039 Microfiche Viewer with Rotatable Base - 08/12/80
Expires 08/12/97
4,242,819 Microfiche Carrier Assembly - 01/06/81
Expires 01/06/98
4,247,184 Magnetic Indexing System for Microfilm 01/27/81
Reader - Expires 01/27/98
4,257,180 Microfiche Viewer - Expires 03/24/98 03/24/81
4,268,135 Image Focusing Apparatus - Expires 05/19/98 05/19/81
4,283,136 Microfiche Reader-Printer Having Multi-Format 08/11/81
Capabilities - Expires 08/11/98
4,287,564 Method of Correcting for Misalignment 09/01/81
of Microfiche Frames - Expires 09/01/98
4,289,396 Microfiche Reader Printer with 09/15/81
Interchangeable Carriages - Expires 09/15/98
4,290,734 Rigid Disc Handling Device and Method - 09/22/81
Expires 09/22/98
4,306,007 Process of Making and Using Fade-Resistant 12/15/81
Diazo Microfilm - Expires 12/15/98
4,320,943 Carriage Support Arrangement for a 03/23/82
Microfiche Reader - Expires 03/23/99
4,334,742 Microfiche Reader Assembly and Method - 06/15/82
Expires 06/15/99
4,334,743 Optical Arrangement for Use in Microfiche 06/15/82
Reader and Method -Expires 06/15/99
<PAGE>
4,337,994 Linear Beam Scanning Apparatus Especially 07/06/82
Suitable for Recording Data on Light
Sensitive Film - Expires 07/06/99
4,339,181 Lens Arrangement for Microfiche Reader 07/13/82
Assembly and Method - Expires 07/13/99
4,351,592 Collapsible Microfiche Reader Assembly 07/13/82
Especially Suitable for Use in a Desk
Drawer - Expires 07/13/99
4,354,603 Rigid Magnetic Disc Stacker - Expires 10/19/99 10/19/82
4,367,518 Lens System for Microfiche Duplicator - 01/04/83
Expires 01/04/00
4,370,689 Flexible Magnetic Recording Medium With 01/25/83
Improved Reinforcement Means - Expires 01/25/00
4,385,587 Apparatus for Processing a Flexible 05/31/83
Magnetic Recording - Expires 05/31/00
4,508,808 Method of Using Diazotype Photographic 04/02/85
Materials (11 1/2yr. Maint. Fee due 10/02/96)
4,555,437 Transparent Ink Jet Recording Media 11/26/85
(Tanck Patent) (11 1/2yr. Maint. Fee
due 02/26/97)
4,630,427 Prescored Jacket Assembly Apparatus and 12/23/86
Method (11 1/2yr. Maint. Fee due 06/23/98)
4,652,961 Micro-Floppy Diskette with Inner 03/24/87
Containment System (11 1/2yr. Maint. Fee
due 11/24/98)
4,710,691 Process & Apparatus for Characterizing & 12/01/87
Controlling a Synchronous Motor in
Microstepper Mode (Maintenance Fee
Due 06/01/95)
4,783,685 Reader Printer (Maintenance Fee Due 05/08/96) 11/08/88
4,975,714 Focusing Mechanism for Linescan Imaging 12/04/90
(Maintenance Fee Due 06/04/98)
<PAGE>
5,095,320 Focusing Mechanism for Linescan 03/10/92
Imaging (Maintenance Fee Due 09/10/95)
5,113,219 Pneumatic Pressure Pad for Cyclical Even 05/12/92
Application of Pressure Forces,
Particularly for Contact Duplication of
Microfiche (Maintenance Fee Due 11/12/95)
5,140,374 Reader Printer (Maintenance Fee 08/18/92
Due 02/18/96)
5,148,208 Disposable Container for Dispensing of 09/15/92
Photographic Developing Liquids
(Maintenance Fee Due 03/15/97)
5,153,625 Film Canister to Facilitate Diameter 10/06/92
Sensing (Maintenance Fee Due 04/06/96)
5,274,323 Reloadable Canister with Replaceable 09/21/93
Film Spool (Foreign Filed)
(Maintenance Fee Due 03/21/97)
5,304,462 Composition for and Method of Cleaning 04/19/94
Continuous, Nonreplenished Film Developers
and Replenished Film Developers (Maintenance
Fee Due 10/19/97)
5,389,992 Reloadable Canister with Replaceable Film 02/14/95
Spool(Continuation)(Maintenance Fee
Due 08/14/98)
<PAGE>
PATENTS REGISTERED IN THE NAME OF GRAHAM MAGNETICS, INC.,
ACQUIRED BY ANACOMP IN MAY 1994
AND SUBSEQUENTLY MERGED INTO ANACOMP
(AS OF MAY 15, 1996)
Title S.N. Issued Pat. No.
- - ------------------------------------------------------------------------------
U.S. 126,396 01/26/82 4,312,896
U.S. CIP 892,984 12/02/80 4,237,506
Cleaning of Self-loaded Tape 948,704 07/22/80 4,213,223
Cartridges (Strap)
U.S. Div. 125,622 02/22/81 4,290,821
Novel Calendar Apparatus 908,644 01/06/81 4,242,954
U.S. Div. 186,517 01/26/82 4,312,898
Improved High Temp Mag. Tape 887,545 02/19/80 4,189,514
Streamline Divisional Appln. 084,339 05/12/81 4,267,206
Of 070
Error Testing of Recording 970,666 03/10/81 4,255,807
Media such as Magnetic Tape
Error Locator 486,191 12/23/86 4,631,479
Baffled System 513,770 01/22/85 4,494,878
Bimodal Multi-Track Magnetic 171,842 12/18/90 4,979,051
Head
Recording System Having Head 171,755 12/04/90 4,975,791
Transducers with Controlled
Skew
<PAGE>
GRAHAM MAGNETICS, INC. PATENTS (continued)
Title S.N. Filed/Issued Pat. No.
- - -------------------------------------------------------------------------------
Process for Making Coatings Awaiting
with Improved Winding information
Characteristics
Means to Stabilize Operation Awaiting
Characteristics of information
Belt-Driven Cartridge over
Wide Temperature Range
Means to Reduce Fluctuations Awaiting
in Tape Speed and Tension in information
Belt-Driven Cartridge
Means to Reduce Tension Awaiting
Changes in Belt-Driven information
Cartridge
Roll Cleaning Utilizing Laser Patent search
Abatement completed
<PAGE>
ANACOMP, INC. PENDING PATENT APPLICATIONS
Title Patent or Serial No.
- - --------------------------------------------- -------------------------------
Reloadable Canister with Replaceable Film Spool 5,247,323
Foreign Filed: 2052717
Canada
Japan 51701191
EPO Designating Austria; France, Germany, Italy, U.K., 91982329
Netherlands, Switzerland
Reloadable Canister with Replaceable Film Spool 5,389,992
Reloadable Canister with Replaceable Film Spool (Filed 02/10/95 08/387,020
Continuation Application)
Digitized Image Reader (Filed 04/02/93) Continuation-in-part 5,477,343
Application
Foreign Filed: 4132393
Australia
Canada 2098693
EPO Designating: Austria; Belgium; Denmark; France; Germany; 931097232
Greece; Italy; Netherlands; Portugal; Spain; Sweden;
Switzerland/Liechtenstein; United Kingdom
Japan 14661693
Reloadable Film Magazine 08/540,657
Daylight Loadable Film Reel With Overly Wide Leader Not Yet Assigned
<PAGE>
The following U.S. Patents also have the indicated foreign counterparts:
Country Title Foreign Patent No.
- - ---------------- ------------------------------------- ----------------------
Canada MICROFICHE READER/PRINTER 1037104
U.S. No.: 3,899,248
Canada MICROFICHE READER/PRINTER 1050098
U.S. No.: 3,898,004
Canada SELECTOR INTERLOCK FOR 1063947
MICROFICHE CARTRIDGE
U.S. No.: 4,054,378
Canada OPTICAL STRUCTURE FOR MICROFICHE READER 1095298
U.S. No. 4,111,537
Canada VERTICALLY SCANNING MICROFILM 1072380
AND READER/PRINTER - No. U.S. Patent
Canada PORTABLE MICROFICHE READER 1097960
WITH FOLDUP LENS AND MIRROR
ASSEMBLY - U.S. No.: 4,130,352
Canada MICROFICHE DUPLICATOR WITH 1099136
COLLIMATED
BAFFLED LIGHT 1102162
LENS SYSTEM FOR MICROPHONE 1127893
DUPLICATOR
U.S. No.: 4,141,640
Canada MICROFICHE CARRIER ASSEMBLY - 1103493
U.S. No.: 4,242,819
Canada FADE RESISTANT DIAZO MICROFILM Pending
Canada IMAGING FOCUSING APPARATUS 1128343
U.S. No.: 4,268,135
Canada MICROFICHE READER PRINTER WITH 1140376
INTERCHANGEABLE
CARRIAGES
U.S. No.: 4,289,396
<PAGE>
FLORIDA A A C CORP.
-------------------
None
<PAGE>
PATENT LICENSES
---------------
Tape Cartridge License Agreement (the "DEC License Agreement") dated
effective as of February 1, 1989, between Digital Equipment Corporation ("DEC")
and Anacomp pursuant to which Anacomp is licensed to use DEC patents and
know-how to manufacture TK50/52 data tape cartridges. (DEC has since assigned
the DEC License Agreement to Quantum Corporation.) LICENSE IN.
Three (3) Agreements with International Business Machines Corporation
("IBM") pursuant to which Anacomp (as the surviving entity in mergers with the
companies that originally contracted with IBM) is licensed to use IBM patents to
manufacture 3480 and 3490E data tape cartridges. LICENSES IN.
(bullet) Agreement dated as of April 1, 1978, between IBM and Dysan
Corporation.
(bullet) Agreement dated as of July 1, 1986, between IBM and Xidex
Corporation.
(bullet) Agreement dated as of June 30, 1992, between IBM and Graham
Magnetics, Inc.
All of the above-referenced Agreements with IBM require Anacomp to
cross-license IBM on certain Anacomp patents. Anacomp has granted one such
license to Lexmark International, Inc., a former IBM subsidiary.
<PAGE>
Schedule III to
Security and Pledge Agreement
<TABLE>
PLEDGED SECURITIES
Pledged Shares
- - --------------
<CAPTION>
Pledged
Number Number Shares as
of Shares/ of Shares/ Percentages Other
Quotes Quotes of Total Evidence
Jurisdiction of Class Par Owned by to be Shares of
Pledgor Issuer Incorporation of Stock Value Pledgor pledged Outstanding Ownership
- - ------- ------ ------------- -------- ----- ------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Anacomp, Inc. Florida A A C Florida Common $1 1,000 1,000 100%
Corporation
Anacomp, Inc. Anacomp Canada, Canada Common Cdn. $1 1,000 1,000 100%
Inc.
Anacomp, Inc. Anacomp S.A. France N/A FF100 350,227 350,227 100% Share Registry
Anacomp, Inc. Anacomp Belgium Belgium N/A N/A 6,000 5,999 99.98% Share Registry
S.A.
Anacomp, Inc. Anacomp B.V. The Netherlands N/A DFL1000 35 35 100% Share Registry
Anacomp, Inc. Anacomp Holdings United Kingdom Ordinary (pound)1 650 650 100%
Limited
Anacomp, Inc. Xidex GmbH Germany Common N/A 5,526,400 5,526,400 100% Notarial Deed
Anacomp, Inc. Anacomp GesmbH Austria N/A N/A 500,000 500,000 100% Commercial Registry
Anacomp, Inc. Anacomp Australia Ordinary A$1 749,000 749,000(1) 100%
(Australia) Pty.
Limited
Anacomp, Inc. Anacomp (Japan) Japan Common JPY 2,000 2,000 100%
Ltd. 150,000
Anacomp, Inc. Anacomp Italia Italy N/A ITL 500,000,000 500,000,000 100% Quota Registry
Srl.
Anacomp, Inc. Xidex Magnetics Switzerland N/A SF1,000 997 997 100%
S.A.
Anacomp, Inc. Xidex Switzerland N/A SF1,000 1,997 1,997 100%
Corporation S.A.
Anacomp, Inc. Xidex New New Zealand Ordinary HZ$1.00 10,000 10,000 100%
Zealand Ltd.
<FN>
(1) Xidex New Zealand holds one share of Anacomp (Australia) Pty. Limited on
trust for Anacomp, Inc. to comply with Australia law.
</FN>
</TABLE>
Pledged Debt
- - ------------
1. Promissory Note executed by Michael J. Morse, dated
December 26, 1991, in the amount of $112,448.98.
2. Promissory Note executed by James B. Peters, dated
October 23, 1991, in the amount of $50,683.71.
3. Promissory Note executed by Adam Santavicca, dated
June 21, 1991, in the amount of $30,000.00.
4. Promissory Notes and Security Agreements executed by Com-Lease,
dated June 24, 1993, October 19, 1994, and October 19, 1994, respectively, in
the aggregate principal amount of $1,899,562.00.
<PAGE>
Schedule IV to
Security and Pledge Agreement
LOCATIONS OF REAL PROPERTY
[Layout by fee owned and leased
categories alphabetically with state,
county and city or township and address]
A. ANACOMP, INC.: FEE INTERESTS
STREET ADDRESS
STATUS OF PROPERTY COUNTY
Occupied Graham Texas Young
1715 Fourth Street
Graham, TX 76450
B. ANACOMP, INC.: LEASEHOLD INTERESTS
STREET ADDRESS
STATUS OF PROPERTY COUNTY
Leased 1515 Huffman Road Jefferson
Suite 203
Birmingham, AL 35215
Leased 1121 West Grant Road Pima
Suite 407
Tucson, AZ 85705
Leased 11075 Knott Avenue Orange
Suites A, B & C
Cypress, CA 90630
Leased 22351 City Center Drive Alameda
Suites 1 & 2
Hayward, CA 94541-000
Leased 12365 Crosthwaite Circle San Diego
Poway, CA 92064
<PAGE>
Sublet 9795 Business Park Drive Sacramento
Suite A
Sacramento, CA 94827
Leased 1150 Folsom Street San Francisco
San Francisco, CA 94103-3997
Leased 1235 Midas Way Santa Clara
Sunnyvale, CA 94086
AAC (sublet by AAC) 1282 Reamwood Santa Clara
Sunnyvale, CA 94088
Leased 1242 Kifer Road Santa Clara
Sunnyvale, CA 94086
Leased 21111 Oxnard Street Los Angeles
Woodland Hills, CA 91367
Leased 7808 Cherry Creek So Drive Denver
Suite 205
Denver, CO 80231
Leased 100 Prestige Park Road Hartford
East Hartford, CT 06108-1988
Leased 300 Long Beach Blvd. Fairfield
Stratford, CT 06497
Leased 2709 Art Museum Drive, #4 Duval
Jacksonville, FL 32207
Leased 14505 Commerce Way Dade
Suite 800
Miami Lakes, FL 33016
Leased 7121 Grand National Drive Orange
Suites 106, 107, 108
Orlando, FL 32819-8384
Leased 4920 West Cypress Street Hillsborough
Suite 108
Tampa, FL 33607-3802
<PAGE>
Leased 2115 Monroe Drive NE Fulton
Atlanta, GA 30324-4832
Leased 715 Algonquin Road Cook
Suite 101
Arlington Heights, IL 60005-4418
Leased 717 West Algonquin Road Cook
Arlington Heights, IL 60005
Leased Weber Atrium Ctr. #102-103 Cook
717 West Algonquin Road
Arlington Heights, IL 60005
Leased 640 N. LaSalle Street Cook
Chicago, IL 60610
Leased 701 Congressional Blvd. Hamilton
Suite 190
Carmel, IN 46032
Leased 11550 North Meridian St. Hamilton
5th & 6th Floor
Carmel, IN 46032
Sublet 6281 Hillsdale Court Marion
Building #3
Indianapolis, IN 46250
Leased 6821 Hillsdale Court Marion
Building 3 - Suite B
Indianapolis, IN 46250
Leased 1304 Adams St. Wyandotte
Kansas City, Kansas 66103
Leased 1318 Adams Street Wyandotte
Kansas City, KS 66103
Leased 1051-H Newton Pike Fayette
Lexington, KY 40511
<PAGE>
Leased The Fincastle Building Jefferson
303 West Broadway
Louisville, KY 40202-2105
Leased 12120-A Plum Orchard Dr. Montgomery
Silver Spring, MD 20904
Leased 5 Mount Royal Avenue Middlesex
Marlborough, MA 01752
Leased 200 Boston Avenue Middlesex
Medford, MA 02155
Leased So Hadley Industrial Park Hampshire
17 Industrial Drive
South Hadley, MA 01075
Leased 23399 Commerce Drive Oakland
Suite B-8
Farmington Hills, MI 48335
Leased 2520 Pilot Knob Road Hennepin
Suite 300
Minneapolis, MN 55120
Leased 602 2nd Avenue Hennepin
Suite B-93D, B-95, B90
Minneapolis, MN 55402
Leased 1815 Belt Way Drive Ind. City
St. Louis, MO 63114-5815
Leased Marino Plaza II Passaic
125 Kingsland Avenue
Clifton, NJ 07014
Leased 105 Newfield Avenue Middlesex
Raritan Center
Edison, NJ 08837
Leased 300 Cooper Center Camden
7905 Browning Rd., #300
Pennsauken, NJ 08109-4204
<PAGE>
Leased 2415 Princeton Drive NE Bernalillo
Suite B & I
Albuquerque, NM 87107-1701
Leased 4335 Industrial Road Clark
#440
Las Vegas, NV 89103
Leased 495 Commerce Drive Erie
Suite 6A
Amherst (Buffalo), NY 14228-2378
Leased 900 Old Country Road Nassau
Garden City, NY 11530-2109
Leased 157 Chambers Street New York
New York, NY 10007-1015
Leased 222 Broadway New York
24th Floor
New York, NY 10038
Leased 3495 Winton Place Bldg. E Ste. 5 Monroe
Rochester, NY 14609
Leased 7815 National Service Rd., 606 Guilford
Greensboro, NC 27409
Leased 6118 St. Giles Street Wake
Suite D
Raleigh, NC 27612-2604
Leased 1100 Resource Drive Cuyahoga
Brooklyn Heights, OH 44131-0000
Leased 1155 Western Avenue Hamilton
Cincinnati, OH 45203-1174
Leased 1150 Dublin Road Franklin
Suite A
Columbus, OH 43215
<PAGE>
Leased 868 So. Patterson Blvd. Montgomery
Suite 210
Dayton, OH 45402-2680
Leased 12060 S.W. Garden Place Washington
Tigard, OR 97223-0000
Leased 2020 Ardmore Blvd. Allegheny
Suite 325
Pittsburgh, PA 15221-4637
Leased 2214 Paddock Way Drive Dallas
Suite 200
Grand Prairie, TX 75050-0000
Leased 6767 Portwest Drive Harris
Suite 190
Houston, TX 77024
Leased 1288 West 2240 South Salt Lake
Suite A
Salt Lake City, UT 84119
Leased 2414 S.W. Andover St. King
Suite 100
Seattle, WA 98106
<PAGE>
Schedule V to
Security and Pledge Agreement
GRAHAM MAGNETICS, INC. TRADEMARK REGISTRATIONS
Mark County No.
- - ---------------------------- -------------------------- --------------------
AH SO DISKA USA 1,264,110
Black/White des USA 1,342,091
COBALOY Japan 2,182,731
COBALOY USA 1,090,159
COBALOY USA 1,165,332
DETECTOR USA 1,229,015
EPOCH Japan 2,338,676
EPOCH Japan 499,217
EPOCH Mexico 325,269
EPOCH 480 Benelux 377,174
EPOCH 480 Canada 270,056
EPOCH 480 France 1,688,489
EPOCH 480 Germany (E) DD 652 416
EPOCH 480 Japan 1,759,074
EPOCH 480 Switzerland 314,124
EPOCH 480 United Kingdom 1,157,948
EPOCH 480 USA 1,146,073
EPOCH MTC USA 1,421,767
GMI Benelux 378,001
GMI Canada 271,063
GMI France 1,688,485
GMI France 1,688,488
GMI Japan 2,663,809
GMI Mexico 398,086
GMI Norway 112,415
GMI Switzerland 314,234
GMI United Kingdom B1,157,950
<PAGE>
GMI USA 1,253,478
GMI USA 1,354,687
GRAHAM MAGNETICS Benelux 377,175
GRAHAM MAGNETICS Canada 268,751
GRAHAM MAGNETICS France 1,688,487
GRAHAM MAGNETICS Germany (E) DD 652 418
GRAHAM MAGNETICS Germany (W) 1,034,449
GRAHAM MAGNETICS Japan 1,709,644
GRAHAM MAGNETICS Mexico 319,912
GRAHAM MAGNETICS Norway 142,778
GRAHAM MAGNETICS Switzerland 314,125
GRAHAM MAGNETICS United Kingdom B1,160,167
GRAHAM MAGNETICS USA 1,441,854
GRAHAM MAGNETICS E. 480 Germany (W) 1,059,014
GRAHAM MAGNETICS INS. Germany (W) 1,059,015
GRAHAM MAGNETICS INS. Switzerland 323,441
GRAHAM MAGNETICS PRO. Switzerland 325,014
GRAHAM MAGNETICS SUMMITT Switzerland 323,471
<PAGE>
INSPECTOR Benelux 375,691
INSPECTOR Canada 282,442
INSPECTOR France 1,688,486
INSPECTOR Norway 112,132
INSPECTOR United Kingdom 1,157,949
INSPECTOR USA 1,142,321
PERMA-DISC USA 1,077,314
PROTECTOR Benelux 382,809
PROTECTOR Canada 293,107
PROTECTOR France 1,203,030
PROTECTOR Germany (W) 1,050,582
PROTECTOR United Kingdom B1,174,061
SUMMITT Australia A382,461
SUMMITT Benelux 385,331
SUMMITT Canada 298,710
SUMMITT France 1,215,526
SUMMITT Germany (E) DD 652 417
SUMMITT Germany (W) 1,080,929
SUMMITT Mexico 319,913
SUMMITT United Kingdom 1,183,430
ULTIMAG USA 1,306,847
Anacomp, Inc. Trademark Applications
Service Number Filing Date Mark
- - ---------------------------- ---------------- --------------------------------
751046357 01/22/96 ALVA & Design (Inventive
Approaches To Informations
Delivery)
<PAGE>
Florida A A C Corp.
-------------------
None
Trademark Licenses
------------------
Trademark License Agreement dated September 25, 1995, between Anacomp,
Inc. and Hanny International, Inc. ("Hanny") pursuant to which Anacomp licensed
to Hanny and certain of its affiliates the right to use Anacomp's "Precision,"
"Xidex," "Dysan" and "XM2" trademarks on a perpetual basis. LICENSE OUT.
AFP/COM Base Agreement dated June 9, 1994, as amended, between
Anacomp, Inc. and International Business Machines Inc. ("IBM") pursuant to which
Anacomp is granted a limited license to IBM's AFCCU software and COM Unique
Software, LICENSE IN.
XCF Program-Contract AI0001 dated as of October 7, 1992, between
Anacomp, Inc. and Xerox Corporation ("Xerox") pursuant to which Anacomp is
granted limited trademark and software licenses to certain Xerox software and
trademarks. LICENSE IN.
The DEC License Agreement described above under "Patent Licenses"
pursuant to which Anacomp is licensed by DEC to use the "TK 50" and TK 52"
trademarks. LICENSE IN.
Pending Trademark Licenses
--------------------------
Anacomp, Inc. currently has pending with IBM a trademark license
agreement pursuant to which Anacomp is granted a limited, royalty-free license
to use certain IBM trademarks in connection with marketing certain Anacomp
products. LICENSE IN.
<PAGE>
Schedule VI to
Security and Pledge Agreement
LOCKBOX ACCOUNTS
Lockbox Account# Lockbox Location
---------------- ----------------
0-71-72354 Bank of America
231 South LaSalle Street
Chicago, Illinois 60697
First National Bank of Chicago
57-58157 One First National Plaza
Chicago, Illinois 60670
08540246569 PNC Bank
P.O. Box 7780
Philadelphia, PA 19182
<PAGE>
Schedule VII to
Security and Pledge Agreement
LOCATIONS OF CHIEF EXECUTIVE OFFICE,
PRINCIPAL PLACE OF BUSINESS AND
EVIDENCE AND RECORDS CONCERNING THE COLLATERAL
CHIEF EXECUTIVE OFFICE,
PRINCIPAL PLACE OF BUSINESS
AND OTHER LOCATIONS WHERE
EVIDENCE AND RECORDS
CONCERNING THE COLLATERAL
GRANTOR ARE KEPT
- - ------- ----------------------------
Anacomp, Inc. 11550 North Meridian Street
P.O. Box 40888
Indianapolis, IN 46240
Florida A A C Corporation 11550 North Meridian Street
P.O. Box 40888
Indianapolis, IN 46240
<PAGE>
Schedule VIII to
Security and Pledge Agreement
Copyrights
----------
Anacomp does not own any federally-registered copyrights, nor is it a
licensee under any federally registered copyrights, except to the extent that
IBM and/or Xerox have licensed to Anacomp such companies' copyrights in the
software products that are licensed to Anacomp or described above under
"Trademark Licenses."
Anacomp does, on a routine basis, affix a copyright notice on all of
its operating and diagnostic software products; operating, user and maintenance
manuals; form agreements and contracts; advertising, sales and promotional
literature and materials; and other creative works.
Florida A A C Corp.
-------------------
None
Copyright Licenses
------------------
See "Copyrights" above.
<PAGE>
Schedule IX to
Security and Pledge Agreement
Pending Intellectual Property Litigation
----------------------------------------
1. Patent Litigation.
A) Anacomp, Inc. v. Bayer Corp d/b/a Agfa Division of Miles
i) Anacomp claims patent infringement with respect
to the original microfilm canister utilized in
Anacomp's XFP 2000 COM recorder. U.S. District
Court, Atlanta, GA.
B) Anacomp v. COM Products, Inc. and Fuji Photo Film U.S.A., Inc.
i) Anacomp claims patent infringement with respect to the
original microfilm canister utilized in Anacomp's
XFP 2000 COM recorder. U.S. District Court, Atlanta, GA.
2. Trademark Litigation.
None
3. Copyright Litigation.
None
Additional Pending Litigation
-----------------------------
See Schedule 1 of Anacomp, Inc.'s Disclosure Statement pursuant to
Section 1125 of the Bankruptcy Code for the Second Amended Joint Plan of
Reorganization of Anacomp, Inc. and Certain of its Subsidiaries.
RECORDING REQUESTED BY AND :
WHEN RECORDED MAIL TO: :
:
Weil, Gotshal & Manges LLP :
767 Fifth Avenue :
New York, New York 10153-0119 :
Attention: Managing Partner - :
Real Estate (NC) :
- - --------------------------------------------------------------------------------
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE CA.A.
FIRST LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
from
ANACOMP, INC.,
Grantor
to
Chicago Title Insurance Company,
Trustee
FOR THE BENEFIT OF
THE BANK OF NEW YORK AS TRUSTEE,
Beneficiary
THE INDEBTEDNESS AND OBLIGATIONS SECURED BY
THIS INSTRUMENT MATURE NOT LATER THAN ____________, 1999.
THIS INSTRUMENT SECURES PRESENT AND FUTURE
INDEBTEDNESS, OBLIGATIONS, ADVANCES AND READVANCES
UP TO A MAXIMUM PRINCIPAL AMOUNT OF $____________.
Dated as of ____________, 1996
<PAGE>
FIRST LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
TABLE OF CONTENTS
-----------------
Article Page
- - ------- ----
1. Warranty of Title............................................ 6
2. Payment of Indebtedness...................................... 6
3. Requirements; Proper Care and Use............................ 7
4. Taxes on Trustee or Beneficiary.............................. 8
5. Payment of Impositions.......................................10
6. Deposits.....................................................11
7. Insurance....................................................12
8. Condemnation/Eminent Domain..................................18
9. Sale and Lease of the Property...............................19
10. Discharge of Liens..........................................20
11. Right of Contest............................................20
12. Subleases...................................................20
13. Estoppel Certificates.......................................23
14. Loan Document Expenses......................................23
15. Beneficiary's Right to Perform..............................24
16. Grantor's Existence.........................................24
17. Trustee's and Beneficiary's Costs and Expenses..............24
18. Defaults....................................................25
19. Remedies....................................................27
20. Security Agreement under Uniform Commercial Code............32
21. Additional Representations and Warranties...................33
22. No Waivers, Etc.............................................34
23. Trust Funds.................................................35
24. Additional Rights...........................................35
25. Waivers by Grantor..........................................35
26. Failure to Consent..........................................36
27. No Joint Venture or Partnership.............................37
28. Notices.....................................................37
29. Inconsistency with the Indenture............................38
30. Substitution or Resignation of Trustee......................39
31. Conveyance by Trustee/Defeasance............................39
32. No Modification; Binding Obligations........................39
34. Miscellaneous...............................................43
<PAGE>
Article Page
- - ------- ----
35. Enforceability..............................................44
36. Receipt of Copy.............................................45
37. Additional Provisions.......................................45
Exhibits
- - --------
Exhibit A - Description of the Land
Exhibit B - Description of the Subleases
Exhibit C - Permitted Encumbrances
Exhibit D - Description of the Lease
<PAGE>
FIRST LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FIRST LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (this "Deed of Trust") dated as of ____________, 1996, by
ANACOMP, INC., an Indiana corporation, having an office at 11550 North Meridian
Street, Carmel, Indiana 46032, as trustor ("Grantor"), to Chicago Title Company,
a Missouri corporation, having an address at 925 B Street, San Diego, California
92101, as trustee ("Trustee"), for the benefit of THE BANK OF NEW YORK as
Trustee for the Holders (as defined in the Indenture, hereinafter defined), a
New York banking corporation organized under the laws of New York State, as
beneficiary ("Beneficiary").
THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTION 9313 OF THE
UNIFORM COMMERCIAL CODE OF THE STATE OF CALIFORNIA. TO THE EXTENT THE GOODS ARE
FIXTURES UNDER THE LAWS OF THE STATE OF CALIFORNIA, THE FIXTURES ARE OR ARE TO
BECOME FIXTURES ON THE REAL PROPERTY LOCATED IN THE COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, MORE PARTICULARLY DESCRIBED ON EXHIBIT A ATTACHED HERETO,
COMMONLY KNOWN BY THE STREET ADDRESS: 12365 CROSTHWAITE CIRCLE, POWAY,
CALIFORNIA. THE NAME OF THE RECORD OWNER OF THE REAL PROPERTY IS ANACOMP, INC.
W I T N E S S E T H :
WHEREAS, Grantor has executed and delivered to Beneficiary that certain
Indenture, dated as of ____________, 1996 (as the same may be further amended,
modified, supplemented or extended, the "Indenture") (capitalized terms not
otherwise defined in this Deed of Trust shall have the meanings ascribed to them
in the Indenture);
WHEREAS, pursuant to the Indenture, Grantor has delivered to the Holders
its 11-5/8% Senior Secured Notes due 1999 (the "Notes");
WHEREAS, Grantor and Beneficiary intend these recitals to be a material
part of this Deed of Trust;
WHEREAS, as a condition to the issuance of the Notes, the Holders have
required that Grantor enter into this Deed of Trust and grant to Beneficiary the
liens and security interests referred to herein to secure:
<PAGE>
(a) the payment of (i) the principal amount of the Notes in the maximum
aggregate amount of up to ____________________________ ($____________________)
pursuant to the terms and provisions of the Indenture, (ii) all interest accrued
on the Notes pursuant to the terms and provisions of the Indenture, (iii) any
and all other sums due or to become due under the Indenture, this Deed of Trust,
the Notes or any of the other Loan Documents (hereinafter defined), (iv) any
further or subsequent advances made under the Indenture, this Deed of Trust or
any of the other Loan Documents, and (v) any extensions, renewals, replacements
or modifications of the Indenture, the Notes or any of the other Loan Documents
(the items set forth in clauses (i) through (v) hereof being hereinafter
collectively referred to as the "Indebtedness"), and
(b) the performance of all of the terms, covenants, conditions, agreements,
obligations and liabilities of Grantor (collectively the "Obligations") under
(i) this Deed of Trust, (ii) the Indenture, (iii) the Notes, (iv) the Collateral
Documents (as defined in the Indenture), (v) any deeds of trust or mortgages in
addition to this Deed of Trust now or hereafter made by Grantor to secure the
Indebtedness (such additional deeds of trust and mortgages being hereinafter
collectively referred to as the "Additional Mortgages"), (vi) any supplemental
agreements, undertakings, instruments, documents or other writings executed by
Grantor as a condition to advances under the Indenture or otherwise in
connection with the Indenture, including, but without limiting the generality of
the foregoing, (vii) all chattel mortgages, pledges, powers of attorney,
consents, assignments, notices, leases and financing statements heretofore, now
or hereafter executed by or on behalf of Grantor or any other Person
(hereinafter defined) and/or delivered to Beneficiary in connection with the
Indenture or the transactions contemplated thereby, and (viii) any extensions,
renewals, replacements or modifications of any of the foregoing (this Deed of
Trust, the Indenture, the Additional Mortgages and any other supplemental
agreements, undertakings, instruments, documents or other writings executed in
connection with any of the foregoing, together with (x) the foregoing powers of
attorney, consents, assignments, notices, leases and financing statements, (y)
any guarantees of the Indebtedness and the Obligations and (z) any deeds of
trust, mortgages, security agreements or assignments now or hereafter made to
secure the Indebtedness and the Obligations (all of the foregoing documents
enumerated above in items (i) through (viii) being hereinafter collectively
referred to as the "Loan Documents"),
<PAGE>
and in consideration of Ten Dollars ($10.00), in hand paid all good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Grantor does hereby irrevocably mortgage, give, grant, bargain,
sell, warrant, alienate, remise, release, convey, assign, transfer, hypothecate,
deposit, pledge, set over and confirm unto Trustee, and to its successors and
assigns TO HAVE AND TO HOLD IN TRUST, WITH POWER OF SALE and the right of entry
and possession for the benefit of Beneficiary the following described real and
other property and all substitutions for and all replacements, reversions and
remainders of such property, whether now owned or held or hereafter acquired by
Grantor (collectively the "Property"):
Grantor's leasehold estate in all those plots, pieces or parcels of land
more particularly described in Exhibit A annexed hereto and made a part hereof
together with the right, title and interest of Grantor, if any, in and to the
streets and in and to the land lying in the bed of any streets, roads or
avenues, open or proposed, public or private, in front of, adjoining or abutting
said land to the center line thereof, the air space and development rights
pertaining to said land and the right to use such air space and development
rights, all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging to, or in any way appertaining to, said land, all
easements now or hereafter benefitting said land and all royalties and rights
appertaining to the use and enjoyment of said land, including, but without
limiting the generality of the foregoing, all alley, vault, drainage, mineral,
water, oil, coal, gas, timber and other similar rights (collectively the
"Land");
TOGETHER with all of the right, title, interest and privileges of Grantor
in, to, under and otherwise by virtue of the Agreement of Lease (the "Lease")
more particularly described in Exhibit D annexed hereto and made a part hereof,
and the leasehold estate created thereby (the "Leasehold Estate");
TOGETHER with Grantor's interest in the buildings and other improvements
now or hereafter erected on the Land (the buildings and other improvements being
hereinafter collectively referred to as the "Buildings," and the Land together
with the Buildings and the Fixtures (hereinafter defined), being hereinafter
collectively referred to as the "Real Estate");
TOGETHER with all and singular the reversion or reversions, remainder or
remainders, rents, issues, profits and revenues of the Real Estate and all of
the estate, right, title, interest, dower and right of dower, curtesy and right
of curtesy, property, possession, claim and demand whatsoever, both in law and
at equity, of Grantor of, in and to the Real Estate and of, in and to every part
and parcel thereof, with the appurtenances, at any time belonging or in any way
appertaining thereto;
<PAGE>
TOGETHER with all of the fixtures, systems, machinery, apparatus, equipment
and fittings of every kind and nature whatsoever and all appurtenances and
additions thereto and substitutions or replacements thereof now owned or
hereafter acquired by Grantor and now or hereafter attached or affixed to, or
constituting a part of, the Real Estate or any portion thereof (collectively the
"Fixtures"), including, but without limiting the generality of the foregoing,
all heating, electrical, mechanical, lighting, lifting, plumbing, ventilating,
air conditioning and air-cooling fixtures, systems, machinery, apparatus and
equipment, refrigerating, incinerating and power fixtures, systems, machinery,
apparatus and equipment, loading and unloading fixtures, systems, machinery,
apparatus and equipment, escalators, elevators, boilers, communication systems,
switchboards, sprinkler systems and other fire prevention and extinguishing
fixtures, systems, machinery, apparatus and equipment, and all engines, motors,
dynamos, machinery, wiring, pipes, pumps, tanks, conduits and ducts constituting
a part of any of the foregoing, it being understood and agreed that all of the
Fixtures are appropriated to the use of the Real Estate and, for the purposes of
this Deed of Trust, shall be deemed conclusively to be Real Estate and conveyed
hereby;
TOGETHER with Grantor's interest in all drainage, mineral, water, oil, gas,
timber and sewer pipes, conduits and wires, and other facilities furnishing
utility or other services and other similar rights now or hereafter benefitting
the Real Estate or any portion thereof or appertaining thereto;
TOGETHER with Grantor's right, title and interest in, to and under all
leases, subleases, underlettings, concession agreements, licenses and other
occupancy agreements which now or hereafter may affect the Real Estate or any
portion thereof and under any and all guarantees, modifications, renewals and
extensions thereof (collectively, the "Subleases"), and in and to any and all
deposits made or hereafter made as security under the Subleases, subject to the
prior legal rights under the Subleases of the sublessees making such deposits,
together with any and all of the benefits, revenues, income, rents, issues and
profits due or to become due or to which Grantor is now or hereafter may become
entitled arising out of the Subleases or the Real Estate or any portion thereof
(collectively the "Rents");
<PAGE>
TOGETHER with (a) all unearned premiums, accrued, accruing or to accrue
under any insurance policies now or hereafter obtained by Grantor and Grantor's
interest in and to all proceeds which now or hereafter may be paid in connection
with the conversion of the Property or any portion thereof into cash or
liquidated claims, together with the interest payable thereon and the right to
collect and receive the same, including, but without limiting the generality of
the foregoing, proceeds of casualty insurance, title insurance and any other
insurance now or hereafter maintained with respect to the Real Estate or in
connection with the use or operation thereof (collectively the "Insurance
Proceeds"), and (b) all awards, payments and/or other compensation, together
with the interest payable thereon and the right to collect and receive the same,
which now or hereafter may be made with respect to the Property as a result of
(i) a taking by eminent domain, condemnation or otherwise, (ii) the change of
grade of any street, road or avenue or the widening of any streets, roads or
avenues adjoining or abutting the Land, or (iii) any other injury to, or
decrease in the value of, the Property or any portion thereof (collectively the
"Awards"), in any of the foregoing circumstances described in clauses (a) or (b)
above to the extent of the entire amount of the Indebtedness outstanding as of
the date of Beneficiary's receipt of any such Insurance Proceeds or Awards,
notwithstanding that the entire amount of the Indebtedness may not then be due
and payable, and also to the extent of reasonable attorneys' fees, costs and
disbursements incurred by Trustee in connection with the collection of any such
Insurance Proceeds or Awards. Grantor hereby assigns to Trustee and Beneficiary,
and Beneficiary is hereby authorized to collect and receive, all Insurance
Proceeds and Awards and to give proper receipts and acquittances therefor and to
apply the same toward the Indebtedness as herein set forth notwithstanding that
the entire amount of the Indebtedness may not then be due and payable. Grantor
hereby agrees to make, execute and deliver, from time to time, upon demand, such
further documents, instruments or assurances as may be requested by Trustee or
Beneficiary to confirm the assignment of the Insurance Proceeds and the Awards
to Trustee, free and clear of any interest of Grantor whatsoever therein and
free and clear of any other liens, claims or encumbrances of any kind or nature
whatsoever;
TOGETHER with all right, title and interest of Grantor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Real Estate, and in each such
case, the foregoing shall be deemed a part of the Real Estate and shall become
subject to the lien of this Deed of Trust as fully and completely, and with the
same priority and effect, as though now owned by Grantor and specifically
described herein, without any further deed of trust, mortgage, conveyance,
assignment or other act by Grantor;
<PAGE>
TOGETHER with all of Grantor's rights to further encumber the Property for
debt.
TOGETHER with all goods, equipment, machinery, furniture, furnishings,
Fixtures, appliances, inventory, building materials, chattels and articles of
personal property (other than personal property which is or at any time has
become hazardous or toxic waste or waste products or hazardous substances),
including any interest therein now or at any time hereafter affixed to, attached
to or used in any way in connection with or to be incorporated at any time into
the Real Estate or placed on any part thereof wheresoever located, whether or
not attached to or incorporated in the Real Estate, together with any and all
replacements thereof, appertaining and adapted to the complete and compatible
use, enjoyment, occupancy, operation or improvement of the Real Estate.
TO HAVE AND TO HOLD the Property, and the rights and privileges hereby
deeded or intended so to be unto the Trustee and its successors and assigns for
the uses and purposes herein set forth, until the Indebtedness is fully paid and
the Obligations are fully performed in accordance with the provisions set forth
herein and in the other Loan Documents.
Grantor, for itself and its successors and assigns, further represents,
warrants, covenants and agrees with Trustee and Beneficiary as follows:
1. Warranty of Title. Grantor warrants to Trustee and Beneficiary that it
has good and marketable title to the Leasehold Estate and Fixtures and has the
right to convey the same in accordance with the provisions set forth in this
Deed of Trust and that this Deed of Trust is subject only to the exceptions to
title more particularly described in Exhibit C attached hereto and made a part
hereof (collectively the "Permitted Encumbrances"). Grantor shall (a) preserve
such title and the validity and priority of the lien of this Deed of Trust and
shall forever warrant and defend the same unto Trustee and Beneficiary against
the claims of all and every person or persons, corporation or corporations and
parties whomsoever, and (b) make, execute, acknowledge and deliver all such
further or other deeds, documents, instruments or assurances and cause to be
done all such further acts and things as may at any time hereafter be required
by Trustee or Beneficiary to confirm and fully protect the lien and priority of
this Deed of Trust.
2. Payment of Indebtedness. (a) Grantor shall pay the Indebtedness at the
times and places and in the manner specified in the Indenture and shall perform
all of the Obligations in accordance with the provisions set forth herein and in
the other Loan Documents.
<PAGE>
(b) Any payment made in accordance with the terms of this Deed of
Trust by any person at any time liable for the payment of the whole or any part
of the Indebtedness, or by any subsequent owner of the Property, or by any other
person whose interest in the Property might be prejudiced in the event of a
failure to make such payment, or by any stockholder, officer or director of a
corporation or by any partner of a partnership which at any time may be liable
for such payment or may own or have such an interest in the Property shall be
deemed, as between Beneficiary and all persons who at any time may be liable as
aforesaid or may own the Property, to have been made on behalf of all such
persons.
3. Requirements; Proper Care and Use. (a) To the extent required by the
Indenture, subject to the right of Grantor to contest a Legal Requirement
(hereinafter defined) as provided in Article 11 hereof and subject to the terms
of the Lease, Grantor promptly shall comply with, or cause to be complied with,
all present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, restrictions and requirements
(collectively "Legal Requirements") of every Governmental Authority (hereinafter
defined) having jurisdiction over Grantor or the Property or the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
Restoration (hereinafter defined) of the Real Estate, without regard to the
nature of the work to be done or the cost of performing the same, whether
foreseen or unforeseen, ordinary or extraordinary, and shall perform, or cause
to be performed, all obligations, agreements, covenants, restrictions and
conditions now or hereafter of record which may be applicable to Grantor or to
the Property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or Restoration of the Real Estate.
(b) Except as otherwise provided in the Indenture, Grantor shall (i)
not abandon the Real Estate or any portion thereof, (ii) maintain the Real
Estate and Fixtures in good repair, order and condition, (iii) promptly make all
necessary repairs, renewals, replacements, additions and improvements to the
Real Estate and Fixtures, (iv) not commit or suffer waste with respect to the
Real Estate and Fixtures, (v) refrain from impairing or diminishing the value or
integrity of the Property or the priority or security of the lien of this Deed
of Trust, (vi) not remove, demolish or materially alter any of the Real Estate
or Fixtures without the prior written consent of Beneficiary in each instance,
except that Grantor shall have the right to remove and dispose of, free of the
lien of this Deed of Trust, such Fixtures as may, from time to time, become worn
out or obsolete, provided that, simultaneously with or prior to such removal,
any such Fixtures shall be replaced with other Fixtures which shall have a value
and utility at least equal to that of the replaced Fixtures and which shall be
free of any security agreements or other liens or encumbrances of any kind or
nature whatsoever, and by such removal and replacement, Grantor shall be deemed
to have subjected such replacement Fixtures to the lien and priority of this
Deed of Trust, (vii) not make, install or permit to be made or installed, any
alterations or additions to the Real Estate if doing so would, in the sole
opinion of Beneficiary, impair to any extent the value of the Property, (viii)
not make, suffer or permit any nuisance to exist on the Real Estate or any
portion thereof, and (ix) permit Beneficiary and its agents, at all reasonable
times and without prior notice, to enter upon the Real Estate for the purpose of
inspecting and appraising the Real Estate or any portion thereof.
<PAGE>
(c) To the extent that Grantor retains control of same in accordance
with the terms and conditions of the Lease, Grantor shall not by any act or
omission permit any building or other improvement located on any property which
is not subject to the lien of this Deed of Trust to rely upon the Real Estate or
any portion thereof or any interest therein to fulfill any Legal Requirement and
Grantor hereby assigns to Beneficiary any and all rights to give consent for all
or any portion of the Real Estate or any interest therein to be so used. The
Real Estate is zoned as one or more lots separate and apart from all other
premises and Grantor shall not, by any act or omission, impair the integrity of
the Real Estate as such lot or lots or initiate or join in any zoning change,
private easement or any other modification of the zoning regulating the Real
Estate. Grantor shall not (i) impose any restrictive covenants or encumbrances
upon the Real Estate, execute or file any subdivision plot affecting the Real
Estate or consent to the annexation of the Real Estate to any municipality or
(ii) permit or suffer the Real Estate to be used by the public or any Person in
such manner as might make possible a claim of adverse usage or possession or of
any implied deduction or easement. Any act or omission by Grantor which would
result in a violation of any of the provisions of this Article 3 shall be null
and void.
4. Taxes on Trustee or Beneficiary. (a) If the United States of America,
the State in which the Real Estate is located or any political subdivision
thereof or any city, town, county or municipality in which the Real Estate is
located or any agency, department, bureau, board, commission or instrumentality
of any of the foregoing now existing or hereafter created (collectively
"Governmental Authorities") shall levy, assess or charge any tax, assessment,
fee or imposition upon this Deed of Trust or any other Loan Document, the
Indebtedness, the interest of Trustee or Beneficiary in the Property, or Trustee
or Beneficiary by reason of this Deed of Trust or any other Loan Document, the
Indebtedness or Trustee's or Beneficiary's interest in the Property
(individually a "Tax", and collectively "Taxes") (excepting therefrom any income
tax on payments of interest made under the Indenture), Grantor shall pay all
such Taxes to, for, or on account of, Trustee or Beneficiary, as the case may
be, as they become due and payable and, on demand, shall furnish proof of such
payment to Beneficiary. If Grantor shall fail to pay any such Tax then
Mortgagee, at its option and without notice, may pay such Tax and, in such
event, the amount so paid (i) shall be deemed to be Indebtedness, (ii) shall be
a lien on the Property prior to any right or title to, interest in, or claim
upon, the Property subordinate to the lien of this Deed of Trust, and (iii)
immediately shall be due and payable, on demand, together with interest thereon
at the rate of interest then payable under the Indenture including, in
calculating such rate of interest, any additional interest which may be imposed
under the Indenture by reason of any default thereunder (such rate of interest
being hereinafter referred to as the "Interest Rate"), from the date of any such
payment by Beneficiary to the date of repayment to Beneficiary. In the event of
the passage of any law or regulation permitting, authorizing or requiring any
such Tax to be levied, assessed or charged, which law or regulation, in the sole
opinion of Beneficiary, may prohibit Grantor from paying any Taxes, to, for or
on account of, Trustee or Beneficiary, or which may make such payment by Grantor
result in the imposition of interest exceeding the maximum rate of interest then
permitted by law, then, Beneficiary may declare the entire amount of the
Indebtedness immediately due and payable.
<PAGE>
(b) If any Governmental Authority shall at any time require revenue,
documentary or similar stamps to be affixed to this Deed of Trust or any other
Loan Document or shall require the payment of any Taxes with respect to the
ownership or recording of this Deed of Trust or any other Loan Document,
Grantor, upon demand, shall pay for such stamps and/or such Taxes in the
required amount and shall deliver the same to Beneficiary, together with a copy
of the receipted bill therefor. If Grantor shall fail to pay for any such
stamps, then, Beneficiary, at its option and without notice, may pay for the
same and, in such event, the amount so paid (i) shall be deemed to be
Indebtedness, (ii) shall be a lien on the Property prior to any right or title
to, or interest in, or claim upon, the Property subordinate to the lien of this
Deed of Trust, and (iii) immediately shall be due and payable, on demand,
together with interest thereon at the Interest Rate from the date of any such
payment by Beneficiary to the date of repayment to Beneficiary. Grantor shall
indemnify Trustee and Beneficiary for, and shall hold Trustee and Beneficiary
harmless from and against, any and all liability which Trustee and Beneficiary
may incur on account of such revenue, documentary or other similar stamps or by
reason of any Taxes referred to in Paragraphs 4(a) and 4(c) hereof whether such
liability arises before or after payment of the Indebtedness and whether or not
the lien of this Deed of Trust shall have been released.
(c) In the event of the passage, after the date of this Deed of Trust,
of any law of the jurisdiction in which the Real Estate is located which shall
deduct from the value of the Property, for purposes of taxation, any lien
thereon or shall change in any way the laws for the taxation of deeds of trust
or debts secured by deeds of trust for State or local purposes or the manner of
the collection of any such taxes and shall impose any Tax, either directly or
indirectly, on this Deed of Trust or any other Loan Document, then, Beneficiary
may declare the entire amount of the Indebtedness immediately due and payable;
provided, however, that such election shall be ineffective if Grantor is exempt
from payment of such Tax or, if not exempt from payment of such Tax or, if
Grantor shall be permitted by law to pay the whole of such Tax in addition to
all other payments required hereunder and under the other Loan Documents and if
Grantor shall pay such Taxes when the same shall be due and payable and shall
agree in writing to pay such Taxes when thereafter levied or assessed against
the Property.
<PAGE>
5. Payment of Impositions. (a) Subject to the provisions of Article 11
hereof and as may be required by the Lease, not later than the date on which
payment of the same shall be due, that is, the day before the date on which any
fine, penalty, interest, late charge or loss may be added thereto or imposed by
reason of the non-payment thereof, Grantor shall pay and discharge all Taxes
(including, but without limiting the generality of the foregoing, all real
property taxes and assessments, personal property taxes, income, franchise,
withholding, profits and gross receipts taxes), charges for any easement or
agreement maintained for the benefit of the Property or any portion thereof,
general and special assessments and levies, permit, inspection and license fees,
water and sewer rents and charges and any other charges of every kind and nature
whatsoever, foreseen or unforeseen, ordinary or extraordinary, public or
private, which, at any time, are imposed upon or levied or assessed against
Grantor or the Property or any portion thereof, or which arise with respect to,
or in connection with, the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or Restoration of the Real Estate or any portion
thereof, together with any penalties, interest or late charges which may be
imposed in connection with any of the foregoing (all of the foregoing taxes,
assessments, levies and other charges, together with such interest, penalties
and late charges, being hereinafter collectively referred to as "Impositions").
If, however any Legal Requirement shall allow that any Imposition may, at
Grantor's option, be paid in installments (whether or not interest shall accrue
on the unpaid balance of such Imposition), Grantor may exercise the option to
pay such Imposition in such installments, and, in such event, Grantor shall be
responsible for the payment of all such installments, together with the
interest, if any, thereon, in accordance with the provisions of the applicable
Legal Requirement. Not later than the date on which each Imposition is due and
payable, Grantor shall deliver to Beneficiary evidence acceptable to Beneficiary
showing the payment of such Imposition. Grantor also shall deliver to
Beneficiary, within ten (10) days after receipt thereof, copies of all
settlements and notices pertaining to any Imposition which may be issued by any
Governmental Authority.
<PAGE>
(b) Nothing contained in this Deed in Trust shall affect any right or
remedy of Beneficiary under this Deed of Trust or otherwise to pay, without
notice or demand to Grantor, any Imposition from and after the date on which
such Imposition shall have become due and payable and, in such event, the amount
so paid (i) shall be deemed to be Indebtedness, (ii) shall be a lien on the
Property prior to any right or title to, interest in, or claim upon, the
Property subordinate to the lien of this Deed of Trust, and (iii) shall be
immediately due and payable, on demand, together with interest thereon at the
Interest Rate, from the date of any such payment by Beneficiary to the date of
repayment to Beneficiary.
6. Deposits. Provided that Grantor does not deposit the annual Impositions
and Insurance Premiums with the fee holder of the Real Estate in accordance with
the terms and conditions of the Lease, Grantor, at Beneficiary's option, shall
deposit with Beneficiary on the first day of each month from and after the date
hereof, an amount equal to one-twelfth (1/12th) of (a) the annual Impositions,
and (b) the annual premiums for the insurance required to be provided hereunder
with respect to the Real Estate (such premiums for insurance being hereinafter
referred to as "Insurance Premiums"). The amount of annual Impositions and
Insurance Premiums, when unknown, shall be estimated by Beneficiary. Such
deposits shall be used by Beneficiary to pay Impositions and Insurance Premiums
when due. From time to time, on demand, Grantor shall pay to Beneficiary
additional sums sufficient to permit payment of the next due installments of
Impositions and Insurance Premiums, if, and to the extent that, the required
monthly deposits thereafter falling due before the respective payment dates
would otherwise be insufficient to permit the full payment thereof. Upon any
failure of Grantor to make any payment of the Indebtedness when due and payable
or to perform any of the Obligations in accordance with the provisions of this
Deed of Trust or any other Loan Document, Beneficiary may apply any funds
deposited with Beneficiary for Impositions or Insurance Premiums to the payment
of any of the Indebtedness or to the performance of any such Obligation. To the
extent permitted by law, the sums deposited pursuant to this Article 6 shall
bear no interest and may be commingled with other funds of Beneficiary. Upon an
assignment of this Deed of Trust, Beneficiary shall have the right to pay over
the balance of any sums deposited pursuant to this Article 6 and then in its
possession to Beneficiary's assignee, and, thereupon, Beneficiary shall be
completely released from all liability with respect to such sums and Grantor
shall look solely to Beneficiary's assignee with respect thereto. The foregoing
provisions shall apply to every transfer of such deposits to a new assignee.
Upon payment of the entire amount of the Indebtedness and performance of the
Obligations in accordance with the provisions of this Deed of Trust and the
other Loan Documents, or, at the election of Beneficiary, at any prior time, the
balance of the deposits then in Beneficiary's possession shall be paid over to
the record owner of the Property. Grantor, at Beneficiary's request, shall make
the aforesaid deposits with such servicer or financial institution as
Beneficiary from time to time shall designate. Notwithstanding the foregoing,
Beneficiary agrees not to require deposits for Impositions or Insurance Premiums
unless and until Grantor shall have failed to pay such Impositions and Insurance
Premiums directly to the respective governmental agencies and insurance
companies when due and payable, on two occasions in any one calendar year.
<PAGE>
7. Insurance. (a) To the extent not inconsistent with the terms of the
Lease, Grantor shall keep all improvements on said land, now or hereafter
erected, constantly insured pursuant to the terms of the Indenture, including,
but not limited to, the following:
(i) Grantor shall provide and keep in full force and effect, or cause
to be provided and kept in full force and effect, for the benefit of
Beneficiary, as hereinafter provided:
a. insurance for the Buildings and the Fixtures (w) against loss
or damage by fire, lightning, windstorm, tornado, hail and such other
further and additional hazards of whatever kind or nature as are now or
hereafter may be covered by standard extended coverage "all risk"
endorsements (including, but without limiting the generality of the
foregoing, and specifically, vandalism, malicious mischief and damage by
water), (x) against flood disaster pursuant to the Flood Disaster
Protection Act of 1973, 84 Stat. 572, 42 U.S.C. 4001 if the Real Estate is
located in an area identified by the United States Department of Housing
and Urban Development as a flood hazard area, (y) against loss of rentals
and business interruption due to any of the foregoing causes, and (z) when
and to the extent required by Beneficiary, against any other risk insured
against by persons operating properties similar to the Real Estate and
located in the vicinity of the Real Estate or operations similar to the
operations conducted at the Real Estate;
<PAGE>
b. insurance for demolition and increased cost of construction
coverage;
c. if a sprinkler system shall be located in the Buildings,
sprinkler leakage insurance;
d. comprehensive public liability insurance with respect to the
Real Estate and the operations related thereto, whether conducted on or off
the Real Estate, against liability for personal injury, including bodily
injury and death, and property damage. Such comprehensive public liability
insurance shall be on an occurrence basis and shall specifically include,
but not be limited to, sprinkler leakage legal liability (if a sprinkler
shall be located in the Buildings), water damage legal liability, products
liability, motor vehicle liability for all owned and non-owned vehicles,
including rented and leased vehicles, and contractual indemnification;
e. contingent liability insurance in connection with any loss
arising from the fact or claim that a Building is or is deemed to be a
non-conforming property; and
f. such other insurance in such amounts as may from time to time
reasonably be required by Beneficiary against such other insurable hazards
as at the time are commonly insured against in the case of properties
similar to the Real Estate and located in the vicinity of the Real Estate
or operations similar to the operations conducted at the Real Estate.
<PAGE>
All insurance provided hereunder shall be in such form and in such amounts as,
from time to time, shall be acceptable to Beneficiary, in its reasonable
discretion, shall name Beneficiary as a named insured under a standard
"non-contributory mortgagee" endorsement or its equivalent, which shall be
acceptable to Beneficiary, shall provide for loss payable to Beneficiary, shall
be provided by insurance companies which have a Best's rating of at least "AXII"
and otherwise shall be acceptable to Beneficiary in its sole discretion.
Anything contained herein to the contrary notwithstanding, in no event shall the
insurance provided herein be in an amount which is less than One Hundred Percent
(100%) of the full replacement cost of the Buildings and the Fixtures, including
the cost of debris removal, but excluding the value of foundations and
excavations, as determined from time to time by Beneficiary. Every policy of
insurance referred to in this Article 7 shall contain an agreement by the
insurer that it will not cancel such policy except after thirty (30) days prior
written notice to Beneficiary and that any loss payable thereunder shall be
payable notwithstanding any act or negligence of Grantor or Beneficiary which
might, absent such agreement, result in a forfeiture of all or a part of such
insurance payment and notwithstanding (A) occupancy or use of the Property for
purposes more hazardous than permitted by the terms of such policy, (B) any
foreclosure or other action or proceeding taken by Beneficiary pursuant to this
Deed of Trust upon the happening of a Default (hereinafter defined) or (C) any
change in title or ownership of the Property. Grantor shall assign and deliver
to Beneficiary all such policies of insurance, or duplicate originals thereof
and a certificate of insurance, certified to Beneficiary by the insurer as being
true copies, as collateral and further security for payment of the Indebtedness
and performance of the Obligations. If any insurance required to be provided
hereunder shall expire, be withdrawn, become void by breach of any condition
thereof by Grantor or by any lessee of the Real Estate or any portion thereof,
or become void or questionable by reason of the failure or impairment of the
capital of any insurer, or if for any other reason whatsoever any such insurance
shall become unsatisfactory to Beneficiary, Grantor immediately shall obtain new
or additional insurance which shall be satisfactory to Beneficiary in its
reasonable discretion. Grantor shall not take out any separate or additional
insurance which is contributing in the event of loss unless it is properly
endorsed and otherwise satisfactory to Beneficiary in all respects.
(ii) Grantor shall:
a. pay or cause to be paid as they become due all premiums for
the insurance required hereunder and
<PAGE>
b. not later than the expiration of each such policy, deliver a
renewal policy or a duplicate original thereof or certificates thereof to
Beneficiary by the insurer as being a true copy evidencing the insurance
required to be provided hereunder, marked "premium paid", or accompanied by
such other evidence of payment as shall be satisfactory to Beneficiary in
its sole discretion.
(iii) If Grantor shall be in default of its obligation to so insure or
deliver any such prepaid policy or policies of insurance to Beneficiary in
accordance with the provisions hereof, Beneficiary, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and, in such event, the amount of all such premium or
premiums:
a. shall be deemed to be Indebtedness,
b. shall be a lien on the Property prior to any right or title
to, or interest in, or claim upon, the Property subordinate to the lien of
this Deed of Trust and
c. shall be immediately due and payable, on demand, together with
interest thereon at the Interest Rate, from the date of any such payment by
Beneficiary to the date of repayment to Beneficiary.
(iv) Grantor shall increase the amount of insurance required herein at
the time that each such policy of insurance is renewed (but, in no event, less
frequently than once during each twelve (12) month period) by using the F.W.
Dodge Building Index to determine whether there shall have been an increase in
the replacement cost of the Buildings and the Fixtures since the most recent
adjustment to any such policy and, if there shall have been any such increase,
the amount of insurance required to be provided hereunder shall be adjusted
accordingly.
(v) Grantor promptly shall comply with, and shall cause the Buildings
and the Fixtures to comply with, (i) all of the provisions of each such
insurance policy, and (ii) all of the requirements of the insurers thereunder
applicable to Grantor or to any of the Buildings or the Fixtures or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration, repair
or Restoration (hereinafter defined) of any of the Buildings or the Fixtures,
even if such compliance would necessitate structural changes or improvements or
would result in interference with the use or enjoyment of the Real Estate or any
portion thereof. If Grantor shall use the Real Estate or any portion thereof in
any manner which would permit the insurer to cancel any insurance required to be
provided hereunder, Grantor immediately shall obtain a substitute policy which
shall be satisfactory to Beneficiary and which shall be effective on or prior to
the date on which any such other insurance policy shall be cancelled. Grantor
shall assign and deliver to Beneficiary all such policies of insurance, or
duplicate originals thereof and a certificate of insurance, certified to
Beneficiary by the insurer as being true copies, as collateral and further
security for payment of Indebtedness and performance of the Obligations.
<PAGE>
(b) If the Buildings or the Fixtures or any portion thereof shall
be damaged, destroyed or injured by fire or any other casualty (whether insured
or uninsured), Grantor shall give immediate notice thereof to Beneficiary, and,
provided that Beneficiary shall have notified Grantor of Beneficiary's election
to apply the Insurance Proceeds (if any) or any portion thereof paid on account
thereof to Grantor toward the Restoration of the Buildings or the Fixtures in
accordance with the provisions of Paragraph 7(c) hereof, then, Grantor promptly
shall commence and diligently shall continue and complete the repair,
restoration, replacement or rebuilding (hereinafter referred to as
"Restoration") of the Buildings and the Fixtures so damaged, destroyed or
injured substantially to their value, condition and character immediately prior
to such damage, destruction or injury, in accordance with plans and
specifications (bearing the signed approval of an architect satisfactory to
Beneficiary) which shall have been approved by Beneficiary prior to the
commencement of such Restoration. Grantor diligently shall complete, and pay for
the cost of, the Restoration of the Buildings and the Fixtures located on the
Land which are at any time in the process of construction, alteration or
Restoration. Notwithstanding any damage to, or destruction of, or injury to, the
Buildings or the Fixtures or any portion thereof by fire or other casualty,
Grantor shall continue to make all payments due under this Deed of Trust and
under the Indenture and the other Loan Documents in accordance with the
provisions of this Deed of Trust, the Indenture and the applicable provisions of
the other Loan Documents. Any Insurance Proceeds remaining after completion of
such Restoration shall be retained by Beneficiary and shall be applied to the
payment of the Indebtedness then outstanding, in such proportion and priority as
Beneficiary, in its sole discretion, may elect.
<PAGE>
(c) All Insurance Proceeds which are payable to Grantor in
connection with any damage to, or destruction of, or injury to, the Buildings or
the Fixtures shall be paid to Beneficiary, and Beneficiary is hereby authorized
to adjust, collect and compromise, in its sole discretion, all claims under all
policies of insurance and to execute and deliver on behalf of Grantor all
necessary proofs of loss, receipts, vouchers and releases required by the
insurers. Grantor agrees to execute, upon demand by Beneficiary, all such proofs
of loss, receipts, vouchers and releases and to cooperate with Beneficiary in
connection therewith. Each insurer is hereby authorized and directed to make
payment of any Insurance Proceeds under any policies of insurance, including the
return of unearned premiums, directly to Beneficiary instead of to Grantor and
Beneficiary jointly and Beneficiary is hereby authorized to endorse any draft
therefor as Grantor's attorney-in-fact. So long as (i) no Default under this
Deed of Trust, or (ii) any event, which, but for the giving of notice or passage
of time, or both, would constitute a Default under this Deed of Trust shall have
occurred, Beneficiary shall pay the Insurance Proceeds or any portion thereof
(after deducting therefrom all costs and expenses, including, but without
limiting the generality of the foregoing, reasonable attorneys' fees, costs and
disbursements, incurred by Trustee or Beneficiary in connection with the
collection thereof) to Grantor, in accordance with the terms and conditions of
the Indenture, and further on such terms and conditions as Beneficiary, in its
sole discretion, may specify, for the sole purpose of Grantor's Restoration of
the Buildings and the Fixtures so damaged, destroyed or injured, it being
understood and agreed, however, that Beneficiary shall have no obligation
whatsoever to see to the proper application of any Insurance Proceeds so paid to
Grantor. Reduction of the outstanding amount of the Indebtedness resulting from
the application of any such Insurance Proceeds to such Indebtedness by
Beneficiary shall be deemed to take effect only on the date of Beneficiary's
receipt of such Insurance Proceeds and its election to apply the same against
the Indebtedness then outstanding hereunder. If, prior to the receipt by
Beneficiary of any Insurance Proceeds, the Property or any portion thereof shall
have been sold by Trustee pursuant to the power of sale provided herein,
Beneficiary shall have the right to receive the Insurance Proceeds to the extent
of any deficiency found to be due upon such sale, whether or not a deficiency
judgment on this Deed of Trust shall have been sought or recovered or denied,
together with interest thereon at the Interest Rate, and the reasonable
attorneys' fees, costs and disbursements incurred by Trustee and Beneficiary in
connection with the collection of the Insurance Proceeds. Anything contained in
this Deed of Trust or any Legal Requirement to the contrary notwithstanding,
Beneficiary shall not be deemed to be a trustee or other fiduciary with respect
to its receipt of any Insurance Proceeds.
<PAGE>
(d) The insurance required by this Deed of Trust may, at the
option of Grantor, be effected by blanket and/or umbrella policies issued to
Grantor covering the Buildings and the Fixtures as well as other properties
(real and personal) which are owned or leased by Grantor, provided that, in each
case, the policies otherwise comply with the provisions of this Deed of Trust
and allocate to the Buildings and the Fixtures, from time to time, the coverage
specified by Beneficiary, without possibility of reduction or coinsurance by
reason of, or damage to, any other property (real or personal) named therein. If
the insurance required by this Deed of Trust shall be effected by any such
blanket or umbrella policies, Grantor shall furnish to Beneficiary original
policies or duplicate originals thereof, with schedules attached thereto showing
the amount of the insurance provided under such policies which is applicable to
the Buildings and the Fixtures.
(e) Any conveyance of the Property, in accordance with the
provisions hereof, shall transfer therewith all of Grantor's interest in all
insurance policies then covering the Buildings and the Fixtures or the
operations conducted at the Real Estate, including, but without limiting the
generality of the foregoing, any unearned premiums.
<PAGE>
8. Condemnation/Eminent Domain. (a) Notwithstanding (i) any taking by
eminent domain, condemnation or otherwise of all or any portion of the Property,
or (ii) the change of grade of any street, road or avenue or the widening of
streets, roads or avenues adjoining or abutting the Land, or (iii) any other
injury to, or decrease in value of, the Property caused in any manner by any
Governmental Authority (any of the foregoing events being hereinafter referred
to as a "Taking"), Grantor shall continue to make all payments due under this
Deed of Trust and under the Indenture and the other Loan Documents in accordance
with the provisions of this Deed of Trust, the Indenture and the applicable
provisions of the other Loan Documents. Grantor shall notify Beneficiary
immediately upon obtaining knowledge of the institution of any proceedings for
any Taking or of any contemplated Taking. All Awards payable to Grantor under
the Lease made in connection with any Taking shall be paid to Beneficiary free
and clear of all liens and encumbrances and shall be held by it in accordance
with the terms of the Indenture. Beneficiary is hereby authorized to collect any
Award and to negotiate and settle, in its sole discretion, any such proceedings
with respect to a Taking and the amount of any Award to be made in connection
therewith and to execute and deliver on behalf of Grantor all necessary proofs
of loss, receipts, vouchers and releases required in connection with any Taking.
Grantor agrees to execute, upon demand by Beneficiary, all such proofs of loss,
receipts, vouchers and releases and to cooperate with Beneficiary in connection
therewith. Each Governmental Authority is hereby authorized and directed to make
payment of any Award made in connection with any Taking directly to Beneficiary
instead of to Grantor and Beneficiary jointly and Beneficiary is hereby
authorized to endorse any draft therefor as Grantor's attorney-in-fact. Subject
to the terms and conditions of the Indenture and so long as (i) no Default under
this Deed of Trust, or (ii) any event, which, but for the giving of notice or
passage of time, or both, would constitute a Default under this Deed of Trust,
shall have occurred, Beneficiary shall pay the Award or any portion thereof
(after deducting therefrom all costs and expenses, including, but without
limiting the generality of the foregoing, reasonable attorneys' fees, costs and
disbursements, incurred by Trustee and Beneficiary in connection with the
collection thereof), to Grantor, on such terms and conditions as Beneficiary, in
its sole discretion, may specify, for the sole purpose of Grantor's Restoration
of the Buildings and the Fixtures remaining after any such Taking, it being
understood and agreed, however, that Beneficiary shall have no obligation
whatsoever to see to the proper application of any Award so paid to Grantor.
Reduction of the outstanding amount of the Indebtedness resulting from the
application of any such Award by Beneficiary shall be deemed to take effect only
on the date of Beneficiary's receipt of such Award and its election to apply the
same against the Indebtedness then outstanding hereunder. If, prior to the
receipt by Beneficiary of any Award, the Property or any portion thereof shall
have been sold by Trustee pursuant to the power of sale provided herein,
Beneficiary shall have the right to receive the Award to the extent of any
deficiency found to be due upon such sale, whether or not a deficiency judgment
on this Deed of Trust shall have been sought or recovered or denied, together
with interest thereon at the Interest Rate, and the reasonable attorneys' fees,
costs and disbursements incurred by Trustee and Beneficiary in connection with
the collection of the Award.
<PAGE>
(b) If there shall be any Taking, then, provided that Beneficiary
shall have notified Grantor of Beneficiary's election to apply the Award or any
portion thereof paid on account of such Taking to Grantor toward the Restoration
of the Buildings and the Fixtures remaining after the Taking, in accordance with
the provisions of Paragraph 8(a) hereof, then, Grantor promptly shall commence
and diligently shall continue and complete the Restoration of the Buildings and
the Fixtures remaining after such Taking substantially to their value, condition
and character immediately prior to such Taking, in accordance with plans and
specifications which shall have been approved by Beneficiary prior to the
commencement of such Restoration. Grantor diligently shall complete, and pay for
the cost of, the Restoration of any Buildings or Fixtures located on the Land
which are at any time in the process of construction, alteration or Restoration.
Any Award remaining after completion of such Restoration shall be retained by
Beneficiary and shall be applied to the payment of the Indebtedness then
outstanding, in such proportion and priority as Beneficiary, in its sole
discretion, may elect.
9. Sale and Lease of the Property. Except as provided in the Indenture,
Grantor shall not, at any time, whether voluntarily or involuntarily, without
the prior written consent of Beneficiary in each instance,
(a) sell, assign, transfer or convey all or any part of the Property
or any interest therein; or
(b) lease or sublease the Real Estate or any portion thereof except in
accordance with the terms hereof; or
(c) (i) make any new or additional deed of trust, mortgage or other
loan which is secured by the Property or any portion thereof (whether superior
or junior to the lien of this Deed of Trust and whether recourse or
non-recourse) unless such loan is made by Beneficiary, or (ii) except for the
Permitted Encumbrances and subject to the provisions of Articles 10 and 11,
otherwise create, grant, permit or suffer any lien, security interest, claim,
charge or encumbrance of any kind or nature whatsoever, whether recorded or
unrecorded, against the Property or any portion thereof.
<PAGE>
10. Discharge of Liens. Subject to the terms and conditions of the
Indenture, Grantor at all times shall keep the Property free from the liens of
mechanics, laborers, contractors, subcontractors and materialmen and, except for
the Permitted Encumbrances and any new or additional deeds of trust or mortgages
which may be made to Beneficiary, free from any and all other liens, claims,
charges or encumbrances of any kind or nature whatsoever.
11. Right of Contest. To the extent permitted by the Indenture, Grantor, at
its sole cost and expense, may, in good faith, contest, by proper legal actions
or proceedings, the validity of any Legal Requirement or the application thereof
to Grantor or the Property, or the validity or amount of any Imposition or the
validity of the claims of any mechanics, laborers, subcontractors, contractors
or materialmen.
12. Subleases. (a) Except to the extent permitted by the Indenture, Grantor
has no right or power, as against Beneficiary, without the prior written consent
of Beneficiary in each case (i) to enter into any Subleases or to modify, amend,
cancel, extend, renew, accept for surrender or otherwise change in any manner
any of the terms, covenants or conditions of any Subleases, (ii) to consent to
any assignment of any Sublease or any subletting of the portion of the Real
Estate subject to any Sublease, or (iii) to assign, mortgage or otherwise
encumber any of the Subleases or any of the Rents due or to become due
thereunder or to which Beneficiary may now or hereafter become entitled, or (iv)
to accept prepayments of installments of rent for more than thirty (30) days in
advance of the time when the same shall become due or to anticipate the rents
thereunder, except for security deposits not in excess of one (1) month's rent.
Grantor shall notify Beneficiary not later than six (6) months prior to the date
of the expiration of the term of any Sublease of its intention either to renew
or not renew any such Sublease and if Grantor shall intend to renew the
Sublease, the terms and conditions of any such renewal Sublease.
<PAGE>
(b) In addition to containing such other terms and conditions as
Beneficiary shall approve, each Sublease which shall be entered into in
accordance with the provisions hereof shall (i) not permit the sublessee
thereunder to terminate or invalidate the terms of its Sublease as a result of
any action taken by Trustee or Beneficiary to enforce any right or remedy under
this Deed of Trust, including, but without limiting the generality of the
foregoing, any sale of the Property or any portion thereof by Trustee pursuant
to the power of sale provided herein or otherwise, (ii) include a subordination
clause providing that the Sublease and the interest of the sublessee thereunder
in the Property are in all respects subject and subordinate to this Deed of
Trust, (iii) provide that, at the option of Beneficiary or the purchaser at a
sale by Trustee pursuant to the power of sale provided herein or otherwise or
the grantee in a voluntary conveyance in lieu of such Trustee's sale, the
sublessee thereunder shall attorn to Beneficiary or to such purchaser or grantee
under all of the terms of the Sublease and recognize such entity as the
sublessor under the Sublease for the balance of the term of the Sublease, and
(iv) provide that, in the event of the enforcement by Beneficiary of the rights
and remedies provided by law or in equity or by this Deed of Trust, any person
succeeding to the interest of Beneficiary as a result of such enforcement shall
not be bound by any prepayment of installments of rent for more than thirty (30)
days in advance of the time when the same shall become due or any amendment,
modification, extension, cancellation or renewal of the Sublease made without
the prior written consent of Beneficiary.
(c) As to any Subleases which shall be consented to by Beneficiary,
Grantor shall (i) promptly perform all of the provisions of the Subleases on the
part of the sublessor thereunder to be performed, (ii) promptly enforce all of
the provisions of the Subleases on the part of the sublessees thereunder to be
performed, (iii) refrain from taking any action which would result in the
termination of the Sublease by any lessee thereunder or the diminution of the
Rents thereunder, (iv) appear in and prosecute or defend any action or
proceeding arising under, growing out of, or in any manner connected with, the
Subleases or the obligations of the sublessor or the sublessees thereunder, as
the case may be, (v) exercise, within five (5) days after demand by Beneficiary,
any right to request from the sublessee under any Sublease a certificate with
respect to the status thereof, (vi) deliver to Beneficiary, within five (5) days
after demand by Beneficiary, a written statement containing the names of all
sublessees, the terms of all Subleases and the spaces occupied and rentals
payable thereunder and a statement of all Subleases which are then in default,
including the nature and magnitude of any such default, (vii) provide
Beneficiary with a copy of each notice of default received by Grantor under any
Sublease immediately upon receipt thereof and deliver to Beneficiary a copy of
each notice of default sent by Grantor under any Sublease simultaneously with
its delivery of such notice under such Sublease, and (viii) promptly deliver to
Beneficiary a fully executed counterpart of each Sublease upon the execution of
the same. All Subleases, if any, shall be subject and subordinate to this Deed
of Trust.
<PAGE>
(d) Grantor hereby assigns to Beneficiary, from and after the date
hereof (including any period allowed by law for redemption after any sale by
Trustee or otherwise as provided herein), primarily, on a parity with the
Property, and not secondarily, as further security for the payment of the
Indebtedness and the performance of the Obligations, the Subleases and the
Rents. Nothing contained in this Article 12 shall be construed to bind
Beneficiary to the performance of any of the terms, covenants, conditions or
agreements contained in any Sublease or otherwise impose any obligation on
Beneficiary (including, but without limiting the generality of the foregoing,
any liability under the covenant of quiet enjoyment contained in any Sublease in
the event that any sublessee shall have been joined as a party defendant in any
action commenced by reason of a Default hereunder or in the event of the sale of
the Property by Trustee pursuant to the power of sale contained herein or
otherwise or in the event any sublessee shall have been barred and foreclosed of
any or all right, title and interest and equity of redemption in the Property),
except that Beneficiary shall be accountable for any money actually received
pursuant to the aforesaid assignment. Grantor hereby further grants to
Beneficiary the right, but not the obligation (i) to enter upon and take
possession of the Real Estate for the purpose of collecting the Rents, (ii) to
dispossess by the usual summary proceedings any sublessee defaulting in making
any payment due under any Sublease to Beneficiary or defaulting in the
performance of any of its other obligations under its Sublease, (iii) to let the
Real Estate or any portion thereof, (iv) to apply the Rents on account of the
Indebtedness, and (v) to perform such other acts as Beneficiary is entitled to
perform pursuant to this Article 12. Such assignment and grant shall continue in
effect until the entire amount of the Indebtedness shall be paid in full and all
of the Obligations shall be fully performed in accordance with this Deed of
Trust and the other Loan Documents, the execution of this Deed of Trust
constituting and evidencing the irrevocable consent of Grantor to the entry upon
and taking possession of the Real Estate by Beneficiary pursuant to such grant,
whether or not the Property shall have been sold by the Trustee pursuant to the
power of sale contained herein or otherwise and without applying for a receiver.
The foregoing provisions hereof shall constitute an absolute and present
assignment of Rents from the Real Estate. Notwithstanding the foregoing,
Beneficiary grants to Grantor, not as a limitation or condition hereof, but as a
personal covenant available only to Grantor and its successors and not to any
sublessee or other person, a license to collect all of the Rents and to retain,
use and enjoy the same, unless a Default shall exist hereunder, or unless any
event shall have occurred which, with the giving of notice or the lapse of time,
or both, would constitute a Default hereunder. In the event of any Default
hereunder, Grantor shall pay monthly, in advance, to Beneficiary, upon
Beneficiary's entry into possession pursuant to the foregoing grant, or to any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of the Real Estate and, upon the failure of Grantor
to make any such payment, Grantor shall vacate and surrender the possession of
the Real Estate to Beneficiary or to such receiver, and upon Grantor's failure
to so vacate and surrender, Grantor may be evicted by summary proceedings.
<PAGE>
(e) Grantor shall receive the Rents as set forth in Section 12(d)
hereof and shall hold the right to receive the Rents as a trust fund to be
applied first to the payment of Impositions and then to the payment of the
Indebtedness and, thereafter, to the payment of Insurance Premiums for policies
required to be provided hereunder before using any part of the total of the same
for any other purpose.
(f) Upon notice and demand, Grantor shall, from time to time, execute,
acknowledge and deliver to Beneficiary, or shall cause to be executed,
acknowledged and delivered to Beneficiary, in form satisfactory to Beneficiary,
one or more separate assignments (confirmatory of the general assignment
provided in this Article 12) of the sublessor's interest in any Sublease.
Grantor shall pay to Beneficiary the reasonable expenses incurred by Beneficiary
in connection with the preparation and recording of any such instrument.
13. Estoppel Certificates. Grantor, within five (5) business days after
request by Beneficiary, shall deliver, in form satisfactory to Beneficiary, in
its sole discretion, a written statement, duly executed and acknowledged,
setting forth the amount of the Indebtedness then outstanding and whether any
offsets, claims, counterclaims or defenses exist against the Indebtedness
secured by this Deed of Trust, and if any are alleged to exist, the nature
thereof shall be set forth in detail.
14. Loan Document Expenses. . Grantor shall pay, together with any interest
or penalties imposed in connection therewith, all expenses incident to the
preparation, execution, acknowledgement, delivery and/or recording of this Deed
of Trust and the other Loan Documents, including, but without limiting the
generality of the foregoing, all filing, registration and recording fees and
charges, documentary stamps, intangible taxes and all Federal, State, county and
municipal taxes, duties, imposts, assessments and charges now or hereafter
required by reason of, or in connection with, this Deed of Trust or any other
Loan Document and, in any event, otherwise shall comply with the provisions set
forth in Article 4 hereof.
<PAGE>
15. Beneficiary's Right to Perform. In the event of any Default hereunder,
Beneficiary may (but shall be under no obligation to) at any time perform the
Obligations, without waiving or releasing Grantor from any Obligations or any
Default under this Deed of Trust, and, in such event, the cost thereof,
including, but without limiting the generality of the foregoing, reasonable
attorneys' fees, costs and disbursements incurred in connection therewith (a)
shall be deemed to be Indebtedness, (b) shall be a lien on the Property prior to
any right or title to, interest in, or claim upon, the Property subordinate to
the lien of this Deed of Trust, and (c) shall be payable, on demand, together
with interest thereon at the Interest Rate, from the date of any such payment by
Beneficiary to the date of repayment to Beneficiary. No payment or advance of
money by Beneficiary pursuant to the provisions of this Article 15 shall cure,
or shall be deemed or construed to cure, any such Default by Grantor hereunder
or waive any rights or remedies of Beneficiary hereunder or at law or in equity
by reason of any such Default.
16. Grantor's Existence. Subject to the provisions of the Indenture,
Grantor shall do all things necessary to preserve and keep in full force and
effect its existence, rights and privileges under the laws of the State in which
the Property is located and its right to own property and transact business in
such State.
17. Trustee's and Beneficiary's Cost and Expenses. If (a) Grantor shall
fail to make any payment of Indebtedness when the same shall be due and payable,
or shall fail to perform any of the Obligations under this Deed of Trust or any
other Loan Document, or (b) Trustee and/or Beneficiary shall exercise any of
their respective rights or remedies hereunder, or (c) any action or proceeding
is commenced in which it becomes necessary to defend or uphold the lien or
priority of this Deed of Trust or any action or proceeding is commenced to which
Trustee or Beneficiary is or becomes a party, or (d) the taking, holding or
servicing of this Deed of Trust by or on behalf of Beneficiary is alleged to
subject Trustee or Beneficiary to any civil or criminal fine or penalty, or (e)
Beneficiary's review and approval of any document, including, but without
limiting the generality of the foregoing, any Sublease, is requested by Grantor
or required by Beneficiary, then, in any such event, all such costs, expenses
and fees incurred by Trustee and Beneficiary, as the case may be, in connection
therewith (including, but without limiting the generality of the foregoing, any
civil or criminal fines or penalties and reasonable attorneys' fees, costs and
disbursements) (i) shall be deemed to be Indebtedness, (ii) shall be a lien on
the Property prior to any right or title to, interest in, or claim upon, the
Property subordinate to the lien of this Deed of Trust, and (iii) shall be
payable, on demand, together with interest thereon at the Interest Rate, from
the date of any such payment by Trustee or Beneficiary, as the case may be, to
the date of repayment to Trustee or Beneficiary, as the case may be. In any
action to enforce any remedy under this Deed of Trust, including, but without
limiting the generality of the foregoing, sale of the Property by Trustee
pursuant to the power of sale provided herein or otherwise, or to recover or
collect the Indebtedness or any portion thereof, the provisions of this Article
17 with respect to the recovery of costs, expenses, disbursements and penalties
shall prevail unaffected by the provisions of any Legal Requirement with respect
to the same to the extent that the provisions of this Article 17 are not
inconsistent therewith or violative thereof.
<PAGE>
18. Defaults. (a) The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute a default ("Default")
hereunder:
(i) an "Event of Default" under the Indenture;
(ii) subject to Grantor's right to contest the same
pursuant to, and in accordance with, the provisions of Article 11
hereof, the failure to pay any Imposition or any installment on
account thereof or any Insurance Premiums when due and payable
within ten (10) days of notice by Beneficiary of such failure,
provided, however, that Beneficiary shall not be required to give
such notice on more than two occasions in any one calendar year;
or
(iii) the failure to furnish Beneficiary, within five
(5) days after request by Beneficiary, with receipted tax bills
or other proof of payment of the Impositions required to be paid
hereunder or of any Insurance Premiums for the insurance required
to be provided hereunder by not later than the dates on which
such Impositions or Insurance Premiums must be paid so as not to
constitute a Default hereunder; or
(iv) the failure (x) after five (5) days from notice by
Beneficiary, to keep in full force and effect the insurance
required by this Deed of Trust, or (y) to assign and deliver to
Beneficiary the policy or policies of insurance required to be
provided hereunder in accordance with the provisions hereof; or
<PAGE>
(v) the failure to cure any actual or threatened waste,
removal, or demolition of, or material alteration to, the Real
Estate or any portion thereof within twenty (20) days of
knowledge of any such condition; or
(vi) subject to Grantor's right to contest the same
pursuant to, and in accordance with, the provisions of Article 11
hereof, the failure (x) to comply with any Legal Requirement or
to cure any violation or notice of violation of any Legal
Requirement within ten (10) days after the issuance thereof, or
(y) to comply with any requirement of any insurance company
issuing any policy of insurance required to be provided
hereunder; or
(vii) if the Real Estate or any portion thereof shall
be damaged, destroyed or injured by fire or other casualty, or if
there shall be a Taking and, in either of such cases, if Grantor
shall fail to restore the Buildings and the Fixtures in
accordance with the provisions hereof or in accordance with the
terms of the Indenture; or
(viii) if (x) subject to the provisions of Article 9
hereof, Grantor shall make any new or additional mortgages on the
Property or any portion thereof (whether superior or junior to
the lien of this Deed of Trust and whether recourse or
non-recourse) unless any such mortgage shall secure a loan made
by Beneficiary to Grantor, or (y) subject to the provisions of
Article 9 hereof, except for the Permitted Encumbrances, Grantor
otherwise shall encumber the Property or any portion thereof, or
(z) subject to the provisions of Article 10 and Article 11 hereof
and the Indenture, Grantor creates, permits or suffers any lien,
claim, charge or encumbrance of any kind or nature whatsoever to
be recorded against the Property or any portion thereof; or
(ix) if, subject to the provisions of Article 9 hereof
and the Indenture, Grantor shall (x) sell, transfer, assign or
convey the Property or any portion thereof or any interest
therein (by operation of law or otherwise), or (y) lease or
sublease all or any portion of the Real Estate except in
accordance with the provisions of Article 12 hereof, or (z)
assign or encumber the Rents or any portion thereof; or
<PAGE>
(x) if, subject to the provisions of Article 33 hereof,
a default under the Lease shall occur and be continuing after
applicable notice and grace periods set forth in the Lease or
Grantor shall fail to perform its material obligations under the
Lease.
19. Remedies. (a) Upon the occurrence of any Default hereunder,
Beneficiary, or by its agents or attorneys and when requested to do so by
Beneficiary, Trustee, may, without notice, presentment, demand or protest, all
of which are hereby expressly waived by Grantor to the extent permitted by
applicable law, take such action as Beneficiary deems advisable, in its sole
discretion, to protect and enforce the rights of Trustee and Beneficiary in and
to the Property, including, but without limiting the generality of the
foregoing, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such manner as Beneficiary may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary hereunder or at law or in equity:
(i) Beneficiary may declare the entire amount of the
Indebtedness immediately due and payable. Thereupon, all of the
other Obligations also shall become immediately due and payable.
(ii) Beneficiary may, without releasing Grantor from
any Obligation under this Deed of Trust or any other any Loan
Document and without waiving any Default, exercise any of its
rights and remedies under Article 15 hereof.
(iii) Beneficiary, upon notice to Grantor given in
accordance with applicable law, may elect to cause the Property
or any portion thereof to be sold in accordance with the
provisions hereof.
(iv) Beneficiary may elect to (x) institute and
maintain an action with respect to the Property under any other
Loan Document, or (y) take such other action as may be allowed at
law or in equity for the enforcement of this Deed of Trust, the
Additional Mortgages and the other Loan Documents. Beneficiary
may proceed in any such action to final judgment and execution
thereon for the whole of the Indebtedness, together with interest
thereon at the Interest Rate, from the date on which Beneficiary
shall cause the same to be declared due and payable to the date
of repayment to Beneficiary, and all costs of any such action,
including, but without limiting the generality of the foregoing,
reasonable attorneys' fees, costs and disbursements.
<PAGE>
(v) Beneficiary may, without releasing Grantor from any
Obligation under this Deed of Trust, and without waiving any
Default, enter upon and take possession of the Real Estate or any
portion thereof, either personally or by its agents, nominees,
managers or receivers or attorneys, and dispossess Grantor and
its agents and servants therefrom and, thereupon, Beneficiary may
(x) use, manage and operate the Real Estate and the business
conducted upon the Real Estate for any lawful purpose (and,
either by purchase, repairs or construction may maintain and
restore the Real Estate) and may conduct the business thereof and
(y) exercise all rights and powers of Grantor with respect to the
Property, either in the name of Grantor or otherwise, including,
but without limiting the generality of the foregoing, the right
to make, cancel, enforce or modify the Subleases, obtain and
evict sublessees, establish or change the amount of any Rents and
the manner of collection thereof and perform any acts which
Beneficiary deems proper, in its sole discretion, to protect the
security of this Deed of Trust. After deduction of all costs and
expenses of operating and managing the Real Estate, including,
but without limiting the generality of the foregoing, reasonable
attorneys' fees, costs and disbursements, administration
expenses, management fees and brokers' commissions, satisfaction
of liens on any of the Property, payment of Impositions, claims
and Insurance Premiums, invoices of persons who may have supplied
goods and services to or for the benefit of any of the Property
and all costs and expenses of the maintenance, repair,
Restoration, alteration or improvement of any of the Property,
Beneficiary may apply the Rents received by Beneficiary to
payment of the Indebtedness or performance of the Obligations.
Beneficiary may apply the Rents received by Beneficiary to the
payment of any or all of the foregoing in such order and amounts
as Beneficiary, in its sole discretion, may elect. Beneficiary
may, in its sole discretion, determine the method by which, and
extent to which, the Rents will be collected and the obligations
of the sublessees under the Subleases enforced and Beneficiary
may waive or fail to enforce any right or remedy of the sublessor
under any Sublease.
<PAGE>
(vi) Beneficiary may disaffirm and cancel any Sublease
affecting the Real Estate or any portion thereof at any time
during the period that it is exercising its remedies under this
Article 19, even though Beneficiary shall have enforced such
Sublease, collected Rents thereunder or taken any action that
might be deemed by law to constitute an affirmance of such
Sublease. Such disaffirmance shall be made by notice addressed to
the sublessee at the Real Estate or, at Beneficiary's option,
such other address of the sublessee as may be set forth in such
Sublease.
(b) If Beneficiary elects to cause the Property or any portion thereof
to be sold, Trustee shall sell the Property in accordance with the following:
(i) Trustee may cause any such sale or other
disposition to be conducted immediately or, if any grace period
is provided herein, immediately following the expiration of the
applicable grace period (or immediately upon the expiration of
any redemption or reinstatement period required by law and not
waivable by Grantor) or Trustee may delay any such sale or other
disposition for such period of time as Beneficiary deems to be in
its best interest. If the Property consists of several known
parcels or lots, Beneficiary may designate the order in which
such parcels or lots shall be sold or offered for sale. Should
Beneficiary desire that more than one such sale or other
disposition be conducted, Beneficiary may, at its option, cause
Trustee to conduct such sales simultaneously, or successively, on
the same day, or at such different days or times and in such
order, as Beneficiary may deem to be in its best interest.
<PAGE>
(ii) Upon Beneficiary's election to sell the Property
or any portion thereof, Beneficiary shall deliver to Trustee a
written declaration of default and demand for sale and a written
notice of default and election to cause the Property to be sold,
which notice Trustee shall cause to be duly filed for record.
Beneficiary shall also deposit with the Trustee this Deed of
Trust, the Indenture and all documents evidencing the
expenditures secured hereby. After the lapse of such time as may
then be required by law following the recordation of said notice
of default, and notice of sale having been given as then required
by law, Trustee, without demand on Grantor, shall sell the
Property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order
as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States, payable at time of
sale. If the Property consists of several known lots or parcels,
Beneficiary may designate the order in which such parcels shall
be sold or offered for sale. Any person, including Grantor,
Trustee or Beneficiary, may purchase at such sale. Trustee may
postpone sale of all or any portion of the Property by public
announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement at
the time fixed by the preceding postponement. If Beneficiary is
the highest bidder, Beneficiary may credit the portion of the
purchase price that would be distributable to Beneficiary against
part of the Indebtedness in lieu of paying cash. Beneficiary,
from time to time, also may rescind any such notice of Default
and notice of its election to sell the Property. The exercise by
Beneficiary of such right of postponement or rescission shall not
constitute a waiver of any Default then existing or subsequently
occurring nor impair the right of Beneficiary to give notice of
Default and notice of its election to sell the property nor
otherwise affect any provision of this Deed of Trust, the
Indenture or any other Loan Document.
(iii) Any person, including Grantor, Beneficiary or
Trustee may bid and purchase at the sale. Upon any sale, Trustee
shall execute and deliver to the purchaser or purchasers a deed
or deeds conveying the Property or the portion thereof so sold,
but without any covenant or warranty whatsoever, express or
implied.
(iv) In the event of a sale or other disposition of the
Property or any portion thereof and the execution of a deed or
other conveyance pursuant thereto, the recitals therein of facts,
such as the Default hereunder, the giving of notice of such
Default and notice of sale, demand that such sale should be made,
postponement of such sale, the terms of sale, the sale, the
purchase, payment of purchase money and other facts affecting the
regularity or validity of such sale or disposition shall be
conclusive proof of the truth of such facts and any such deed or
conveyance shall be conclusive against all persons as to all
matters and facts recited therein.
<PAGE>
(v) The proceeds of any sale, disposition or other
realization upon all or any part of the Property shall be
distributed by Beneficiary in the following order of priorities
unless otherwise provided by applicable law:
First, to the payment of the costs and expenses of such
sale, including, without limitation, all expenses of Beneficiary
and its agents including the reasonable fees, at normal rates,
and reasonable expenses of its counsel, and all expenses,
liabilities and advances made or incurred by Beneficiary in
connection therewith;
Second, to the Holders for amounts due and unpaid on
the Indebtedness for interest, ratably, without preference or
priority of any kind;
Third, to the Holders for amounts due and unpaid on the
Indebtedness for principal, ratably, without preference or
priority of any kind;
Fourth, to the Holders, pro rata, for the payment in
full of the other outstanding Obligations; and
Finally, after payment in full of all the secured
Obligations, to the payment of Grantor, or its successors or
assigns, or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(c) Further, Grantor hereby consents to the appointment of a receiver
or receivers of the Property and of all of the earnings, revenues, rents,
issues, profits and income thereof. After the occurrence of any such default or
upon the commencement of any proceedings to foreclose this Deed of Trust or to
enforce the specific performance hereof or in aid thereof or upon the
commencement of any other judicial proceeding to enforce any right of the
Trustee or Beneficiary hereunder, Beneficiary shall be entitled, as a matter of
right, if it shall so elect, without the giving of notice to any other party and
without regard to the adequacy or inadequacy of any security for the Deed of
Trust indebtedness, forthwith either before or after declaring the entire amount
of the Indebtedness to be due and payable, to the appointment of such a receiver
or receivers. Such receiver shall be authorized and empowered to enter upon and
take possession of the Property and to collect all rents and apply the same as
the court may direct, and any such receiver shall be entitled to hold, store,
use, operate, manage and control the Property and conduct the business thereof
as Beneficiary would be entitled to pursuant to the provisions of this Deed of
Trust. All fees and expenses of such receiver shall be added to the amounts
secured by this Deed of Trust. Beneficiary shall be liable to account only for
such rents actually received by Beneficiary. Notwithstanding the appointment of
any receiver or other custodian or trustee of Grantor, or of any of the
Property, or any other property of Grantor, or any part thereof, Beneficiary
shall be entitled to retain possession and control of any property at the time
held by, or payable or deliverable under the terms of this Deed of Trust to,
Beneficiary.
<PAGE>
(d) The remedies and rights granted to Beneficiary and Trustee
hereunder are cumulative and are not in lieu of, but are in addition to, and
shall not be affected by the exercise of, any other remedy or right available to
Beneficiary or Trustee whether now or hereafter existing either at law or in
equity or under this Deed of Trust or any other Loan Document.
(e) Except as otherwise provided herein, any sale of the Property
pursuant to this Deed of Trust, without further notice, shall create the
relation of landlord and tenant at sufferance between the purchaser and Grantor
or any person holding possession of the Real Estate through Grantor, and upon
failure of Grantor or such person to surrender possession thereof immediately,
Grantor, or such person may be removed by a writ of possession of the purchaser,
either in the Superior Court having venue or in any other court hereafter having
venue.
20. Security Agreement under Uniform Commercial Code. It is the intention
of Grantor and Beneficiary that this Deed of Trust shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code of the State in
which the Property is located and Beneficiary is hereby granted a security
interest in any and all of the Property which may or might now or hereafter be
or be deemed to be personal property, fixtures or property other than real
property. Notwithstanding the filing of a financing statement covering any of
the Property in the records normally pertaining to personal property, all of the
Property, for all purposes and in all proceedings, legal or equitable, shall be
regarded, at Beneficiary's option (to the extent permitted by law), as part of
the Real Estate whether or not any such item is physically attached to the Real
Estate or serial numbers are used for the better identification of certain
items. The mention in any such financing statement of any of the Property shall
never be construed in any way as derogating from or impairing this declaration
and hereby stated intention of Grantor, Trustee and Beneficiary that such
mention in the financing statement is hereby declared to be for the protection
of Beneficiary in the event any court shall at any time hold that notice of the
priority of this Deed of Trust, to be effective against any third party,
including the Federal government or any authority or agency thereof, must be
filed in the Uniform Commercial Code records. Grantor agrees to execute, as
debtor, such financing statements as Beneficiary may now or hereafter reasonably
request in order that such security interest or interests may be perfected
pursuant to such laws. Pursuant to the provisions of the Uniform Commercial
Code, Grantor hereby authorizes Trustee and Beneficiary, without the signature
of Grantor, to execute and file financing and continuation statements if
Beneficiary shall determine, in its sole discretion, that such financing or
continuation statements are necessary or advisable in order to preserve or
perfect its security interest in the Fixtures covered by this Deed of Trust, and
Grantor shall pay to Beneficiary, on demand, any expenses incurred by Trustee
and Beneficiary in connection with the preparation, execution and filing of such
statements that may be filed by Trustee or Beneficiary.
<PAGE>
Upon the occurrence of any Default, Beneficiary shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code (the
"Code") of the State of California and specifically the right to direct notice
and collections of any obligation owing to grantors by any lessee. In addition
to its rights to foreclose this Deed of Trust, Beneficiary shall have the right
to sell the personal property or any part thereof, or any further, or
additional, or substituted personal property, at one or more times, and from
time to time, at public sale or sales or at private sale or sales,on such terms
as to cash or credit, or partly for cash and partly on credit, as Beneficiary
may deem proper. Beneficiary shall have the right to become the purchaser at any
such public sale or sales, free and clear of any and all claims, rights or
equity of redemption in Grantor, all of which are hereby waived and released.
Grantor shall not be credited with the amount of any part of such purchase
price, unless, until and only to the extent that (a) such payment is actually
received in cash or (b) Beneficiary is the successful bidder. Notice of public
sale, if given, shall be sufficiently given, for all purposes, if published not
less than seven (7) days prior to any sale, in any newspaper of general
circulation distributed in the city in which the property to be sold is located
or as otherwise required by the Code. The net proceeds of any sale of the
personal property which may remain after the deduction of all costs, fees and
expenses incurred in connection therewith, including, but not limited to, all
advertising expenses, broker's or brokerage commissions, documentary stamps,
recording fees, foreclosure costs, stamp taxes and counsel fees, shall be
credited by Beneficiary against the liabilities, obligations and indebtedness of
Grantor to Beneficiary secured by this Deed of Trust and evidenced by the
Indebtedness. Any portion of the personal property which may remain unsold after
the full payment, satisfaction and discharge of all of the liabilities,
obligations and indebtedness of Grantor to Beneficiary shall be returned to the
respective parties which delivered the same to Beneficiary. If at any time
Grantor or any other party shall become entitled to the return of any of the
personal property hereunder, any transfer or assignment thereof by Beneficiary
shall be, and shall recite that the same is, made wholly without representation
or warranty whatsoever by, or recourse whatsoever against Beneficiary.
<PAGE>
21. Additional Representations and Warranties. Grantor represents and
warrants that: (a) Grantor is a corporation duly organized and validly existing
and in good standing under the laws of the State of Indiana; (b) Grantor is
qualified to do business in the State in which the Property is located; (c)
Grantor has the requisite power and lawful authority to execute and deliver this
Deed of Trust, the Indenture and the other Loan Documents executed and delivered
by it and to perform the Obligations; (d) the execution and delivery of this
Deed of Trust, the Indenture and the other Loan Documents by Grantor and
performance of its obligations under this Deed of Trust, the Indenture and the
other Loan Documents will not result in the Grantor being in default under any
provision of its Certificate of Incorporation or By-Laws or of any mortgage,
document, instrument, deed of trust, credit or other agreement to which it is a
party or by which its assets are bound; (e) Grantor has the requisite power and
lawful authority to encumber the Property in the manner herein set forth; (f)
the Board of Directors of Grantor has duly authorized the execution and delivery
of this Deed of Trust, the Indenture and the other Loan Documents and there is
no provision in Grantor's Certificate of Incorporation or By-Laws requiring any
other approvals or consents for the execution and delivery of this Deed of
Trust, the Indenture and the other Loan Documents; (g) on the date hereof, no
portion of the Buildings or the Fixtures have been damaged, destroyed or injured
by fire or other casualty which is not now fully restored; (h) Grantor has all
necessary licenses, authorizations, registrations and approvals to own, use,
occupy and operate the Real Estate and has full power and authority to carry on
its business at the Real Estate as currently conducted and has not received any
notice of any violation of any Legal Requirement; (i) as of the date hereof,
Grantor has not received any notice of any Taking of the Property or any portion
thereof and Grantor has no knowledge that any such Taking is contemplated; (j)
Grantor is a business and commercial organization, and the transaction reflected
in, and effectuated by, the Loan Documents is made solely to acquire or carry on
a business and commercial enterprise; and (k) there are no Subleases affecting
the Real Estate or any portion thereof except for those Subleases referred to in
Exhibit B hereof.
<PAGE>
22. No Waivers, Etc. A failure by Trustee or Beneficiary to insist upon the
strict performance by Grantor of any of the terms and provisions of this Deed of
Trust shall not be deemed to be a waiver of any of the terms, covenants,
conditions and provisions hereof and Trustee and Beneficiary, notwithstanding
any such failure, shall have the right thereafter to insist upon the strict
performance by Grantor of any and all of the terms, covenants, conditions and
provisions of this Deed of Trust to be performed by Grantor. No delay or
omission of Trustee or Beneficiary in the excuse of any right or power occurring
upon any Default shall impair such right or power or shall be construed to be a
waiver thereof or acquiescence therein and every right, power and/or remedy
granted by this Deed of Trust to Trustee and/or Beneficiary may be exercised
from time to time and as often as may be deemed expedient by Trustee or
Beneficiary.
Without affecting the personal liability of any person, including Trustor
(other than any person released pursuant hereto), for the payment of the
indebtedness secured hereby, and without affecting the lien of this Deed of
Trust for the full amount of the indebtedness remaining unpaid upon any property
not reconveyed pursuant hereto, Beneficiary and Trustee are respectively
authorized and empowered as follows: Beneficiary may, at any time and from time
to time, either before or after the expiration of the Indenture, and without
notice: (a) release any person liable for the payment of any of the
indebtedness, (b) make any agreement extending the time or otherwise altering
the terms of payment of any of the indebtedness, (c) accept additional security
therefor of any kind and (d) release any property, real or personal, securing
the indebtedness.
23. Trust Funds. (a) All deposits made as security under any Subleases
shall be treated as trust funds, shall not be commingled with any other funds of
Grantor and shall be held in accordance with the provisions of any other
applicable Legal Requirements. Within ten (10) days after request by
Beneficiary, Grantor shall furnish Beneficiary with evidence, satisfactory to
Beneficiary, in its sole discretion, of compliance with this Paragraph 23(b),
together with a certified statement of the amount of all of the security
deposited by sublessees and copies of all Subleases not theretofore delivered to
Beneficiary.
(b) On and after the occurrence of a Default, Grantor shall pay all
rents, issues and profits thereafter received by Grantor from the Property to
Beneficiary and to the extent not paid shall hold such amounts as trust funds
for the benefit of Beneficiary and such rent, issues and profits shall be deemed
"cash collateral" of Beneficiary under Title 11 of the United States Code.
24. Additional Rights. The holder of any subordinate lien on the Property
shall have no right to terminate any Sublease whether or not such Sublease is
subordinate to this Deed of Trust.
<PAGE>
25. Waivers by Grantor. (a) Grantor hereby waives all errors and
imperfections in any proceedings instituted by Trustee or Beneficiary under this
Deed of Trust, the Indenture or any other Loan Document and all benefit of any
present or future statute of limitations or any other present or future statute,
law, stay, moratorium, appraisal or valuation law, regulation or judicial
decision which, nor shall Grantor at any time insist upon or plead, or in any
manner whatsoever, claim or take any benefit or advantage of any such statute,
law, stay, moratorium, regulation or judicial decision which (i) provides for
the valuation or appraisal of the Property prior to any sale or sales thereof
which may be made pursuant to any provisions herein or pursuant to any decree,
judgment or order of any court of competent jurisdiction, (ii) exempts any of
the Property or any other property, real or personal, or any part of the
proceeds arising from any sale thereof from attachment, levy or sale under
execution, (iii) provides for any stay of execution, moratorium, marshalling of
assets, exemption from civil process, redemption or extension of time for
payment, (iv) requires Trustee or Beneficiary to institute proceedings prior to
any sale of the Property or prior to exercising any other remedy afforded
Trustee or Beneficiary hereunder in the event of a Default, (v) affects any of
the terms, covenants, conditions or provisions of this Deed of Trust, or (vi)
conflicts with or may affect, in a manner which may be adverse to Trustee or
Beneficiary, any provision, covenant, condition or term of this Deed of Trust,
the Indenture or any other Loan Document, nor shall Grantor at any time after
any sale or sales of the Property pursuant to any provision herein claim or
exercise any right under any present or future statute, law, stay, moratorium,
regulation or judicial decision to redeem the Property or the portion thereof so
sold.
(b) Grantor hereby waives the right, if any, to require any sale to be
made in parcels, or the right, if any, to select parcels to be sold, and there
shall be no requirement for marshalling of assets. Grantor hereby waives any
rights it may have under applicable law relating to the prohibition of obtaining
a deficiency judgment by Beneficiary against Grantor.
(c) GRANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY.
26. Failure to Consent. If Grantor shall seek the approval by, or the
consent of, either Beneficiary or Trustee hereunder or under any other Loan
Document, and either Beneficiary or Trustee shall fail or refuse to give such
consent or approval, Grantor shall not be entitled to any damages for any
withholding or delay of such consent by either Beneficiary or Trustee, it being
intended that Grantor's sole remedy shall be to bring an action for an
injunction or specific performance, which remedy of an injunction or specific
performance shall be available only in those cases in which either Beneficiary
or Trustee has expressly agreed hereunder or under any other Loan Document not
to unreasonably withhold or delay its consent or approval. Beneficiary agrees
that, when asked for approval or consent by Grantor, Beneficiary shall act in a
manner reasonably consistent with the actions of other institutional lenders
when asked for approval or consent in transactions of the type described in the
Loan Documents.
<PAGE>
27. No joint Venture or Partnership. Grantor and Beneficiary intend that
the relationship created hereunder be solely that of grantor and beneficiary or
borrower and lender, as the case may be. Nothing herein is intended to create a
joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Grantor and Beneficiary nor to grant Beneficiary any interest in the
Property other than that of beneficiary or lender.
28. Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon either Grantor, Trustee or Beneficiary, or whenever
either Grantor, Trustee or Beneficiary shall desire to give or serve upon the
other any such communication with respect to this Deed of Trust or the Property,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
(a) If to Beneficiary,
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust - Trustee Administration
With a copy to
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10004
Attention: Douglas R. Davis, Esq.
<PAGE>
(b) If to Trustee,
Chicago Title Company
925 B Street
San Diego, California 92101
Attention: General Counsel; and
(c) If to Grantor,
Anacomp, Inc.
11550 North Meridian Street
Carmel, Indiana 46032
Attention: Vice President, Real Estate
With a copy to
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Real Estate Managing Partner
or to such other address as Grantor, Trustee or Beneficiary may substitute by
notice given as herein provided. Every notice, demand, request, consent,
approval, declaration or other communication hereunder shall be deemed to have
been duly given or served on the date on which personally delivered, with
receipt acknowledged, or three (3) days after the same shall have been deposited
with the United States mails. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to the persons designated herein to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
29. Inconsistency with the Indenture. If there shall be any inconsistencies
between the terms, covenants, conditions and provisions set forth in this Deed
of Trust and the terms, covenants, conditions and provisions set forth in the
Indenture, then, unless this Deed of Trust expressly provides otherwise, the
terms, covenants, conditions and provisions of the Indenture shall prevail.
<PAGE>
30. Substitution or Resignation of Trustee. (a) Beneficiary may, without
notice or cause and in Beneficiary's sole discretion, substitute a successor or
successors to any Trustee named herein or acting hereunder to execute this Deed
of Trust or may fill a vacancy in the position of Trustee hereunder. Upon such
appointment, and without conveyance to the successor Trustee, the latter shall
be vested with all title, powers and duties conferred upon any Trustee herein
named or acting hereunder. Each such appointment and substitution shall be made
by written instrument executed and acknowledged by Beneficiary, containing
reference to this Deed of Trust and its place of record, which, when recorded in
the office in which this Deed of Trust is recorded, shall be conclusive proof of
the proper appointment of such successor Trustee.
(a) Trustee may resign by written instrument executed by Trustee,
containing reference to this Deed of Trust and its place of record, which, when
recorded in the office in which this Deed of Trust is recorded, and when
delivered to Beneficiary in accordance with Article 26 hereof, shall be
conclusive proof of the resignation of Trustee. Upon such resignation,
Beneficiary may appoint a successor Trustee in accordance with Paragraph 28(a)
hereof.
31. Conveyance by Trustee/Derfeasance. Upon receipt by Trustee of written
notice from Beneficiary that the Indebtedness shall have been fully paid
pursuant to the terms hereof and the other Loan Documents and the Obligations
fully performed in accordance with the provisions hereof and the other Loan
Documents, Trustee shall reconvey the Property, without warranty, to Grantor or
such person or persons lawfully entitled thereto.
32. No Modification; Binding Obligations. This Deed of Trust may not be
modified, amended, discharged or waived in whole or in part except by an
agreement in writing signed by Grantor and Beneficiary. The covenants, grants,
terms, agreements, provisions and conditions of this Deed of Trust shall run
with the Land and shall bind Grantor and the heirs, distributees, personal
representatives, successors and assigns of Grantor and all present and
subsequent owners, encumbrancers, lessees and sublessees of any of the Property
and shall inure to the benefit of Beneficiary and its respective successors,
assigns and endorsees.
33. Leasehold Provisions. (a) Grantor hereby covenants, warrants and
represents as follows:
<PAGE>
(i) the Lease is in full force and effect, unmodified
by any writing or otherwise except as provided in Exhibit D;
(ii) all rent, additional rent and/or other charges
reserved in or payable under the Lease have been paid to the
extent that they are payable to the date hereof;
(iii) Grantor enjoys the quiet and peaceful possession
of the Leasehold Estate;
(iv) Grantor has not delivered or received any notices
of default under the Lease and is not in default under any of the
terms of the Lease and there are no circumstances which, with the
passage of time or the giving of notice or both, would constitute
a default under the Lease;
(v) the lessor under the Lease is not in default under
any of the terms of the Lease on its part to be observed or
performed;
(vi) Grantor has delivered to Beneficiary a true,
accurate and complete copy of the Lease;
(vii) Grantor promptly shall pay the rent and all other
sums and charges mentioned in, and payable under, the Lease;
(viii) Grantor promptly shall perform and observe all
of the terms, covenants and conditions required to be performed
and observed by the lessee under the Lease, the breach of which
could permit any party to the Lease to validly terminate the
Lease (including, but without limiting the generality of the
foregoing, any payment obligations), shall do all things
necessary to preserve and to keep unimpaired its rights under the
Lease, shall not waive, excuse or discharge any of the
obligations of the lessor under the Lease without Beneficiary's
prior written consent in each instance and shall diligently and
continuously enforce the obligations of the lessor under the
Lease;
(ix) Grantor shall not do, permit or suffer any event
or omission as a result of which there could occur a default
under the Lease or any event which, with the giving of notice or
the passage or time, or both, would constitute a default under
the Lease which could permit any party to the Lease to validly
terminate the Lease (including, but without limiting the
generality of the foregoing, a default in any payment
obligation);
<PAGE>
(x) Grantor shall not cancel, terminate, surrender,
modify or amend or in any way alter or permit the alteration of
any of the provisions of the Lease or agree to any termination,
amendment, modification or surrender of the Lease without
Beneficiary's prior written consent in each instance;
(xi) Grantor shall deliver to Beneficiary copies of any
notice of default by any party under the Lease, or of any notice
from the lessor under the Lease of its intention to terminate the
Lease or to re-enter and take possession of the Property,
immediately upon delivery or receipt of such notice, as the case
may be;
(xii) Grantor shall promptly furnish to Beneficiary
copies of such information and evidence as Beneficiary may
request concerning Grantor's due observance, performance and
compliance with the terms, covenants and conditions of the Lease;
(xiii) Grantor shall not consent to the subordination
of the Lease to any mortgage of the fee interest in the Property;
(xiv) any default under the Lease or any failure by
Grantor perform its obligations under the Lease shall constitute
a Default hereunder; and
(xv) Grantor, at its sole cost and expense, shall
execute and deliver to Beneficiary, within five (5) days after
request, such documents, instruments or agreements as may be
required to permit Beneficiary to cure any default under the
Lease.
(b) In the event of default by Grantor in the performance of any of
its obligations under the Lease, including, but without limiting the generality
of the foregoing, any default in the payment of any sums payable thereunder,
then, in each and every case, Beneficiary may, at its option, cause the default
or defaults to be remedied and otherwise exercise any and all of the rights of
Grantor thereunder in the name of and on behalf of Grantor. Grantor shall, on
demand, reimburse Beneficiary for all advances made and expenses incurred by
Beneficiary in curing any such default (including, without limiting the
generality of the foregoing, reasonable attorneys' fees and disbursements),
together with interest thereon computed at the Interest Rate from the date that
such advance is made, to and including the date the same is paid to Beneficiary.
<PAGE>
(c) Grantor shall give Beneficiary notice of its intention to exercise
each and every option, if any, to extend the term of the Lease, at least thirty
(30) days prior to the expiration of the time to exercise such option under the
terms thereof. If Grantor intends to extend the term of the Lease, it shall
deliver to Beneficiary, with the notice of such decision, a copy of the notice
of extension delivered to the lessor thereunder, together with the terms and
conditions of such extension.
(d) Grantor shall obtain and deliver to Beneficiary within twenty (20)
days after written demand by Beneficiary, an estoppel certificate from the
lessor under the Lease setting forth, to the extent provided for in the Lease,
(i) the name of the lessee and the lessor thereunder, (ii) that the Lease is in
full force and effect and has not been modified or, if it has been modified, the
date of each modification (together with copies of each such modification),
(iii) the basic rent payable under the Lease, (iv) the date to which all rental
charges have been paid by the lessee under the Lease, (v) whether a notice of
default has been received by the lessor under the Lease which has not been
cured, and if such notice has been received, the date it was received and the
nature of the default, (vi) whether there are any alleged defaults of the lessee
under the Lease and, if there are, setting forth the nature thereof in
reasonable detail, and (vii) if the lessee under the Lease shall be in default,
the default.
(e) Anything contained herein to the contrary notwithstanding, this
Deed of Trust shall not constitute an assignment of the Lease within the meaning
of any provision thereof prohibiting its assignment and Beneficiary shall have
no liability or obligation thereunder by reason of its acceptance of this Deed
of Trust. Beneficiary shall be liable for the obligations of the lessee arising
under the Lease for only that period of time which Beneficiary is in possession
of the Property or has acquired, by foreclosure or otherwise, and is holding all
of Grantor's right, title and interest therein.
<PAGE>
(f) It is hereby agreed that the fee title and Leasehold Estate shall
not merge but shall always be kept separate and distinct, notwithstanding the
union of said estates in either the lessor under the Lease, Grantor or a third
party, whether by purchase or otherwise. If Grantor shall acquire fee title to
the property leased to Grantor, or any other estate, title or interest in the
property demised under the Lease, or any portion thereof, then, immediately upon
Grantor's acquisition thereof, this Deed of Trust automatically shall spread to
cover Grantor's interest in such leased property on the same terms, covenants
and conditions as set forth herein. Upon such acquisition, Grantor, at its sole
cost and expense, shall deliver to Beneficiary an ALTA Form B Mortgagee Title
Insurance Policy issued by a reputable national title insurance company chosen
by Beneficiary, insuring that this Deed of Trust, as so spread to cover
Grantor's interest in such leased property, is a valid first lien on Grantor's
interest therein, subject only to the Permitted Encumbrances. It is the
intention of Grantor and Beneficiary that no documents, instruments or
agreements shall be necessary to confirm the foregoing spread of this Deed of
Trust to cover Grantor's interest in such leased property, as aforesaid, and
that such spreader shall occur automatically upon the consummation of Grantor's
acquisition of such estate, title or interest to such leased property.
Notwithstanding the foregoing, Grantor shall make, execute, acknowledge and
deliver to Beneficiary or so cause to be made, executed, acknowledged and
delivered to Beneficiary, in form satisfactory to Beneficiary, all such further
or other documents, instruments, agreements or assurances as may be required by
Beneficiary to confirm the foregoing spread of this Deed of Trust to cover
Grantor's interest in such leased property. Grantor shall pay all expenses
incurred by Beneficiary in connection with the preparation, execution,
acknowledgement, delivery and/or recording of any such documents, including but
without limiting the generality of the foregoing, all filing, registration and
recording fees and charges, documentary stamps, mortgage taxes, intangible
taxes, and reasonable attorneys' fees, costs and disbursements.
(g) Notwithstanding anything to the contrary contained herein, in the
event of a conflict between the Lease and this Deed of Trust, Beneficiary agrees
that is will not enforce the provisions of this Deed of Trust in a manner which
shall cause a termination of the Lease; provided, however, that nothing
contained herein shall be deemed to be a waiver of any of Beneficiary's rights
hereunder or shall act to defeat the benefits to Beneficiary of this Deed of
Trust, including, without limitation, the priority of the lien granted by this
Deed of Trust and Beneficiary's rights to receive timely payment of the
Indebtedness secured hereby.]
<PAGE>
34. Miscellaneous. The Article headings in this Deed of Trust are used only
for convenience and are not part of this Deed of Trust and are not to be used in
determining the intent of the parties or otherwise in interpreting this Deed of
Trust. As used in this Deed of Trust, the singular shall include the plural as
the context requires and the following words and phrases shall have the
following meanings: (a) "provisions" shall mean "provisions, terms, covenants
and/or conditions"; (b) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage and/or deed of trust"; (c) "obligation" shall mean
"obligation, duty, covenant and/or condition"; (d) "any of the Property" shall
mean "the Property or any portion thereof or interest therein"; (e) "Person"
shall mean "any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, institution,
public benefit corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, but without limiting the
generality of the foregoing, any instrumentality division, agency, body or
department thereof)"; (f) "Stock" shall mean "all shares, options, interests,
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including, but
without limiting the generality of the foregoing, common stock, preferred stock,
and warrants or options for any of the foregoing"; and (g) "Subsidiary" shall
mean, with respect to any Person, "any corporation of which an aggregate or more
that fifty percent (50%) of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, Stock of any other class or classes of such corporation
shall have or may have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by such Person and/or
more Subsidiaries of such Person." Any act which Trustee or Beneficiary is
permitted to perform under this Deed of Trust, the Indenture or any other Loan
Document may be performed at any time and from time to time by Trustee or
Beneficiary or by any person or entity designated by Trustee or Beneficiary, as
the case may be. Any act which is prohibited to Grantor under this Deed of
Trust, the Indenture or any other Loan Document is also prohibited to all
lessees of any of the Property. Each appointment of Beneficiary as
attorney-in-fact for Grantor under this Deed of Trust, the Indenture or any
other Loan Document shall be irrevocable and coupled with an interest.
Beneficiary shall have the right to refuse to grant its consent, approval or
acceptance or to indicate its satisfaction whenever such consent, approval,
acceptance or satisfaction shall be required under any of the Loan Documents.
<PAGE>
35. Enforceability. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State in which the Property is located
without regard to principles of conflicts of laws, except that the laws of the
State of New York (without regard to principles of conflicts of laws) shall
govern the resolution of issues arising under the Indenture to the extent that
such resolution is necessary to the interpretation of this Deed of Trust.
Whenever possible, each provision of this Deed of Trust shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Deed of Trust shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
Deed of Trust. Nothing in this Deed of Trust or in any other Loan Documents
shall require Grantor to pay, or Beneficiary to accept, interest in an amount
which would subject Beneficiary to penalty under applicable law. In the event
that the payment of any interest due hereunder or under any of the other Loan
Documents or a payment which is deemed interest, exceeds the maximum amount
payable as interest under the applicable usury laws, such excess amount shall be
applied to the reduction of the Indebtedness, and upon payment in full of the
Indebtedness, shall be applied to the performance of the Obligations, and upon
performance in full of the Obligations, shall be deemed to be a payment made by
mistake and shall be refunded to Grantor.
36. Receipt of Copy. Grantor acknowledges that it has received a true copy
of this Deed of Trust.
37. Additional Provisions. It shall be lawful for the Trustee, or
Beneficiary, at its election, upon the occurrence of a Default, to commerce an
action for the foreclosure of this Deed of Trust and to proceed thereon to
judgment and execution for the recovery of all sums payable by Grantor pursuant
to the terms of this Deed of Trust without further stay, any law, usage or
custom to the contrary notwithstanding.
Notwithstanding the appointment of any receiver, liquidator or trustee of
Grantor, or of any its Property, or of the Property, or any part thereof, the
Trustee shall be entitled to retain possession and control of all property now
or hereafter held under this Deed of Trust.
Grantor hereby waives and relinquishes unto, and in favor of, Beneficiary,
all benefit under all laws, now in effect or hereafter passed, to relieve
Grantor in any manner from the obligations assumed and the obligation for which
this Deed of Trust is security or to reduce the amount of the said obligation to
any greater extent than the amount actually paid for the Property, in any
judicial proceedings upon the said obligation, or upon this Deed of Trust.
<PAGE>
If Grantor shall default in the payment of any sums due pursuant to the
terms of the Loan Documents (as that terms is defined in the or this Deed of
Trust, such default shall be, and be deemed to be, an attempt by Grantor to
avoid the prepayment premium payable pursuant to the terms of the Loan Documents
and upon such default Beneficiary shall be entitled to collect such prepayment
premium from Grantor with the same effect as if Grantor had voluntarily elected
to prepay the principal sum evidenced by the Loan Documents.
Neither Grantor nor any other person now or hereafter obligated for payment
for all or any part of the indebtedness secured hereby shall be relieved of such
obligation by reason of the failure of Beneficiary to comply with any request of
Grantor or of any other person so obligated to take action to foreclose on this
Deed of Trust or otherwise enforce any provisions hereof or of the under the
Loan Documents or by reason of the release, regardless of consideration, of all
or any part of the security held for the indebtedness secured hereby, or by
reason of any agreement or stipulation between any subsequent owner of the
Property and Beneficiary extending the time of payment or modifying the terms
hereof without first having obtained the consent of Grantor or such other
person; and in the latter event Grantor and all other such persons shall
continue to be liable to make payment according to the terms of any such
extension or modification agreement, unless expressly released and discharged in
writing by Beneficiary.
Grantor shall pay to Beneficiary the maximum amount as may from time to
time be permitted by law for furnishing in connection with the obligations
secured hereby, each statement pursuant to any statute at the time then in
force. Grantor shall pay Beneficiary's and Trustee's fees, charges and expenses
for any other statement, information or services furnished by Beneficiary or
Trustee in connection with the obligations secured hereby. Said services may
include, but shall not be limited to, the processing by Beneficiary or Trustee,
or both, of assumption, substitutions, modifications, extensions, renewals,
subordinations, rescissions, changes of owner, recordation of map, plat or
record of survey, grants of easements, and full and partial reconveyances, and
the obtaining by Beneficiary of any policies of insurance pursuant to any of the
provisions contained in this Deed of Trust.
No offset or claim which Grantor now or may in the future have against
Beneficiary shall relieve Grantor from paying sums due or performing any other
obligation herein or secured by.
<PAGE>
To the extent that the grant to the Trustee shall be ineffective, this Deed
of Trust is a mortgage with power of sale, with Grantor being the mortgagor and
Beneficiary being the mortgagee, and Beneficiary shall be entitled to all of the
rights of the Trustee hereunder with respect to the enforcement of this
instrument and the power of sale granted hereunder.
Simultaneously with, and in addition to, the execution of this Deed of
Trust, Grantor has executed and delivered as security for the Indenture a
mortgage or deed of trust on parcels of property located in other states, which
conforms to the laws, customs and practices of the jurisdiction in which each of
such parcels is located and within which such mortgage or deed of trust is being
recorded. Grantor agrees that the occurrence of an Default hereunder, or under
any of such other mortgages or deeds of trusts, shall be an Default under each
and every one of such mortgages and deeds of trust, including this Deed of
Trust, permitting Beneficiary to proceed against any or all of the property
comprising the Property or against any other security for the Indenture in such
order as Beneficiary in its sole and absolute discretion may determine. Grantor
hereby waives, to the extent permitted by applicable law, the benefit of any
statute or decision relating to the marshalling of assets which is contrary to
the foregoing. Beneficiary shall not be compelled to release or be prevented
from foreclosing this instrument or any other instrument securing the Indenture
unless all Indebtedness evidenced by the Indenture and all items hereby secured
shall have been paid in full and Beneficiary shall not be required to accept any
part or parts of any property securing the Indenture as distinguished from the
entire whole thereof, as payment of or upon the Indenture to the extent of the
value of such part or parts, and shall not be compelled to accept or allow any
apportionment of the indebtedness evidenced by the Indenture to or among any
separate parts of said property.
IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be duly
executed and acknowledged under seal the day and year first above written.
(Corporate Seal) ANACOMP, INC., Grantor
By:___________________________
Name:
Title:
<PAGE>
STATE OF ________________)
)ss.
COUNTY OF _______________)
On _________, 199___, before me, ____________________,
personally appeared __________________________________ personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her signature
on the instrument the person or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
------------------------------
Notary Public in and for said
County and State
<PAGE>
Poway
Exhibit A
PARCELS 101, 102 AND A PORTION OF PARCEL 103 IN THE CITY OF POWAY, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, AS SHOWN AT PAGE 16320 OF PARCEL MAPS FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 10, 1990 DESCRIBED
AS FOLLOWS:
BEGINNING AT THE NORTHEASTERLY CORNER OF PARCEL 105 OF PARCEL MAP 16320
NORTH 39 DEGREES 45' 33" WEST 618.40 FEET; THENCE,
NORTH 00 DEGREES 07' 57" EAST 584.60 FEET; THENCE,
SOUTH 88 DEGREES 28' 24" EAST 290.00 FEET; THENCE,
SOUTH 82 DEGREES 46' 00" EAST 506.32 FEET; THENCE,
SOUTH 63 DEGREES 08' 00" EAST 170.54 FEET; THENCE,
NORTH 38 DEGREES 08' 00" EAST 253.23 FEET; THENCE,
SOUTH 03 DEGREES 51' 02" WEST 673.92 FEET; THENCE,
SOUTH 87 DEGREES 26' 00" WEST 482.83 FEET TO THE BEGINNING OF A TANGENT CURVE
CONCAVE SOUTHEASTERLY WITH A RADIUS OF 324.50 FEET; THENCE, ALONG SAID CURVE
CENTRAL ANGLE 60 DEGREES 48' 13" A LENGTH OF 344.37 FEET TO THE POINT OF
BEGINNING, A RADIAL TO SAID CURVE BEARS NORTH 63 DEGREES 22' 13" WEST;
EXCEPTING THEREFROM ALL MINERALS, OILS, GAS, PETROLEUM, OTHER HYDROCARBON
SUBSTANCES AND ALL UNDERGROUND WATER IN OR UNDER OR WHICH MAY BE PRODUCED FROM
SAID PROPERTY WHICH UNDERLIES A PLANE PARALLEL TO AND 500 FEET BELOW THE PRESENT
SURFACE OF SAID PROPERTY FOR THE PURPOSE OF PROSPECTING FOR, THE EXPLORATION,
DEVELOPMENT, PRODUCTION, EXTRACTION AND TAKING OF SAID MINERALS, OIL, GAS,
PETROLEUM, OTHER HYDROCARBON SUBSTANCES AND WATER FROM SAID PROPERTY BUT WITHOUT
THE RIGHT TO ENTER UPON THE SURFACE OR ANY PORTION THEREOF ABOVE SAID PLANE
PARALLEL TO AND 500 FEET BELOW THE PRESENT SURFACE OF THE SAID PROPERTY FOR ANY
PURPOSE WHATSOEVER.
<PAGE>
Exhibit B - Description of the Subleases
----------------------------------------
None
<PAGE>
Exhibit C - Permitted Encumbrances
----------------------------------
<PAGE>
EXHIBIT D
LEASEHOLD ESTATE
12365 Crosthwaite Circle, Poway, California
-------------------------------------------
A Leasehold Estate as created by that certain Lease, dated March 5, 1991,
between DAI Industrial Partnership, a California limited partnership, a
California limited partnership as Landlord, and Anacomp, Inc., an Indiana
corporation, as Tenant of which a Memorandum of Lease was recorded on August 2,
1991 as file number 91-0386554, of the Official Records of San Diego County,
which Lease has been amended by that certain unrecorded First Amendment dated
August 1, 1991, and further amended by that certain unrecorded Second Amendment
dated September 18, 1991, and further amended by that certain unrecorded Fourth
Amendment dated May 27, 1993, and further amended by that certain unrecorded
Fifth Amendment dated March 20, 1995, and as amended by an Amended Memorandum of
Lease dated March 20, 1995 and recorded March 21, 1995 as File No. 1995-116756
of Official Records and further amended by that certain Fifth Amendment dated
March 1, 1996 and recorded ______________.
FIRST DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
from
ANACOMP, INC.
Grantor
to
Benjamin Grant,
Trustee
FOR THE BENEFIT OF
THE BANK OF NEW YORK AS TRUSTEE,
Beneficiary
THE INDEBTEDNESS AND OBLIGATIONS SECURED BY
THIS INSTRUMENT MATURE NOT LATER THAN ____________, 1999.
Dated as of ____________, 1996
Record and Return to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Managing Partner - Real Estate (NC)
This instrument was prepared by the above named attorney.
<PAGE>
FIRST DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
TABLE OF CONTENTS
-----------------
Article Page
- - ------- ----
1. Warranty of Title................................................ 6
2. Payment of Indebtedness.......................................... 6
3. Requirements; Proper Care and Use................................ 7
4. Taxes on Trustee or Beneficiary.................................. 8
5. Payment of Impositions........................................... 10
6. Deposits......................................................... 11
7. Insurance........................................................ 12
8. Condemnation/Eminent Domain...................................... 18
9. Sale and Lease of the Property................................... 19
10. Discharge of Liens.............................................. 20
11. Right of Contest................................................ 20
12. Subleases....................................................... 20
13. Estoppel Certificates........................................... 23
14. Loan Document Expenses.......................................... 23
15. Beneficiary's Right to Perform.................................. 23
16. Grantor's Existence............................................. 24
17. Trustee's and Beneficiary's Costs and Expenses.................. 24
18. Defaults........................................................ 25
19. Remedies........................................................ 26
20. Security Agreement under Uniform Commercial Code................ 32
21. Additional Representations and Warranties....................... 34
22. No Waivers, Etc................................................. 34
23. Trust Funds..................................................... 35
24. Additional Rights............................................... 36
25. Waivers by Grantor.............................................. 36
26. Failure to Consent.............................................. 37
27. No Joint Venture or Partnership................................. 37
28. Notices......................................................... 37
29. Inconsistency with the Indenture................................ 39
30. Substitution or Resignation of Trustee.......................... 39
31. Release......................................................... 39
32. No Modification; Binding Obligations............................ 39
33. Miscellaneous................................................... 40
34. Enforceability.................................................. 41
35. Receipt of Copy................................................. 41
36. Additional Provisions........................................... 41
Exhibits
- - --------
Exhibit A - Description of the Land
Exhibit B - Description of the Subleases
Exhibit C - Permitted Encumbrances
<PAGE>
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153 Attn: Managing Partner - Real Estate (NC)
FIRST DEED OF TRUST,ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
-------------------------------------
THIS FIRST DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this "Deed of Trust") dated as of ----------------, 1996, by
ANACOMP, INC., an Indiana corporation, having an office at 11550 North Meridian
Street, Carmel, Indiana 46032, as trustor ("Grantor"), to Benjamin Grant, having
an address at c/o Chicago Title Insurance Company, 7616 LBJ Freeway, Dallas,
Texas 75251, as trustee ("Trustee") for the benefit of THE BANK OF NEW YORK as
Trustee for the Holders (as defined in the Indenture, hereinafter defined), a
New York banking corporation organized under the laws of New York State, as
beneficiary ("Beneficiary").
THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTION 9.313 OF THE
TEXAS UNIFORM COMMERCIAL CODE. TO THE EXTENT THE GOODS ARE FIXTURES UNDER THE
LAWS OF THE STATE OF TEXAS, THE FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE
REAL PROPERTY LOCATED IN THE COUNTY OF YOUNG, STATE OF TEXAS, MORE PARTICULARLY
DESCRIBED ON EXHIBIT A ATTACHED HERETO, COMMONLY KNOWN BY THE STREET ADDRESS:
1715 FOURTH STREET, GRAHAM, TEXAS. THE NAME OF THE RECORD OWNER OF THE REAL
PROPERTY IS ANACOMP, INC.
W I T N E S S E T H :
WHEREAS, Grantor has executed and delivered to Beneficiary that certain
Indenture, dated as of ____________, 1996 (as the same may be further amended,
modified, supplemented or extended, the "Indenture") (capitalized terms not
otherwise defined in this Deed of Trust shall have the meanings ascribed to them
in the Indenture);
WHEREAS, pursuant to the Indenture, Grantor has delivered to the Holders
its 11-5/8% Senior Secured Notes due 1999 (the "Notes");
WHEREAS, Grantor and Beneficiary intend these recitals to be a material
part of this Deed of Trust;
<PAGE>
WHEREAS, as a condition to the issuance of the Notes, the Holders have
required that Grantor enter into this Deed of Trust and grant to Beneficiary the
liens and security interests referred to herein to secure:
(a) the payment of (i) the principal amount of the Notes in the
aggregate amount of ------------------------------- ($--------------------)
pursuant to the terms and provisions of the Indenture, (ii) all interest accrued
on the Notes pursuant to the terms and provisions of the Indenture, (iii) any
and all other sums due or to become due under the Indenture, this Deed of Trust,
the Notes or any of the other Loan Documents (hereinafter defined), (iv) any
further or subsequent advances made under the Indenture, this Deed of Trust or
any of the other Loan Documents, and (v) any extensions, renewals, replacements
or modifications of the Indenture, the Notes or any of the other Loan Documents
(the items set forth in clauses (i) through (v) hereof being hereinafter
collectively referred to as the "Indebtedness"), and
(b) the performance of all of the terms, covenants, conditions,
agreements, obligations and liabilities of Grantor (collectively the
"Obligations") under (i) this Deed of Trust, (ii) the Indenture, (iii) the
Notes, (iv) the Collateral Documents (as defined in the Indenture), (v) any
deeds of trust or mortgages in addition to this Deed of Trust now or hereafter
made by Grantor to secure the Indebtedness (such additional deeds of trust and
mortgages being hereinafter collectively referred to as the "Additional
Mortgages"), (vi) any supplemental agreements, undertakings, instruments,
documents or other writings executed by Grantor as a condition to advances under
the Indenture or otherwise in connection with the Indenture, including, but
without limiting the generality of the foregoing, (vii) all chattel mortgages,
pledges, powers of attorney, consents, assignments, notices, leases and
financing statements heretofore, now or hereafter executed by or on behalf of
Grantor or any other Person (hereinafter defined) and/or delivered to
Beneficiary in connection with the Indenture or the transactions contemplated
thereby, and (viii) any extensions, renewals, replacements or modifications of
any of the foregoing (this Deed of Trust, the Indenture, the Additional
Mortgages and any other supplemental agreements, undertakings, instruments,
documents or other writings executed in connection with any of the foregoing,
together with (x) the foregoing powers of attorney, consents, assignments,
notices, leases and financing statements, (y) any guarantees of the Indebtedness
and the Obligations and (z) any deeds of trust, mortgages, security agreements
or assignments now or hereafter made to secure the Indebtedness and the
Obligations (all of the foregoing documents enumerated above in items (i)
through (viii) being hereinafter collectively referred to as the "Loan
Documents"),
<PAGE>
and in consideration of Ten Dollars ($10.00), in hand paid, the receipt and
legal sufficiency of which are hereby acknowledged, Grantor does hereby
mortgage, give, grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, hypothecate, deposit, pledge, set over and confirm
unto Trustee, and to its successors and assigns in trust, with power of sale the
following described real and other property and all substitutions for and all
replacements, reversions and remainders of such property, whether now owned or
held or hereafter acquired by Grantor (collectively the "Property"):
Grantor's fee estate in all those plots, pieces or parcels of land more
particularly described in Exhibit A annexed hereto and made a part hereof
together with the right, title and interest of Grantor, if any, in and to the
streets and in and to the land lying in the bed of any streets, roads or
avenues, open or proposed, public or private, in front of, adjoining or abutting
said land to the center line thereof, the air space and development rights
pertaining to said land and the right to use such air space and development
rights, all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging to, or in any way appertaining to, said land, all
easements now or hereafter benefitting said land and all royalties and rights
appertaining to the use and enjoyment of said land, including, but without
limiting the generality of the foregoing, all alley, vault, drainage, mineral,
water, oil, coal, gas, timber and other similar rights (collectively the
"Land");
TOGETHER with Grantor's interest in the buildings and other improvements
now or hereafter erected on the Land (the buildings and other improvements being
hereinafter collectively referred to as the "Buildings," and the Land together
with the Buildings and the Fixtures (hereinafter defined), being hereinafter
collectively referred to as the "Real Estate");
TOGETHER with all and singular the reversion or reversions, remainder or
remainders, rents, issues, profits and revenues of the Real Estate and all of
the estate, right, title, interest, property, possession, claim and demand
whatsoever, both in law and at equity, of Grantor of, in and to the Real Estate
and of, in and to every part and parcel thereof, with the appurtenances, at any
time belonging or in any way appertaining thereto;
<PAGE>
TOGETHER with all of the fixtures, systems, machinery, apparatus, equipment
and fittings of every kind and nature whatsoever and all appurtenances and
additions thereto and substitutions or replacements thereof now owned or
hereafter acquired by Grantor and now or hereafter attached or affixed to, or
constituting a part of, the Real Estate or any portion thereof (collectively the
"Fixtures"), including, but without limiting the generality of the foregoing,
all heating, electrical, mechanical, lighting, lifting, plumbing, ventilating,
air conditioning and air-cooling fixtures, systems, machinery, apparatus and
equipment, refrigerating, incinerating and power fixtures, systems, machinery,
apparatus and equipment, loading and unloading fixtures, systems, machinery,
apparatus and equipment, escalators, elevators, boilers, communication systems,
switchboards, sprinkler systems and other fire prevention and extinguishing
fixtures, systems, machinery, apparatus and equipment, and all engines, motors,
dynamos, machinery, wiring, pipes, pumps, tanks, conduits and ducts constituting
a part of any of the foregoing, it being understood and agreed that all of the
Fixtures are appropriated to the use of the Real Estate and, for the purposes of
this Deed of Trust, shall be deemed conclusively to be Real Estate and conveyed
hereby;
TOGETHER with Grantor's interest in all drainage, mineral, water, oil, gas,
timber and sewer pipes, conduits and wires, and other facilities furnishing
utility or other services and other similar rights now or hereafter benefitting
the Real Estate or any portion thereof or appertaining thereto;
TOGETHER with Grantor's right, title and interest in, to and under all
leases, subleases, underlettings, concession agreements, licenses and other
occupancy agreements which now or hereafter may affect the Real Estate or any
portion thereof and under any and all guarantees, modifications, renewals and
extensions thereof (collectively, the "Subleases"), and in and to any and all
deposits made or hereafter made as security under the Subleases, subject to the
prior legal rights under the Subleases of the sublessees making such deposits,
together with any and all of the benefits, revenues, income, rents, issues and
profits due or to become due or to which Grantor is now or hereafter may become
entitled arising out of the Subleases or the Real Estate or any portion thereof
(collectively the "Rents");
<PAGE>
TOGETHER with (a) all unearned premiums, accrued, accruing or to accrue
under any insurance policies now or hereafter obtained by Grantor and Grantor's
interest in and to all proceeds which now or hereafter may be paid in connection
with the conversion of the Property or any portion thereof into cash or
liquidated claims, together with the interest payable thereon and the right to
collect and receive the same, including, but without limiting the generality of
the foregoing, proceeds of casualty insurance, title insurance and any other
insurance now or hereafter maintained with respect to the Real Estate or in
connection with the use or operation thereof (collectively the "Insurance
Proceeds"), and (b) all awards, payments and/or other compensation, together
with the interest payable thereon and the right to collect and receive the same,
which now or hereafter may be made with respect to the Property as a result of
(i) a taking by eminent domain, condemnation or otherwise, (ii) the change of
grade of any street, road or avenue or the widening of any streets, roads or
avenues adjoining or abutting the Land, or (iii) any other injury to, or
decrease in the value of, the Property or any portion thereof (collectively the
"Awards"), in any of the foregoing circumstances described in clauses (a) or (b)
above to the extent of the entire amount of the Indebtedness outstanding as of
the date of Beneficiary's receipt of any such Insurance Proceeds or Awards,
notwithstanding that the entire amount of the Indebtedness may not then be due
and payable, and also to the extent of reasonable attorneys' fees, costs and
disbursements incurred by Trustee in connection with the collection of any such
Insurance Proceeds or Awards. Grantor hereby assigns to Trustee and Beneficiary,
and Beneficiary is hereby authorized to collect and receive, all Insurance
Proceeds and Awards and to give proper receipts and acquittances therefor and to
apply the same toward the Indebtedness as herein set forth notwithstanding that
the entire amount of the Indebtedness may not then be due and payable. Grantor
hereby agrees to make, execute and deliver, from time to time, upon demand, such
further documents, instruments or assurances as may be requested by Trustee or
Beneficiary to confirm the assignment of the Insurance Proceeds and the Awards
to Trustee, free and clear of any interest of Grantor whatsoever therein and
free and clear of any other liens, claims or encumbrances of any kind or nature
whatsoever;
TOGETHER with all right, title and interest of Grantor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Real Estate, and in each such
case, the foregoing shall be deemed a part of the Real Estate and shall become
subject to the lien of this Deed of Trust as fully and completely, and with the
same priority and effect, as though now owned by Grantor and specifically
described herein, without any further deed of trust, mortgage, conveyance,
assignment or other act by Grantor;
TOGETHER with all of Grantor's rights to further encumber the Property for
debt.
<PAGE>
TOGETHER with all goods, equipment, machinery, furniture, furnishings,
Fixtures, appliances, inventory, building materials, chattels and articles of
personal property (other than personal property which is or at any time has
become hazardous or toxic waste or waste products or hazardous substances),
including any interest therein now or at any time hereafter affixed to, attached
to or used in any way in connection with or to be incorporated at any time into
the Real Estate or placed on any part thereof wheresoever located, whether or
not attached to or incorporated in the Real Estate, together with any and all
replacements thereof, appertaining and adapted to the complete and compatible
use, enjoyment, occupancy, operation or improvement of the Real Estate.
TO HAVE AND TO HOLD the Property, and the rights and privileges hereby
deeded or intended so to be unto the Trustee and its successors and assigns for
the uses and purposes herein set forth, until the Indebtedness is fully paid and
the Obligations are fully performed in accordance with the provisions set forth
herein and in the other Loan Documents.
Grantor, for itself and its successors and assigns, further represents,
warrants, covenants and agrees with Trustee and Beneficiary as follows:
1. Warranty of Title. Grantor warrants to Trustee and Beneficiary that it
has good and indefeasible title to the Real Estate and Fixtures and has the
right to convey the same in accordance with the provisions set forth in this
Deed of Trust and that this Deed of Trust is subject only to the exceptions to
title more particularly described in Exhibit C attached hereto and made a part
hereof (collectively the "Permitted Encumbrances"). Grantor shall (a) preserve
such title and the validity and priority of the lien of this Deed of Trust and
shall forever warrant and defend the same unto Trustee and Beneficiary against
the claims of all and every person or persons, corporation or corporations and
parties whomsoever, and (b) make, execute, acknowledge and deliver all such
further or other deeds, documents, instruments or assurances and cause to be
done all such further acts and things as may at any time hereafter be required
by Trustee or Beneficiary to confirm and fully protect the lien and priority of
this Deed of Trust.
2. Payment of Indebtedness. (a) Grantor shall pay the Indebtedness at the
times and places and in the manner specified in the Indenture and shall perform
all of the Obligations in accordance with the provisions set forth herein and in
the other Loan Documents.
<PAGE>
(b) Any payment made in accordance with the terms of this Deed of
Trust by any person at any time liable for the payment of the whole or any part
of the Indebtedness, or by any subsequent owner of the Property, or by any other
person whose interest in the Property might be prejudiced in the event of a
failure to make such payment, or by any stockholder, officer or director of a
corporation or by any partner of a partnership which at any time may be liable
for such payment or may own or have such an interest in the Property shall be
deemed, as between Beneficiary and all persons who at any time may be liable as
aforesaid or may own the Property, to have been made on behalf of all such
persons.
3. Requirements; Proper Care and Use. (a) To the extent required by the
Indenture, subject to the right of Grantor to contest a Legal Requirement
(hereinafter defined) as provided in Article 11 hereof [and subject to the terms
of the Lease], Grantor promptly shall comply with, or cause to be complied with,
all present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, restrictions and requirements
(collectively "Legal Requirements") of every Governmental Authority (hereinafter
defined) having jurisdiction over Grantor or the Property or the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
Restoration (hereinafter defined) of the Real Estate, without regard to the
nature of the work to be done or the cost of performing the same, whether
foreseen or unforeseen, ordinary or extraordinary, and shall perform, or cause
to be performed, all obligations, agreements, covenants, restrictions and
conditions now or hereafter of record which may be applicable to Grantor or to
the Property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or Restoration of the Real Estate.
(b) Except as otherwise provided in the Indenture, Grantor shall (i)
not abandon the Real Estate or any portion thereof, (ii) maintain the Real
Estate and Fixtures in good repair, order and condition, (iii) promptly make all
necessary repairs, renewals, replacements, additions and improvements to the
Real Estate and Fixtures, (iv) not commit or suffer waste with respect to the
Real Estate and Fixtures, (v) refrain from impairing or diminishing the value or
integrity of the Property or the priority or security of the lien of this Deed
of Trust, (vi) not remove, demolish or materially alter any of the Real Estate
or Fixtures without the prior written consent of Beneficiary in each instance,
except that Grantor shall have the right to remove and dispose of, free of the
lien of this Deed of Trust, such Fixtures as may, from time to time, become worn
out or obsolete, provided that, simultaneously with or prior to such removal,
any such Fixtures shall be replaced with other Fixtures which shall have a value
and utility at least equal to that of the replaced Fixtures and which shall be
free of any security agreements or other liens or encumbrances of any kind or
nature whatsoever, and by such removal and replacement, Grantor shall be deemed
to have subjected such replacement Fixtures to the lien and priority of this
Deed of Trust, (vii) not make, install or permit to be made or installed, any
alterations or additions to the Real Estate if doing so would, in the sole
opinion of Beneficiary, impair to any extent the value of the Property, (viii)
not make, suffer or permit any nuisance to exist on the Real Estate or any
portion thereof, and (ix) permit Beneficiary and its agents, at all reasonable
times and without prior notice, to enter upon the Real Estate for the purpose of
inspecting and appraising the Real Estate or any portion thereof.
<PAGE>
(c) Grantor shall not by any act or omission permit any building or
other improvement located on any property which is not subject to the lien of
this Deed of Trust to rely upon the Real Estate or any portion thereof or any
interest therein to fulfill any Legal Requirement and Grantor hereby assigns to
Beneficiary any and all rights to give consent for all or any portion of the
Real Estate or any interest therein to be so used. The Real Estate is zoned as
one or more lots separate and apart from all other premises and Grantor shall
not, by any act or omission, impair the integrity of the Real Estate as such lot
or lots or initiate or join in any zoning change, private easement or any other
modification of the zoning regulating the Real Estate. Grantor shall not (i)
impose any restrictive covenants or encumbrances upon the Real Estate, execute
or file any subdivision plot affecting the Real Estate or consent to the
annexation of the Real Estate to any municipality or (ii) permit or suffer the
Real Estate to be used by the public or any Person in such manner as might make
possible a claim of adverse usage or possession or of any implied deduction or
easement. Any act or omission by Grantor which would result in a violation of
any of the provisions of this Article 3 shall be null and void.
4. Taxes on Trustee or Beneficiary. (a) If the United States of America,
the State in which the Real Estate is located or any political subdivision
thereof or any city, town, county or municipality in which the Real Estate is
located or any agency, department, bureau, board, commission or instrumentality
of any of the foregoing now existing or hereafter created (collectively
"Governmental Authorities") shall levy, assess or charge any tax, assessment,
fee or imposition upon this Deed of Trust or any other Loan Document, the
Indebtedness, the interest of Trustee or Beneficiary in the Property, or Trustee
or Beneficiary by reason of this Deed of Trust or any other Loan Document, the
Indebtedness or Trustee's or Beneficiary's interest in the Property
(individually a "Tax", and collectively "Taxes") (excepting therefrom any income
tax on payments of interest made under the Indenture), Grantor shall pay all
such Taxes to, for, or on account of, Trustee or Beneficiary, as the case may
be, as they become due and payable and, on demand, shall furnish proof of such
payment to Beneficiary. If Grantor shall fail to pay any such Tax then
Mortgagee, at its option and without notice, may pay such Tax and, in such
event, the amount so paid (i) shall be deemed to be Indebtedness, (ii) shall be
a lien on the Property prior to any right or title to, interest in, or claim
upon, the Property subordinate to the lien of this Deed of Trust, and (iii)
immediately shall be due and payable, on demand, together with interest thereon
at the rate of interest then payable under the Indenture including, in
calculating such rate of interest, any additional interest which may be imposed
under the Indenture by reason of any default thereunder (such rate of interest
being hereinafter referred to as the "Interest Rate"), from the date of any such
payment by Beneficiary to the date of repayment to Beneficiary. In the event of
the passage of any law or regulation permitting, authorizing or requiring any
such Tax to be levied, assessed or charged, which law or regulation, in the sole
opinion of Beneficiary, may prohibit Grantor from paying any Taxes, to, for or
on account of, Trustee or Beneficiary, or which may make such payment by Grantor
result in the imposition of interest exceeding the maximum rate of interest then
permitted by law, then, Beneficiary may declare the entire amount of the
Indebtedness immediately due and payable.
<PAGE>
(b) If any Governmental Authority shall at any time require revenue,
documentary or similar stamps to be affixed to this Deed of Trust or any other
Loan Document or shall require the payment of any Taxes with respect to the
ownership or recording of this Deed of Trust or any other Loan Document,
Grantor, upon demand, shall pay for such stamps and/or such Taxes in the
required amount and shall deliver the same to Beneficiary, together with a copy
of the receipted bill therefor. If Grantor shall fail to pay for any such
stamps, then, Beneficiary, at its option and without notice, may pay for the
same and, in such event, the amount so paid (i) shall be deemed to be
Indebtedness, (ii) shall be a lien on the Property prior to any right or title
to, or interest in, or claim upon, the Property subordinate to the lien of this
Deed of Trust, and (iii) immediately shall be due and payable, on demand,
together with interest thereon at the Interest Rate from the date of any such
payment by Beneficiary to the date of repayment to Beneficiary. Grantor shall
indemnify Trustee and Beneficiary for, and shall hold Trustee and Beneficiary
harmless from and against, any and all liability which Trustee and Beneficiary
may incur on account of such revenue, documentary or other similar stamps or by
reason of any Taxes referred to in Paragraphs 4(a) and 4(c) hereof whether such
liability arises before or after payment of the Indebtedness and whether or not
the lien of this Deed of Trust shall have been released.
(c) In the event of the passage, after the date of this Deed of Trust, of
any law of the jurisdiction in which the Real Estate is located which shall
deduct from the value of the Property, for purposes of taxation, any lien
thereon or shall change in any way the laws for the taxation of deeds of trust
or debts secured by deeds of trust for State or local purposes or the manner of
the collection of any such taxes and shall impose any Tax, either directly or
indirectly, on this Deed of Trust or any other Loan Document, then, Beneficiary
may declare the entire amount of the Indebtedness immediately due and payable;
provided, however, that such election shall be ineffective if Grantor is exempt
from payment of such Tax or, if not exempt from payment of such Tax or, if
Grantor shall be permitted by law to pay the whole of such Tax in addition to
all other payments required hereunder and under the other Loan Documents and if
Grantor shall pay such Taxes when the same shall be due and payable and shall
agree in writing to pay such Taxes when thereafter levied or assessed against
the Property.
<PAGE>
5. Payment of Impositions. (a) Subject to the provisions of Article 11
hereof, not later than the date on which payment of the same shall be due, that
is, the day before the date on which any fine, penalty, interest, late charge or
loss may be added thereto or imposed by reason of the non-payment thereof,
Grantor shall pay and discharge all Taxes (including, but without limiting the
generality of the foregoing, all real property taxes and assessments, personal
property taxes, income, franchise, withholding, profits and gross receipts
taxes), charges for any easement or agreement maintained for the benefit of the
Property or any portion thereof, general and special assessments and levies,
permit, inspection and license fees, water and sewer rents and charges and any
other charges of every kind and nature whatsoever, foreseen or unforeseen,
ordinary or extraordinary, public or private, which, at any time, are imposed
upon or levied or assessed against Grantor or the Property or any portion
thereof, or which arise with respect to, or in connection with, the use, manner
of use, occupancy, possession, operation, maintenance, alteration, repair or
Restoration of the Real Estate or any portion thereof, together with any
penalties, interest or late charges which may be imposed in connection with any
of the foregoing (all of the foregoing taxes, assessments, levies and other
charges, together with such interest, penalties and late charges, being
hereinafter collectively referred to as "Impositions"). If, however any Legal
Requirement shall allow that any Imposition may, at Grantor's option, be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Grantor may exercise the option to pay such Imposition in such
installments, and, in such event, Grantor shall be responsible for the payment
of all such installments, together with the interest, if any, thereon, in
accordance with the provisions of the applicable Legal Requirement. Not later
than the date on which each Imposition is due and payable, Grantor shall deliver
to Beneficiary evidence acceptable to Beneficiary showing the payment of such
Imposition. Grantor also shall deliver to Beneficiary, within ten (10) days
after receipt thereof, copies of all settlements and notices pertaining to any
Imposition which may be issued by any Governmental Authority.
<PAGE>
(b) Nothing contained in this Deed in Trust shall affect any right or
remedy of Beneficiary under this Deed of Trust or otherwise to pay, without
notice or demand to Grantor, any Imposition from and after the date on which
such Imposition shall have become due and payable and, in such event, the amount
so paid (i) shall be deemed to be Indebtedness, (ii) shall be a lien on the
Property prior to any right or title to, interest in, or claim upon, the
Property subordinate to the lien of this Deed of Trust, and (iii) shall be
immediately due and payable, on demand, together with interest thereon at the
Interest Rate, from the date of any such payment by Beneficiary to the date of
repayment to Beneficiary.
6. Deposits. Grantor, at Beneficiary's option, shall deposit with
Beneficiary on the first day of each month from and after the date hereof, an
amount equal to one-twelfth (1/12th) of (a) the annual Impositions, and (b) the
annual premiums for the insurance required to be provided hereunder with respect
to the Real Estate (such premiums for insurance being hereinafter referred to as
"Insurance Premiums"). The amount of annual Impositions and Insurance Premiums,
when unknown, shall be estimated by Beneficiary. Such deposits shall be used by
Beneficiary to pay Impositions and Insurance Premiums when due. From time to
time, on demand, Grantor shall pay to Beneficiary additional sums sufficient to
permit payment of the next due installments of Impositions and Insurance
Premiums, if, and to the extent that, the required monthly deposits thereafter
falling due before the respective payment dates would otherwise be insufficient
to permit the full payment thereof. Upon any failure of Grantor to make any
payment of the Indebtedness when due and payable or to perform any of the
Obligations in accordance with the provisions of this Deed of Trust or any other
Loan Document, Beneficiary may apply any funds deposited with Beneficiary for
Impositions or Insurance Premiums to the payment of any of the Indebtedness or
to the performance of any such Obligation. To the extent permitted by law, the
sums deposited pursuant to this Article 6 shall bear no interest and may be
commingled with other funds of Beneficiary. Upon an assignment of this Deed of
Trust, Beneficiary shall have the right to pay over the balance of any sums
deposited pursuant to this Article 6 and then in its possession to Beneficiary's
assignee, and, thereupon, Beneficiary shall be completely released from all
liability with respect to such sums and Grantor shall look solely to
Beneficiary's assignee with respect thereto. The foregoing provisions shall
apply to every transfer of such deposits to a new assignee. Upon payment of the
entire amount of the Indebtedness and performance of the Obligations in
accordance with the provisions of this Deed of Trust and the other Loan
Documents, or, at the election of Beneficiary, at any prior time, the balance of
the deposits then in Beneficiary's possession shall be paid over to the record
owner of the Property. Grantor, at Beneficiary's request, shall make the
aforesaid deposits with such servicer or financial institution as Beneficiary
from time to time shall designate. Notwithstanding the foregoing, Beneficiary
agrees not to require deposits for Impositions or Insurance Premiums unless and
until Grantor shall have failed to pay such Impositions and Insurance Premiums
directly to the respective governmental agencies and insurance companies when
due and payable, on two occasions in any one calendar year.
<PAGE>
7. Insurance. (a) Grantor shall keep all improvements on said land, now or
hereafter erected, constantly insured pursuant to the terms of the Indenture,
including, but not limited to, the following:
(i) Grantor shall provide and keep in full force and effect, or cause
to be provided and kept in full force and effect, for the benefit of
Beneficiary, as hereinafter provided:
a. insurance for the Buildings and the Fixtures (w) against loss
or damage by fire, lightning, windstorm, tornado, hail and such other
further and additional hazards of whatever kind or nature as are now
or hereafter may be covered by standard extended coverage "all risk"
endorsements (including, but without limiting the generality of the
foregoing, and specifically, vandalism, malicious mischief and damage
by water), (x) against flood disaster pursuant to the Flood Disaster
Protection Act of 1973, 84 Stat. 572, 42 U.S.C. 4001 if the Real
Estate is located in an area identified by the United States
Department of Housing and Urban Development as a flood hazard area,
(y) against loss of rentals and business interruption due to any of
the foregoing causes, and (z) when and to the extent required by
Beneficiary, against any other risk insured against by persons
operating properties similar to the Real Estate and located in the
vicinity of the Real Estate or operations similar to the operations
conducted at the Real Estate;
b. insurance for demolition and increased cost of construction
coverage;
c. if a sprinkler system shall be located in the Buildings,
sprinkler leakage insurance;
d. comprehensive public liability insurance with respect to the
Real Estate and the operations related thereto, whether conducted on
or off the Real Estate, against liability for personal injury,
including bodily injury and death, and property damage. Such
comprehensive public liability insurance shall be on an occurrence
basis and shall specifically include, but not be limited to, sprinkler
leakage legal liability (if a sprinkler shall be located in the
Buildings), water damage legal liability, products liability, motor
vehicle liability for all owned and non-owned vehicles, including
rented and leased vehicles, and contractual indemnification;
<PAGE>
e. contingent liability insurance in connection with any loss
arising from the fact or claim that a Building is or is deemed to be a
non-conforming property; and
f. such other insurance in such amounts as may from time to time
reasonably be required by Beneficiary against such other insurable
hazards as at the time are commonly insured against in the case of
properties similar to the Real Estate and located in the vicinity of
the Real Estate or operations similar to the operations conducted at
the Real Estate.
All insurance provided hereunder shall be in such form and in such amounts as,
from time to time, shall be acceptable to Beneficiary, in its reasonable
discretion, shall name Beneficiary as a named insured under a standard
"non-contributory mortgagee" endorsement or its equivalent, which shall be
acceptable to Beneficiary, shall provide for loss payable to Beneficiary, shall
be provided by insurance companies which have a Best's rating of at least "AXII"
and otherwise shall be acceptable to Beneficiary in its sole discretion.
Anything contained herein to the contrary notwithstanding, in no event shall the
insurance provided herein be in an amount which is less than One Hundred Percent
(100%) of the full replacement cost of the Buildings and the Fixtures, including
the cost of debris removal, but excluding the value of foundations and
excavations, as determined from time to time by Beneficiary. Every policy of
insurance referred to in this Article 7 shall contain an agreement by the
insurer that it will not cancel such policy except after thirty (30) days prior
written notice to Beneficiary and that any loss payable thereunder shall be
payable notwithstanding any act or negligence of Grantor or Beneficiary which
might, absent such agreement, result in a forfeiture of all or a part of such
insurance payment and notwithstanding (A) occupancy or use of the Property for
purposes more hazardous than permitted by the terms of such policy, (B) any
foreclosure or other action or proceeding taken by Beneficiary pursuant to this
Deed of Trust upon the happening of a Default (hereinafter defined) or (C) any
change in title or ownership of the Property. Grantor shall assign and deliver
to Beneficiary all such policies of insurance, or duplicate originals thereof
and a certificate of insurance, certified to Beneficiary by the insurer as being
true copies, as collateral and further security for payment of the Indebtedness
and performance of the Obligations. If any insurance required to be provided
hereunder shall expire, be withdrawn, become void by breach of any condition
thereof by Grantor or by any lessee of the Real Estate or any portion thereof,
or become void or questionable by reason of the failure or impairment of the
capital of any insurer, or if for any other reason whatsoever any such insurance
shall become unsatisfactory to Beneficiary, Grantor immediately shall obtain new
or additional insurance which shall be satisfactory to Beneficiary in its
reasonable discretion. Grantor shall not take out any separate or additional
insurance which is contributing in the event of loss unless it is properly
endorsed and otherwise satisfactory to Beneficiary in all respects.
(ii) Grantor shall:
a. pay or cause to be paid as they become due all premiums for
the insurance required hereunder and
<PAGE>
b. not later than the expiration of each such policy, deliver a
renewal policy or a duplicate original thereof or certificates thereof
to Beneficiary by the insurer as being a true copy evidencing the
insurance required to be provided hereunder, marked "premium paid", or
accompanied by such other evidence of payment as shall be satisfactory
to Beneficiary in its sole discretion.
(iii) If Grantor shall be in default of its obligation to so insure or
deliver any such prepaid policy or policies of insurance to Beneficiary in
accordance with the provisions hereof, Beneficiary, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and, in such event, the amount of all such premium or
premiums:
a. shall be deemed to be Indebtedness,
b. shall be a lien on the Property prior to any right or title
to, or interest in, or claim upon, the Property subordinate to the
lien of this Deed of Trust and
c. shall be immediately due and payable, on demand, together with
interest thereon at the Interest Rate, from the date of any such
payment by Beneficiary to the date of repayment to Beneficiary.
(iv) Grantor shall increase the amount of insurance required herein at
the time that each such policy of insurance is renewed (but, in no event, less
frequently than once during each twelve (12) month period) by using the F.W.
Dodge Building Index to determine whether there shall have been an increase in
the replacement cost of the Buildings and the Fixtures since the most recent
adjustment to any such policy and, if there shall have been any such increase,
the amount of insurance required to be provided hereunder shall be adjusted
accordingly.
(v) Grantor promptly shall comply with, and shall cause the Buildings
and the Fixtures to comply with, (i) all of the provisions of each such
insurance policy, and (ii) all of the requirements of the insurers thereunder
applicable to Grantor or to any of the Buildings or the Fixtures or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration, repair
or Restoration (hereinafter defined) of any of the Buildings or the Fixtures,
even if such compliance would necessitate structural changes or improvements or
would result in interference with the use or enjoyment of the Real Estate or any
portion thereof. If Grantor shall use the Real Estate or any portion thereof in
any manner which would permit the insurer to cancel any insurance required to be
provided hereunder, Grantor immediately shall obtain a substitute policy which
shall be satisfactory to Beneficiary and which shall be effective on or prior to
the date on which any such other insurance policy shall be cancelled. Grantor
shall assign and deliver to Beneficiary all such policies of insurance, or
duplicate originals thereof and a certificate of insurance, certified to
Beneficiary by the insurer as being true copies, as collateral and further
security for payment of Indebtedness and performance of the Obligations.
<PAGE>
(b) If the Buildings or the Fixtures or any portion
thereof shall be damaged, destroyed or injured by fire or any other
casualty (whether insured or uninsured), Grantor shall give immediate
notice thereof to Beneficiary, and, provided that Beneficiary shall
have notified Grantor of Beneficiary's election to apply the Insurance
Proceeds (if any) or any portion thereof paid on account thereof to
Grantor toward the Restoration of the Buildings or the Fixtures in
accordance with the provisions of Paragraph 7(c) hereof, then, Grantor
promptly shall commence and diligently shall continue and complete the
repair, restoration, replacement or rebuilding (hereinafter referred
to as "Restoration") of the Buildings and the Fixtures so damaged,
destroyed or injured substantially to their value, condition and
character immediately prior to such damage, destruction or injury, in
accordance with plans and specifications (bearing the signed approval
of an architect satisfactory to Beneficiary) which shall have been
approved by Beneficiary prior to the commencement of such Restoration.
Grantor diligently shall complete, and pay for the cost of, the
Restoration of the Buildings and the Fixtures located on the Land
which are at any time in the process of construction, alteration or
Restoration. Notwithstanding any damage to, or destruction of, or
injury to, the Buildings or the Fixtures or any portion thereof by
fire or other casualty, Grantor shall continue to make all payments
due under this Deed of Trust and under the Indenture and the other
Loan Documents in accordance with the provisions of this Deed of
Trust, the Indenture and the applicable provisions of the other Loan
Documents. Any Insurance Proceeds remaining after completion of such
Restoration shall be retained by Beneficiary and shall be applied to
the payment of the Indebtedness then outstanding, in such proportion
and priority as Beneficiary, in its sole discretion, may elect.
<PAGE>
(c) All Insurance Proceeds which are payable to Grantor in
connection with any damage to, or destruction of, or injury to, the Buildings or
the Fixtures shall be paid to Beneficiary, and Beneficiary is hereby authorized
to adjust, collect and compromise, in its sole discretion, all claims under all
policies of insurance and to execute and deliver on behalf of Grantor all
necessary proofs of loss, receipts, vouchers and releases required by the
insurers. Grantor agrees to execute, upon demand by Beneficiary, all such proofs
of loss, receipts, vouchers and releases and to cooperate with Beneficiary in
connection therewith. Each insurer is hereby authorized and directed to make
payment of any Insurance Proceeds under any policies of insurance, including the
return of unearned premiums, directly to Beneficiary instead of to Grantor and
Beneficiary jointly and Beneficiary is hereby authorized to endorse any draft
therefor as Grantor's attorney-in-fact. So long as (i) no Default under this
Deed of Trust, or (ii) any event, which, but for the giving of notice or passage
of time, or both, would constitute a Default under this Deed of Trust shall have
occurred, Beneficiary shall pay the Insurance Proceeds or any portion thereof
(after deducting therefrom all costs and expenses, including, but without
limiting the generality of the foregoing, reasonable attorneys' fees, costs and
disbursements, incurred by Trustee or Beneficiary in connection with the
collection thereof) to Grantor, in accordance with the terms and conditions of
the Indenture, and further on such terms and conditions as Beneficiary, in its
sole discretion, may specify, for the sole purpose of Grantor's Restoration of
the Buildings and the Fixtures so damaged, destroyed or injured, it being
understood and agreed, however, that Beneficiary shall have no obligation
whatsoever to see to the proper application of any Insurance Proceeds so paid to
Grantor. Reduction of the outstanding amount of the Indebtedness resulting from
the application of any such Insurance Proceeds to such Indebtedness by
Beneficiary shall be deemed to take effect only on the date of Beneficiary's
receipt of such Insurance Proceeds and its election to apply the same against
the Indebtedness then outstanding hereunder. If, prior to the receipt by
Beneficiary of any Insurance Proceeds, the Property or any portion thereof shall
have been sold by Trustee pursuant to the power of sale provided herein,
Beneficiary shall have the right to receive the Insurance Proceeds to the extent
of any deficiency found to be due upon such sale, whether or not a deficiency
judgment on this Deed of Trust shall have been sought or recovered or denied,
together with interest thereon at the Interest Rate, and the reasonable
attorneys' fees, costs and disbursements incurred by Trustee and Beneficiary in
connection with the collection of the Insurance Proceeds. Anything contained in
this Deed of Trust or any Legal Requirement to the contrary notwithstanding,
Beneficiary shall not be deemed to be a trustee or other fiduciary with respect
to its receipt of any Insurance Proceeds.
<PAGE>
(d) The insurance required by this Deed of Trust may, at the
option of Grantor, be effected by blanket and/or umbrella policies issued to
Grantor covering the Buildings and the Fixtures as well as other properties
(real and personal) which are owned or leased by Grantor, provided that, in each
case, the policies otherwise comply with the provisions of this Deed of Trust
and allocate to the Buildings and the Fixtures, from time to time, the coverage
specified by Beneficiary, without possibility of reduction or coinsurance by
reason of, or damage to, any other property (real or personal) named therein. If
the insurance required by this Deed of Trust shall be effected by any such
blanket or umbrella policies, Grantor shall furnish to Beneficiary original
policies or duplicate originals thereof, with schedules attached thereto showing
the amount of the insurance provided under such policies which is applicable to
the Buildings and the Fixtures.
(e) Any conveyance of the Property, in accordance with the
provisions hereof, shall transfer therewith all of Grantor's interest in all
insurance policies then covering the Buildings and the Fixtures or the
operations conducted at the Real Estate, including, but without limiting the
generality of the foregoing, any unearned premiums.
<PAGE>
8. Condemnation/Eminent Domain. (a) Notwithstanding (i) any taking by
eminent domain, condemnation or otherwise of all or any portion of the Property,
or (ii) the change of grade of any street, road or avenue or the widening of
streets, roads or avenues adjoining or abutting the Land, or (iii) any other
injury to, or decrease in value of, the Property caused in any manner by any
Governmental Authority (any of the foregoing events being hereinafter referred
to as a "Taking"), Grantor shall continue to make all payments due under this
Deed of Trust and under the Indenture and the other Loan Documents in accordance
with the provisions of this Deed of Trust, the Indenture and the applicable
provisions of the other Loan Documents. Grantor shall notify Beneficiary
immediately upon obtaining knowledge of the institution of any proceedings for
any Taking or of any contemplated Taking. All Awards payable to Grantor under
the Lease made in connection with any Taking shall be paid to Beneficiary free
and clear of all liens and encumbrances and shall be held by it in accordance
with the terms of the Indenture. Beneficiary is hereby authorized to collect any
Award and to negotiate and settle, in its sole discretion, any such proceedings
with respect to a Taking and the amount of any Award to be made in connection
therewith and to execute and deliver on behalf of Grantor all necessary proofs
of loss, receipts, vouchers and releases required in connection with any Taking.
Grantor agrees to execute, upon demand by Beneficiary, all such proofs of loss,
receipts, vouchers and releases and to cooperate with Beneficiary in connection
therewith. Each Governmental Authority is hereby authorized and directed to make
payment of any Award made in connection with any Taking directly to Beneficiary
instead of to Grantor and Beneficiary jointly and Beneficiary is hereby
authorized to endorse any draft therefor as Grantor's attorney-in-fact. Subject
to the terms and conditions of the Indenture and so long as (i) no Default under
this Deed of Trust, or (ii) any event, which, but for the giving of notice or
passage of time, or both, would constitute a Default under this Deed of Trust,
shall have occurred, Beneficiary shall pay the Award or any portion thereof
(after deducting therefrom all costs and expenses, including, but without
limiting the generality of the foregoing, reasonable attorneys' fees, costs and
disbursements, incurred by Trustee and Beneficiary in connection with the
collection thereof), to Grantor, on such terms and conditions as Beneficiary, in
its sole discretion, may specify, for the sole purpose of Grantor's Restoration
of the Buildings and the Fixtures remaining after any such Taking, it being
understood and agreed, however, that Beneficiary shall have no obligation
whatsoever to see to the proper application of any Award so paid to Grantor.
Reduction of the outstanding amount of the Indebtedness resulting from the
application of any such Award by Beneficiary shall be deemed to take effect only
on the date of Beneficiary's receipt of such Award and its election to apply the
same against the Indebtedness then outstanding hereunder. If, prior to the
receipt by Beneficiary of any Award, the Property or any portion thereof shall
have been sold by Trustee pursuant to the power of sale provided herein,
Beneficiary shall have the right to receive the Award to the extent of any
deficiency found to be due upon such sale, whether or not a deficiency judgment
on this Deed of Trust shall have been sought or recovered or denied, together
with interest thereon at the Interest Rate, and the reasonable attorneys' fees,
costs and disbursements incurred by Trustee and Beneficiary in connection with
the collection of the Award.
<PAGE>
(b) If there shall be any Taking, then, provided that Beneficiary
shall have notified Grantor of Beneficiary's election to apply the Award or any
portion thereof paid on account of such Taking to Grantor toward the Restoration
of the Buildings and the Fixtures remaining after the Taking, in accordance with
the provisions of Paragraph 8(a) hereof, then, Grantor promptly shall commence
and diligently shall continue and complete the Restoration of the Buildings and
the Fixtures remaining after such Taking substantially to their value, condition
and character immediately prior to such Taking, in accordance with plans and
specifications which shall have been approved by Beneficiary prior to the
commencement of such Restoration. Grantor diligently shall complete, and pay for
the cost of, the Restoration of any Buildings or Fixtures located on the Land
which are at any time in the process of construction, alteration or Restoration.
Any Award remaining after completion of such Restoration shall be retained by
Beneficiary and shall be applied to the payment of the Indebtedness then
outstanding, in such proportion and priority as Beneficiary, in its sole
discretion, may elect.
9. Sale and Lease of the Property. Except as provided in the Indenture,
Grantor shall not, at any time, whether voluntarily or involuntarily, without
the prior written consent of Beneficiary in each instance,
(a) sell, assign, transfer or convey all or any part of the Property
or any interest therein; or
(b) lease or sublease the Real Estate or any portion thereof except in
accordance with the terms hereof; or
(c) (i) make any new or additional deed of trust, mortgage or other
loan which is secured by the Property or any portion thereof (whether superior
or junior to the lien of this Deed of Trust and whether recourse or
non-recourse) unless such loan is made by Beneficiary, or (ii) except for the
Permitted Encumbrances and subject to the provisions of Articles 10 and 11,
otherwise create, grant, permit or suffer any lien, security interest, claim,
charge or encumbrance of any kind or nature whatsoever, whether recorded or
unrecorded, against the Property or any portion thereof.
<PAGE>
10. Discharge of Liens. Subject to the terms and conditions of the
Indenture, Grantor at all times shall keep the Property free from the liens of
mechanics, laborers, contractors, subcontractors and materialmen and, except for
the Permitted Encumbrances and any new or additional deeds of trust or mortgages
which may be made to Beneficiary, free from any and all other liens, claims,
charges or encumbrances of any kind or nature whatsoever.
11. Right of Contest. To the extent permitted by the Indenture, Grantor, at
its sole cost and expense, may, in good faith, contest, by proper legal actions
or proceedings, the validity of any Legal Requirement or the application thereof
to Grantor or the Property, or the validity or amount of any Imposition or the
validity of the claims of any mechanics, laborers, subcontractors, contractors
or materialmen.
12. Subleases. (a) Except to the extent permitted by the Indenture, Grantor
has no right or power, as against Beneficiary, without the prior written consent
of Beneficiary in each case (i) to enter into any Subleases or to modify, amend,
cancel, extend, renew, accept for surrender or otherwise change in any manner
any of the terms, covenants or conditions of any Subleases, (ii) to consent to
any assignment of any Sublease or any subletting of the portion of the Real
Estate subject to any Sublease, or (iii) to assign, mortgage or otherwise
encumber any of the Subleases or any of the Rents due or to become due
thereunder or to which Beneficiary may now or hereafter become entitled, or (iv)
to accept prepayments of installments of rent for more than thirty (30) days in
advance of the time when the same shall become due or to anticipate the rents
thereunder, except for security deposits not in excess of one (1) month's rent.
Grantor shall notify Beneficiary not later than six (6) months prior to the date
of the expiration of the term of any Sublease of its intention either to renew
or not renew any such Sublease and if Grantor shall intend to renew the
Sublease, the terms and conditions of any such renewal Sublease.
<PAGE>
(b) In addition to containing such other terms and conditions as
Beneficiary shall approve, each Sublease which shall be entered into in
accordance with the provisions hereof shall (i) not permit the sublessee
thereunder to terminate or invalidate the terms of its Sublease as a result of
any action taken by Trustee or Beneficiary to enforce any right or remedy under
this Deed of Trust, including, but without limiting the generality of the
foregoing, any sale of the Property or any portion thereof by Trustee pursuant
to the power of sale provided herein or otherwise, (ii) include a subordination
clause providing that the Sublease and the interest of the sublessee thereunder
in the Property are in all respects subject and subordinate to this Deed of
Trust, (iii) provide that, at the option of Beneficiary or the purchaser at a
sale by Trustee pursuant to the power of sale provided herein or otherwise or
the grantee in a voluntary conveyance in lieu of such Trustee's sale, the
sublessee thereunder shall attorn to Beneficiary or to such purchaser or grantee
under all of the terms of the Sublease and recognize such entity as the
sublessor under the Sublease for the balance of the term of the Sublease, and
(iv) provide that, in the event of the enforcement by Beneficiary of the rights
and remedies provided by law or in equity or by this Deed of Trust, any person
succeeding to the interest of Beneficiary as a result of such enforcement shall
not be bound by any prepayment of installments of rent for more than thirty (30)
days in advance of the time when the same shall become due or any amendment,
modification, extension, cancellation or renewal of the Sublease made without
the prior written consent of Beneficiary.
(c) As to any Subleases which shall be consented to by Beneficiary,
Grantor shall (i) promptly perform all of the provisions of the Subleases on the
part of the sublessor thereunder to be performed, (ii) promptly enforce all of
the provisions of the Subleases on the part of the sublessees thereunder to be
performed, (iii) refrain from taking any action which would result in the
termination of the Sublease by any lessee thereunder or the diminution of the
Rents thereunder, (iv) appear in and prosecute or defend any action or
proceeding arising under, growing out of, or in any manner connected with, the
Subleases or the obligations of the sublessor or the sublessees thereunder, as
the case may be, (v) exercise, within five (5) days after demand by Beneficiary,
any right to request from the sublessee under any Sublease a certificate with
respect to the status thereof, (vi) deliver to Beneficiary, within five (5) days
after demand by Beneficiary, a written statement containing the names of all
sublessees, the terms of all Subleases and the spaces occupied and rentals
payable thereunder and a statement of all Subleases which are then in default,
including the nature and magnitude of any such default, (vii) provide
Beneficiary with a copy of each notice of default received by Grantor under any
Sublease immediately upon receipt thereof and deliver to Beneficiary a copy of
each notice of default sent by Grantor under any Sublease simultaneously with
its delivery of such notice under such Sublease, and (viii) promptly deliver to
Beneficiary a fully executed counterpart of each Sublease upon the execution of
the same. All Subleases, if any, shall be subject and subordinate to this Deed
of Trust.
<PAGE>
(d) Grantor hereby assigns to Beneficiary, from and after the date
hereof, unconditionally and absolutely, primarily, on a parity with the
Property, and not secondarily, the Subleases and the Rents. Nothing contained in
this Article 12 shall be construed to bind Beneficiary to the performance of any
of the terms, covenants, conditions or agreements contained in any Sublease or
otherwise impose any obligation on Beneficiary (including, but without limiting
the generality of the foregoing, any liability under the covenant of quiet
enjoyment contained in any Sublease in the event that any sublessee shall have
been joined as a party defendant in any action commenced by reason of a Default
hereunder or in the event of the sale of the Property by Trustee pursuant to the
power of sale contained herein or otherwise or in the event any sublessee shall
have been barred and foreclosed of any or all right, title and interest and
equity of redemption in the Property), except that Beneficiary shall be
accountable for any money actually received pursuant to the aforesaid
assignment. Grantor hereby further grants to Beneficiary the right, but not the
obligation (i) to enter upon and take possession of the Real Estate for the
purpose of collecting the Rents, (ii) to dispossess by the usual summary
proceedings any sublessee defaulting in making any payment due under any
Sublease to Beneficiary or defaulting in the performance of any of its other
obligations under its Sublease, (iii) to let the Real Estate or any portion
thereof, (iv) to apply the Rents on account of the Indebtedness, and (v) to
perform such other acts as Beneficiary is entitled to perform pursuant to this
Article 12. Such assignment and grant shall continue in effect until the entire
amount of the Indebtedness shall be paid in full and all of the Obligations
shall be fully performed in accordance with this Deed of Trust and the other
Loan Documents, the execution of this Deed of Trust constituting and evidencing
the irrevocable consent of Grantor to the entry upon and taking possession of
the Real Estate by Beneficiary pursuant to such grant, whether or not the
Property shall have been sold by the Trustee pursuant to the power of sale
contained herein or otherwise and without applying for a receiver. The foregoing
provisions hereof shall constitute an absolute and present assignment of Rents
from the Real Estate. Notwithstanding the foregoing, Beneficiary grants to
Grantor, not as a limitation or condition hereof, but as a personal covenant
available only to Grantor and its successors and not to any sublessee or other
person, a license to collect all of the Rents and to retain, use and enjoy the
same, unless a Default shall exist hereunder, or unless any event shall have
occurred which, with the giving of notice or the lapse of time, or both, would
constitute a Default hereunder. In the event of any Default hereunder, Grantor
shall pay monthly, in advance, to Beneficiary, upon Beneficiary's entry into
possession pursuant to the foregoing grant, or to any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of the Real Estate and, upon the failure of Grantor to make any such
payment, Grantor shall vacate and surrender the possession of the Real Estate to
Beneficiary or to such receiver, and upon Grantor's failure to so vacate and
surrender, Grantor may be evicted by summary proceedings.
<PAGE>
(e) Grantor shall receive the Rents as set forth in Section 12(d)
hereof and shall hold the right to receive the Rents as a trust fund to be
applied first to the payment of Impositions and then to the payment of the
Indebtedness and, thereafter, to the payment of Insurance Premiums for policies
required to be provided hereunder before using any part of the total of the same
for any other purpose.
(f) Upon notice and demand, Grantor shall, from time to time, execute,
acknowledge and deliver to Beneficiary, or shall cause to be executed,
acknowledged and delivered to Beneficiary, in form satisfactory to Beneficiary,
one or more separate assignments (confirmatory of the general assignment
provided in this Article 12) of the sublessor's interest in any Sublease.
Grantor shall pay to Beneficiary the reasonable expenses incurred by Beneficiary
in connection with the preparation and recording of any such instrument.
13. Estoppel Certificates. Grantor, within five (5) business days after
request by Beneficiary, shall deliver, in form satisfactory to Beneficiary, in
its sole discretion, a written statement, duly executed and acknowledged,
setting forth the amount of the Indebtedness then outstanding and whether any
offsets, claims, counterclaims or defenses exist against the Indebtedness
secured by this Deed of Trust, and if any are alleged to exist, the nature
thereof shall be set forth in detail.
14. Loan Document Expenses. Grantor shall pay, together with any interest
or penalties imposed in connection therewith, all expenses incident to the
preparation, execution, acknowledgement, delivery and/or recording of this Deed
of Trust and the other Loan Documents, including, but without limiting the
generality of the foregoing, all filing, registration and recording fees and
charges, documentary stamps, intangible taxes and all Federal, State, county and
municipal taxes, duties, imposts, assessments and charges now or hereafter
required by reason of, or in connection with, this Deed of Trust or any other
Loan Document and, in any event, otherwise shall comply with the provisions set
forth in Article 4 hereof.
15. Beneficiary's Right to Perform. In the event of any Default hereunder,
Beneficiary may (but shall be under no obligation to) at any time perform the
Obligations, without waiving or releasing Grantor from any Obligations or any
Default under this Deed of Trust, and, in such event, the cost thereof,
including, but without limiting the generality of the foregoing, reasonable
attorneys' fees, costs and disbursements incurred in connection therewith (a)
shall be deemed to be Indebtedness, (b) shall be a lien on the Property prior to
any right or title to, interest in, or claim upon, the Property subordinate to
the lien of this Deed of Trust, and (c) shall be payable, on demand, together
with interest thereon at the Interest Rate, from the date of any such payment by
Beneficiary to the date of repayment to Beneficiary. No payment or advance of
money by Beneficiary pursuant to the provisions of this Article 15 shall cure,
or shall be deemed or construed to cure, any such Default by Grantor hereunder
or waive any rights or remedies of Beneficiary hereunder or at law or in equity
by reason of any such Default.
<PAGE>
16. Grantor's Existence. Subject to the provisions of the Indenture,
Grantor shall do all things necessary to preserve and keep in full force and
effect its existence, rights and privileges under the laws of the State in which
the Property is located and its right to own property and transact business in
such State.
17. Trustee's and Beneficiary's Costs and Expenses. If (a) Grantor shall
fail to make any payment of Indebtedness when the same shall be due and payable,
or shall fail to perform any of the Obligations under this Deed of Trust or any
other Loan Document, or (b) Trustee and/or Beneficiary shall exercise any of
their respective rights or remedies hereunder, or (c) any action or proceeding
is commenced in which it becomes necessary to defend or uphold the lien or
priority of this Deed of Trust or any action or proceeding is commenced to which
Trustee or Beneficiary is or becomes a party, or (d) the taking, holding or
servicing of this Deed of Trust by or on behalf of Beneficiary is alleged to
subject Trustee or Beneficiary to any civil or criminal fine or penalty, or (e)
Beneficiary's review and approval of any document, including, but without
limiting the generality of the foregoing, any Sublease, is requested by Grantor
or required by Beneficiary, then, in any such event, all such costs, expenses
and fees incurred by Trustee and Beneficiary, as the case may be, in connection
therewith (including, but without limiting the generality of the foregoing, any
civil or criminal fines or penalties and reasonable attorneys' fees, costs and
disbursements) (i) shall be deemed to be Indebtedness, (ii) shall be a lien on
the Property prior to any right or title to, interest in, or claim upon, the
Property subordinate to the lien of this Deed of Trust, and (iii) shall be
payable, on demand, together with interest thereon at the Interest Rate, from
the date of any such payment by Trustee or Beneficiary, as the case may be, to
the date of repayment to Trustee or Beneficiary, as the case may be. In any
action to enforce any remedy under this Deed of Trust, including, but without
limiting the generality of the foregoing, sale of the Property by Trustee
pursuant to the power of sale provided herein or otherwise, or to recover or
collect the Indebtedness or any portion thereof, the provisions of this Article
17 with respect to the recovery of costs, expenses, disbursements and penalties
shall prevail unaffected by the provisions of any Legal Requirement with respect
to the same to the extent that the provisions of this Article 17 are not
inconsistent therewith or violative thereof.
<PAGE>
18. Defaults. (a) The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute a default ("Default")
hereunder:
(i) an "Event of Default" under the Indenture;
(ii) subject to Grantor's right to contest the same
pursuant to, and in accordance with, the provisions of
Article 11 hereof, the failure to pay any Imposition or any
installment on account thereof or any Insurance Premiums
when due and payable within ten (10) days of notice by
Beneficiary of such failure, provided, however, that
Beneficiary shall not be required to give such notice on
more than two occasions in any one calendar year; or
(iii) the failure to furnish Beneficiary, within five
(5) days after request by Beneficiary, with receipted tax
bills or other proof of payment of the Impositions required
to be paid hereunder or of any Insurance Premiums for the
insurance required to be provided hereunder by not later
than the dates on which such Impositions or Insurance
Premiums must be paid so as not to constitute a Default
hereunder; or
(iv) the failure (x) after five (5) days from notice by
Beneficiary, to keep in full force and effect the insurance
required by this Deed of Trust, or (y) to assign and deliver
to Beneficiary the policy or policies of insurance required
to be provided hereunder in accordance with the provisions
hereof; or
(v) the failure to cure any actual or threatened waste,
removal, or demolition of, or material alteration to, the
Real Estate or any portion thereof within twenty (20) days
of knowledge of any such condition; or
<PAGE>
(vi) subject to Grantor's right to contest the same
pursuant to, and in accordance with, the provisions of
Article 11 hereof, the failure (x) to comply with any Legal
Requirement or to cure any violation or notice of violation
of any Legal Requirement within ten (10) days after the
issuance thereof, or (y) to comply with any requirement of
any insurance company issuing any policy of insurance
required to be provided hereunder; or
(vii) if the Real Estate or any portion thereof shall
be damaged, destroyed or injured by fire or other casualty,
or if there shall be a Taking and, in either of such cases,
if Grantor shall fail to restore the Buildings and the
Fixtures in accordance with the provisions hereof or in
accordance with the terms of the Indenture; or
(viii) if (x) subject to the provisions of Article 9
hereof, Grantor shall make any new or additional mortgages
on the Property or any portion thereof (whether superior or
junior to the lien of this Deed of Trust and whether
recourse or non-recourse) unless any such mortgage shall
secure a loan made by Beneficiary to Grantor, or (y) subject
to the provisions of Article 9 hereof, except for the
Permitted Encumbrances, Grantor otherwise shall encumber the
Property or any portion thereof, or (z) subject to the
provisions of Article 10 and Article 11 hereof and the
Indenture, Grantor creates, permits or suffers any lien,
claim, charge or encumbrance of any kind or nature
whatsoever to be recorded against the Property or any
portion thereof; or
(ix) if, subject to the provisions of Article 9 hereof
and the Indenture, Grantor shall (x) sell, transfer, assign
or convey the Property or any portion thereof or any
interest therein (by operation of law or otherwise), or (y)
lease or sublease all or any portion of the Real Estate
except in accordance with the provisions of Article 12
hereof, or (z) assign or encumber the Rents or any portion
thereof.
19. Remedies. (a) Upon the occurrence of any Default
hereunder, Beneficiary, or by its agents or attorneys and when
requested to do so by Beneficiary, Trustee, may, without notice,
presentment, demand or protest, all of which are hereby expressly
waived by Grantor to the extent permitted by applicable law, take such
action as Beneficiary deems advisable, in its sole discretion, to
protect and enforce the rights of Trustee and Beneficiary in and to
the Property, including, but without limiting the generality of the
foregoing, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as
Beneficiary may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Beneficiary
hereunder or at law or in equity:
<PAGE>
(i) Beneficiary may declare the entire amount of the
Indebtedness immediately due and payable. Thereupon, all of
the other Obligations also shall become immediately due and
payable.
(ii) Beneficiary may, without releasing Grantor from
any Obligation under this Deed of Trust or any other any
Loan Document and without waiving any Default, exercise any
of its rights and remedies under Article 15 hereof.
(iii) Beneficiary, upon notice to Grantor given in
accordance with applicable law, may elect to cause the
Property or any portion thereof to be sold in accordance
with the provisions hereof.
(iv) Beneficiary may elect to (x) institute and
maintain an action with respect to the Property under any
other Loan Document, or (y) take such other action as may be
allowed at law or in equity for the enforcement of this Deed
of Trust, the Additional Mortgages and the other Loan
Documents. Beneficiary may proceed in any such action to
final judgment and execution thereon for the whole of the
Indebtedness, together with interest thereon at the Interest
Rate, from the date on which Beneficiary shall cause the
same to be declared due and payable to the date of repayment
to Beneficiary, and all costs of any such action, including,
but without limiting the generality of the foregoing,
reasonable attorneys' fees, costs and disbursements.
<PAGE>
(v) Beneficiary may, without releasing Grantor from any
Obligation under this Deed of Trust, and without waiving any
Default, enter upon and take possession of the Real Estate
or any portion thereof, either personally or by its agents,
nominees, managers or receivers or attorneys, and dispossess
Grantor and its agents and servants therefrom and,
thereupon, Beneficiary may (x) use, manage and operate the
Real Estate and the business conducted upon the Real Estate
for any lawful purpose (and, either by purchase, repairs or
construction may maintain and restore the Real Estate) and
may conduct the business thereof and (y) exercise all rights
and powers of Grantor with respect to the Property, either
in the name of Grantor or otherwise, including, but without
limiting the generality of the foregoing, the right to make,
cancel, enforce or modify the Subleases, obtain and evict
sublessees, establish or change the amount of any Rents and
the manner of collection thereof and perform any acts which
Beneficiary deems proper, in its sole discretion, to protect
the security of this Deed of Trust. After deduction of all
costs and expenses of operating and managing the Real
Estate, including, but without limiting the generality of
the foregoing, reasonable attorneys' fees, costs and
disbursements, administration expenses, management fees and
brokers' commissions, satisfaction of liens on any of the
Property, payment of Impositions, claims and Insurance
Premiums, invoices of persons who may have supplied goods
and services to or for the benefit of any of the Property
and all costs and expenses of the maintenance, repair,
Restoration, alteration or improvement of any of the
Property, Beneficiary may apply the Rents received by
Beneficiary to payment of the Indebtedness or performance of
the Obligations. Beneficiary may apply the Rents received by
Beneficiary to the payment of any or all of the foregoing in
such order and amounts as Beneficiary, in its sole
discretion, may elect. Beneficiary may, in its sole
discretion, determine the method by which, and extent to
which, the Rents will be collected and the obligations of
the sublessees under the Subleases enforced and Beneficiary
may waive or fail to enforce any right or remedy of the
sublessor under any Sublease.
(vi) Beneficiary may disaffirm and cancel any Sublease
affecting the Real Estate or any portion thereof at any time
during the period that it is exercising its remedies under
this Article 19, even though Beneficiary shall have enforced
such Sublease, collected Rents thereunder or taken any
action that might be deemed by law to constitute an
affirmance of such Sublease. Such disaffirmance shall be
made by notice addressed to the sublessee at the Real Estate
or, at Beneficiary's option, such other address of the
sublessee as may be set forth in such Sublease.
<PAGE>
(b) If Beneficiary elects to effect a Trustee's sale of the Property in
lieu of judicial foreclosure, then Beneficiary may instruct Trustee to commence
such sale in the following manner:
(i) Sell or offer for sale the Property, in such
portions, order and parcels as Beneficiary may determine,
with or without having first taken possession of same, to
the highest bidder, for cash, at public auction. Such sale
and notice thereof shall be made (a) in accordance with the
then applicable provisions of Section 51.002 of the Texas
Proerty Code (or its successor statue), or (b) by
accomplishing all or any of the aforesaid in such manner as
permitted or required by Chapter 51 of the Texas Property
Code or by Chapter 9 of the Texas Business and Commerce Code
relating to the sale of collateral after default by a debtor
(as said Codes now exist or may be hereafter amended or
succeeded), or by any other present or subsequent amendments
or enactments relating to same. If the Property is situated
in more than one county, all required notices shall be given
in each such county, and such notices shall designate the
county in which the Property will be sold. The affidavit of
any person having knowledge of the facts to the effect that
notice was properly giving shall be prima facie evidence of
such fact. At any such sale (i) whether made under the power
herein contained, the aforesaid Texas Property Code, the
Texas Business and Commerce Code, any other requirement of
applicable law or governmental regulation or by virtue of
any judicial proceedings or any other legal right, remedy or
recourse, it shall not be necessary for Trustee to have been
physically present, or to have constructive possession of,
the Property (Grantor hereby covenanting and agreeing to
deliver to Trustee any portion of the Property not actually
or constructively possessed by Trustee immediately upon
demand by Trustee), and the title to and right of possession
of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and
delivered to the purchaser at such sale, (ii) each
instrument of conveyance executed by Trustee shall contain a
general warranty of title, binding upon Grantor, (iii) each
and every recital contained in any instrument of conveyance
<PAGE>
made by Trustee shall be prima facie evidence of the truth
and accuracy of the matters recited therein, including,
without limitation, non-payment of the Indebtedness,
advertisement and conduct of such sale in the manner
provided therein and otherwise by law, and appointment of
any successor Trustee hereunder, (iv) any and all
prerequistes to the validity thereof shall be conclusively
presumed to have been performed, (v) the receipt of Trustee
or of such other party or officer making the sale shall be a
sufficient discharge to the purchaser or purchasers for his
or their purchase money, and no such purchaser or
purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way
answerable for any loss, misapplication or non-application
thereof, (vi) to the fullest extent permitted by law,
Grantor shall be completely and irrevocably divested of all
of its right, title, claim and demand whatsoever, either at
law or in equity, in and to the property sold, and such sale
shall be a perpetual bar, both at law and in equity against
Grantor and against any and all other persons claiming or to
claim the property sold or any part thereof, by, through or
under Grantor, and (vii) to the extent and under such
circumstances as are permitted by law, Beneficiary and any
entity related by ownership or control to Beneficiary may be
a purchaser at any such sale. If Beneficiary is the highest
bidder at any Trustee's sale, then Beneficiary may credit
the portion of the purchase price that would be
distributable to Beneficiary against part of the
Indebtedness in lieu of paying cash. Beneficiary, from time
to time, also may rescind any such notice of Default and
notice of its election to sell the Property. The exercise by
Beneficiary of such right of postponement or rescission
shall not constitute a waiver of any Default then existing
or subsequently occurring nor impair the right of
Beneficiary to give notice of Default and notice of its
election to sell the property nor otherwise affect any
provision of this Deed of Trust, the Indenture or any other
Loan Document.
<PAGE>
(ii) Any person, including Grantor, Beneficiary or
Trustee may bid and purchase at the sale. Upon any sale,
Trustee shall execute and deliver to the purchaser or
purchasers a deed or deeds conveying the Property or the
portion thereof so sold, but without any covenant or
warranty whatsoever, express or implied.
(iii) In the event of a sale or other disposition of
the Property or any portion thereof and the execution of a
deed or other conveyance pursuant thereto, the recitals
therein of facts, such as the Default hereunder, the giving
of notice of such Default and notice of sale, demand that
such sale should be made, postponement of such sale, the
terms of sale, the sale, the purchase, payment of purchase
money and other facts affecting the regularity or validity
of such sale or disposition shall be conclusive proof of the
truth of such facts and any such deed or conveyance shall be
conclusive against all persons as to all matters and facts
recited therein.
(iv) The proceeds of any sale, disposition or other
realization upon all or any part of the Property shall be
distributed by Beneficiary in the following order of
priorities unless otherwise provided by applicable law:
First, to the payment of the costs and expenses of such
sale, including, without limitation, all expenses of
Beneficiary and its agents including the reasonable fees, at
normal rates, and reasonable expenses of its counsel, and
all expenses, liabilities and advances made or incurred by
Beneficiary in connection therewith;
<PAGE>
Second, to the Holders for amounts due and unpaid on
the Indebtedness for interest, ratably, without preference
or priority of any kind;
Third, to the Holders for amounts due and unpaid on the
Indebtedness for principal, ratably, without preference or
priority of any kind;
Fourth, to the Holders, pro rata, for the payment in
full of the other outstanding Obligations; and
Finally, after payment in full of all the secured
Obligations, to the payment of Grantor, or its successors or
assigns, or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
(c) Further, Grantor hereby consents to the appointment of a receiver
or receivers of the Property and of all of the earnings, revenues, rents,
issues, profits and income thereof. After the occurrence of any such default or
upon the commencement of any proceedings to foreclose this Deed of Trust or to
enforce the specific performance hereof or in aid thereof or upon the
commencement of any other judicial proceeding to enforce any right of the
Trustee or Beneficiary hereunder, to the full extent allowed by applicable law,
Beneficiary shall be entitled, as a matter of right, if it shall so elect,
without the giving of notice to any other party and without regard to the
adequacy or inadequacy of any security for the Deed of Trust indebtedness,
forthwith either before or after declaring the entire amount of the Indebtedness
to be due and payable, to the appointment of such a receiver or receivers. Such
receiver shall be authorized and empowered to enter upon and take possession of
the Property and to collect all rents and apply the same as the court may
direct, and any such receiver shall be entitled to hold, store, use, operate,
manage and control the Property and conduct the business thereof as Beneficiary
would be entitled to pursuant to the provisions of this Deed of Trust. All fees
and expenses of such receiver shall be added to the amounts secured by this Deed
of Trust. Beneficiary shall be liable to account only for such rents actually
received by Beneficiary. Notwithstanding the appointment of any receiver or
other custodian or trustee of Grantor, or of any of the Property, or any other
property of Grantor, or any part thereof, Beneficiary shall be entitled to
retain possession and control of any property at the time held by, or payable or
deliverable under the terms of this Deed of Trust to, Beneficiary.
<PAGE>
(d) The remedies and rights granted to Beneficiary and Trustee
hereunder are cumulative and are not in lieu of, but are in addition to, and
shall not be affected by the exercise of, any other remedy or right available to
Beneficiary or Trustee whether now or hereafter existing either at law or in
equity or under this Deed of Trust or any other Loan Document.
(e) Except as otherwise provided herein, any sale of the Property
pursuant to this Deed of Trust, without further notice, shall create the
relation of landlord and tenant at sufferance between the purchaser and Grantor
or any person holding possession of the Real Estate through Grantor, and upon
failure of Grantor or such person to surrender possession thereof immediately,
Grantor, or such person may be removed by a writ of possession of the purchaser,
either in the Superior Court having venue or in any other court hereafter having
venue.
20. Security Agreement under Uniform Commercial Code. It is the intention
of Grantor and Beneficiary that this Deed of Trust shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code of the State in
which the Property is located and Beneficiary is hereby granted a security
interest in any and all of the Property which may or might now or hereafter be
or be deemed to be personal property, fixtures or property other than real
property. Notwithstanding the filing of a financing statement covering any of
the Property in the records normally pertaining to personal property, all of the
Property, for all purposes and in all proceedings, legal or equitable, shall be
regarded, at Beneficiary's option (to the extent permitted by law), as part of
the Real Estate whether or not any such item is physically attached to the Real
Estate or serial numbers are used for the better identification of certain
items. The mention in any such financing statement of any of the Property shall
never be construed in any way as derogating from or impairing this declaration
and hereby stated intention of Grantor, Trustee and Beneficiary that such
mention in the financing statement is hereby declared to be for the protection
of Beneficiary in the event any court shall at any time hold that notice of the
priority of this Deed of Trust, to be effective against any third party,
including the Federal government or any authority or agency thereof, must be
filed in the Uniform Commercial Code records. Grantor agrees to execute, as
debtor, such financing statements as Beneficiary may now or hereafter reasonably
request in order that such security interest or interests may be perfected
pursuant to such laws. Pursuant to the provisions of the Uniform Commercial
Code, Grantor hereby authorizes Trustee and Beneficiary, without the signature
of Grantor, to execute and file financing and continuation statements if
Beneficiary shall determine, in its sole discretion, that such financing or
continuation statements are necessary or advisable in order to preserve or
perfect its security interest in the Fixtures covered by this Deed of Trust, and
Grantor shall pay to Beneficiary, on demand, any expenses incurred by Trustee
and Beneficiary in connection with the preparation, execution and filing of such
statements that may be filed by Trustee or Beneficiary.
<PAGE>
Upon the occurrence of any Default, Beneficiary shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code (the
"Code") of the State of Texas and specifically the right to direct notice and
collections of any obligation owing to grantors by any lessee. In addition to
its rights to foreclose this Deed of Trust, Beneficiary shall have the right to
sell the personal property or any part thereof, or any further, or additional,
or substituted personal property, at one or more times, and from time to time,
at public sale or sales or at private sale or sales,on such terms as to cash or
credit, or partly for cash and partly on credit, as Beneficiary may deem proper.
Beneficiary shall have the right to become the purchaser at any such public sale
or sales, free and clear of any and all claims, rights or equity of redemption
in Grantor, all of which are hereby waived and released. Grantor shall not be
credited with the amount of any part of such purchase price, unless, until and
only to the extent that (a) such payment is actually received in cash or (b)
Beneficiary is the successful bidder. Notice of public sale, if given, shall be
sufficiently given, for all purposes, if published not less than seven (7) days
prior to any sale, in any newspaper of general circulation distributed in the
city in which the property to be sold is located or as otherwise required by the
Code. The net proceeds of any sale of the personal property which may remain
after the deduction of all costs, fees and expenses incurred in connection
therewith, including, but not limited to, all advertising expenses, broker's or
brokerage commissions, documentary stamps, recording fees, foreclosure costs,
stamp taxes and counsel fees, shall be credited by Beneficiary against the
liabilities, obligations and indebtedness of Grantor to Beneficiary secured by
this Deed of Trust and evidenced by the Indebtedness. Any portion of the
personal property which may remain unsold after the full payment, satisfaction
and discharge of all of the liabilities, obligations and indebtedness of Grantor
to Beneficiary shall be returned to the respective parties which delivered the
same to Beneficiary. If at any time Grantor or any other party shall become
entitled to the return of any of the personal property hereunder, any transfer
or assignment thereof by Beneficiary shall be, and shall recite that the same
is, made wholly without representation or warranty whatsoever by, or recourse
whatsoever against Beneficiary.
<PAGE>
21. Additional Representations and Warranties. Grantor represents and
warrants that: (a) Grantor is a corporation duly organized and validly existing
and in good standing under the laws of the State of Indiana; (b) Grantor is
qualified to do business in the State in which the Property is located; (c)
Grantor has the requisite power and lawful authority to execute and deliver this
Deed of Trust, the Indenture and the other Loan Documents executed and delivered
by it and to perform the Obligations; (d) the execution and delivery of this
Deed of Trust, the Indenture and the other Loan Documents by Grantor and
performance of its obligations under this Deed of Trust, the Indenture and the
other Loan Documents will not result in the Grantor being in default under any
provision of its Certificate of Incorporation or By-Laws or of any mortgage,
document, instrument, deed of trust, credit or other agreement to which it is a
party or by which its assets are bound; (e) Grantor has the requisite power and
lawful authority to encumber the Property in the manner herein set forth; (f)
the Board of Directors of Grantor has duly authorized the execution and delivery
of this Deed of Trust, the Indenture and the other Loan Documents and there is
no provision in Grantor's Certificate of Incorporation or By-Laws requiring any
other approvals or consents for the execution and delivery of this Deed of
Trust, the Indenture and the other Loan Documents; (g) on the date hereof, no
portion of the Buildings or the Fixtures have been damaged, destroyed or injured
by fire or other casualty which is not now fully restored; (h) Grantor has all
necessary licenses, authorizations, registrations and approvals to own, use,
occupy and operate the Real Estate and has full power and authority to carry on
its business at the Real Estate as currently conducted and has not received any
notice of any violation of any Legal Requirement; (i) as of the date hereof,
Grantor has not received any notice of any Taking of the Property or any portion
thereof and Grantor has no knowledge that any such Taking is contemplated; (j)
Grantor is a business and commercial organization, and the transaction reflected
in, and effectuated by, the Loan Documents is made solely to acquire or carry on
a business and commercial enterprise; and (k) there are no Subleases affecting
the Real Estate or any portion thereof except for those Subleases referred to in
Exhibit B hereof.
<PAGE>
22. No Waivers, Etc. A failure by Trustee or Beneficiary to insist upon the
strict performance by Grantor of any of the terms and provisions of this Deed of
Trust shall not be deemed to be a waiver of any of the terms, covenants,
conditions and provisions hereof and Trustee and Beneficiary, notwithstanding
any such failure, shall have the right thereafter to insist upon the strict
performance by Grantor of any and all of the terms, covenants, conditions and
provisions of this Deed of Trust to be performed by Grantor. No delay or
omission of Trustee or Beneficiary in the excuse of any right or power occurring
upon any Default shall impair such right or power or shall be construed to be a
waiver thereof or acquiescence therein and every right, power and/or remedy
granted by this Deed of Trust to Trustee and/or Beneficiary may be exercised
from time to time and as often as may be deemed expedient by Trustee or
Beneficiary.
Without affecting the personal liability of any person, including Trustor
(other than any person released pursuant hereto), for the payment of the
indebtedness secured hereby, and without affecting the lien of this Deed of
Trust for the full amount of the indebtedness remaining unpaid upon any property
not reconveyed pursuant hereto, Beneficiary and Trustee are respectively
authorized and empowered as follows: Beneficiary may, at any time and from time
to time, either before or after the expiration of the Indenture, and without
notice: (a) release any person liable for the payment of any of the
indebtedness, (b) make any agreement extending the time or otherwise altering
the terms of payment of any of the indebtedness, (c) accept additional security
therefor of any kind and (d) release any property, real or personal, securing
the indebtedness.
23. Trust Funds. (a) All deposits made as security under any Subleases
shall be treated as trust funds, shall not be commingled with any other funds of
Grantor and shall be held in accordance with the provisions of any other
applicable Legal Requirements. Within ten (10) days after request by
Beneficiary, Grantor shall furnish Beneficiary with evidence, satisfactory to
Beneficiary, in its sole discretion, of compliance with this Paragraph 23(b),
together with a certified statement of the amount of all of the security
deposited by sublessees and copies of all Subleases not theretofore delivered to
Beneficiary.
(b) On and after the occurrence of a Default, Grantor shall pay all
rents, issues and profits thereafter received by Grantor from the Property to
Beneficiary and to the extent not paid shall hold such amounts as trust funds
for the benefit of Beneficiary and such rent, issues and profits shall be deemed
"cash collateral" of Beneficiary under Title 11 of the United States Code.
<PAGE>
24. Additional Rights. The holder of any subordinate lien on the Property
shall have no right to terminate any Sublease whether or not such Sublease is
subordinate to this Deed of Trust.
25. Waivers by Grantor. (a) Grantor hereby waives all errors and
imperfections in any proceedings instituted by Trustee or Beneficiary under this
Deed of Trust, the Indenture or any other Loan Document and all benefit of any
present or future statute of limitations or any other present or future statute,
law, stay, moratorium, appraisal or valuation law, regulation or judicial
decision which, nor shall Grantor at any time insist upon or plead, or in any
manner whatsoever, claim or take any benefit or advantage of any such statute,
law, stay, moratorium, regulation or judicial decision which (i) provides for
the valuation or appraisal of the Property prior to any sale or sales thereof
which may be made pursuant to any provisions herein or pursuant to any decree,
judgment or order of any court of competent jurisdiction, (ii) exempts any of
the Property or any other property, real or personal, or any part of the
proceeds arising from any sale thereof from attachment, levy or sale under
execution, (iii) provides for any stay of execution, moratorium, marshalling of
assets, exemption from civil process, redemption or extension of time for
payment, (iv) requires Trustee or Beneficiary to institute proceedings prior to
any sale of the Property or prior to exercising any other remedy afforded
Trustee or Beneficiary hereunder in the event of a Default, (v) affects any of
the terms, covenants, conditions or provisions of this Deed of Trust, or (vi)
conflicts with or may affect, in a manner which may be adverse to Trustee or
Beneficiary, any provision, covenant, condition or term of this Deed of Trust,
the Indenture or any other Loan Document, nor shall Grantor at any time after
any sale or sales of the Property pursuant to any provision herein claim or
exercise any right under any present or future statute, law, stay, moratorium,
regulation or judicial decision to redeem the Property or the portion thereof so
sold.
(b) Grantor hereby waives the right, if any, to require any sale to be
made in parcels, or the right, if any, to select parcels to be sold, and there
shall be no requirement for marshalling of assets. Grantor hereby waives any
rights it may have under applicable law relating to the prohibition of obtaining
a deficiency judgment by Beneficiary against Grantor.
(c) GRANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY.
<PAGE>
26. Failure to Consent. If Grantor shall seek the approval by, or the
consent of, either Beneficiary or Trustee hereunder or under any other Loan
Document, and either Beneficiary or Trustee shall fail or refuse to give such
consent or approval, Grantor shall not be entitled to any damages for any
withholding or delay of such consent by either Beneficiary or Trustee, it being
intended that Grantor's sole remedy shall be to bring an action for an
injunction or specific performance, which remedy of an injunction or specific
performance shall be available only in those cases in which either Beneficiary
or Trustee has expressly agreed hereunder or under any other Loan Document not
to unreasonably withhold or delay its consent or approval. Beneficiary agrees
that, when asked for approval or consent by Grantor, Beneficiary shall act in a
manner reasonably consistent with the actions of other institutional lenders
when asked for approval or consent in transactions of the type described in the
Loan Documents.
27. No Joint Venture or Partnership. Grantor and Beneficiary intend that
the relationship created hereunder be solely that of grantor and beneficiary or
borrower and lender, as the case may be. Nothing herein is intended to create a
joint venture, partnership, tenancy-in-common, or joint tenancy relationship
between Grantor and Beneficiary nor to grant Beneficiary any interest in the
Property other than that of beneficiary or lender.
28. Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon either Grantor, Trustee or Beneficiary, or whenever
either Grantor, Trustee or Beneficiary shall desire to give or serve upon the
other any such communication with respect to this Deed of Trust or the Property,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
(a) If to Beneficiary,
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust - Trustee Administration
<PAGE>
With a copy to
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10004
Attention: Douglas R. Davis, Esq.
(b) If to Trustee,
Benjamin Grant
c/o Chicago Title Insurance Company
7616 LBJ Freeway
Dallas, Texas 75251; and
(c) If to Grantor,
Anacomp, Inc.
11550 North Meridian Street
Carmel, Indiana 46032
Attention: Vice President, Real Estate
With a copy to
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Real Estate Managing Partner
or to such other address as Grantor, Trustee or Beneficiary may substitute by
notice given as herein provided. Every notice, demand, request, consent,
approval, declaration or other communication hereunder shall be deemed to have
been duly given or served on the date on which personally delivered, with
receipt acknowledged, or three (3) days after the same shall have been deposited
with the United States mails. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to the persons designated herein to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
<PAGE>
29. Inconsistency with the Indenture. If there shall be any inconsistencies
between the terms, covenants, conditions and provisions set forth in this Deed
of Trust and the terms, covenants, conditions and provisions set forth in the
Indenture, then, unless this Deed of Trust expressly provides otherwise, the
terms, covenants, conditions and provisions of the Indenture shall prevail.
30. Substitution or Resignation of Trustee. (a) Beneficiary may, without
notice or cause and in Beneficiary's sole discretion, substitute a successor or
successors to any Trustee named herein or acting hereunder to execute this Deed
of Trust or may fill a vacancy in the position of Trustee hereunder. Upon such
appointment, and without conveyance to the successor Trustee, the latter shall
be vested with all title, powers and duties conferred upon any Trustee herein
named or acting hereunder. Each such appointment and substitution shall be made
by written instrument executed and acknowledged by Beneficiary, containing
reference to this Deed of Trust and its place of record, which, when recorded in
the office in which this Deed of Trust is recorded, shall be conclusive proof of
the proper appointment of such successor Trustee.
(b) Trustee may resign by written instrument executed by Trustee,
containing reference to this Deed of Trust and its place of record, which, when
recorded in the office in which this Deed of Trust is recorded, and when
delivered to Beneficiary in accordance with Article 26 hereof, shall be
conclusive proof of the resignation of Trustee. Upon such resignation,
Beneficiary may appoint a successor Trustee in accordance with Paragraph 28(a)
hereof.
31. Release. If the Indebtedness and Obligations are fully paid and
satisfied in accordance with the terms hereof and with the Indenture, and if the
covenants and agreements contained herein and in the Indenture and in any other
instrument securing payment of the Indebtedness and Obligations are kept and
performed, then this conveyance shall be null and void and shall be released at
the expense of Grantor.
32. No Modification; Binding Obligations. This Deed of Trust may not be
modified, amended, discharged or waived in whole or in part except by an
agreement in writing signed by Grantor and Beneficiary. The covenants, grants,
terms, agreements, provisions and conditions of this Deed of Trust shall run
with the Land and shall bind Grantor and the heirs, distributees, personal
representatives, successors and assigns of Grantor and all present and
subsequent owners, encumbrancers, lessees and sublessees of any of the Property
and shall inure to the benefit of Beneficiary and its respective successors,
assigns and endorsees.
<PAGE>
33. Miscellaneous. The Article headings in this Deed of Trust are used only
for convenience and are not part of this Deed of Trust and are not to be used in
determining the intent of the parties or otherwise in interpreting this Deed of
Trust. As used in this Deed of Trust, the singular shall include the plural as
the context requires and the following words and phrases shall have the
following meanings: (a) "provisions" shall mean "provisions, terms, covenants
and/or conditions"; (b) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage and/or deed of trust"; (c) "obligation" shall mean
"obligation, duty, covenant and/or condition"; (d) "any of the Property" shall
mean "the Property or any portion thereof or interest therein"; (e) "Person"
shall mean "any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, institution,
public benefit corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, but without limiting the
generality of the foregoing, any instrumentality division, agency, body or
department thereof)"; (f) "Stock" shall mean "all shares, options, interests,
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including, but
without limiting the generality of the foregoing, common stock, preferred stock,
and warrants or options for any of the foregoing"; and (g) "Subsidiary" shall
mean, with respect to any Person, "any corporation of which an aggregate or more
that fifty percent (50%) of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, Stock of any other class or classes of such corporation
shall have or may have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned by such Person and/or
more Subsidiaries of such Person." Any act which Trustee or Beneficiary is
permitted to perform under this Deed of Trust, the Indenture or any other Loan
Document may be performed at any time and from time to time by Trustee or
Beneficiary or by any person or entity designated by Trustee or Beneficiary, as
the case may be. Any act which is prohibited to Grantor under this Deed of
Trust, the Indenture or any other Loan Document is also prohibited to all
lessees of any of the Property. Each appointment of Beneficiary as
attorney-in-fact for Grantor under this Deed of Trust, the Indenture or any
other Loan Document shall be irrevocable and coupled with an interest.
Beneficiary shall have the right to refuse to grant its consent, approval or
acceptance or to indicate its satisfaction whenever such consent, approval,
acceptance or satisfaction shall be required under any of the Loan Documents.
<PAGE>
34. Enforceability. This Deed of Trust shall be governed by, and construed
in accordance with, the laws of the State in which the Property is located
without regard to principles of conflicts of laws, except that the laws of the
State of New York (without regard to principles of conflicts of laws) shall
govern the resolution of issues arising under the Indenture to the extent that
such resolution is necessary to the interpretation of this Deed of Trust.
Whenever possible, each provision of this Deed of Trust shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Deed of Trust shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
Deed of Trust. Nothing in this Deed of Trust or in any other Loan Documents
shall require Grantor to pay, or Beneficiary to accept, interest in an amount
which would subject Beneficiary to penalty under applicable law. In the event
that the payment of any interest due hereunder or under any of the other Loan
Documents or a payment which is deemed interest, exceeds the maximum amount
payable as interest under the applicable usury laws, such excess amount shall be
applied to the reduction of the Indebtedness, and upon payment in full of the
Indebtedness, shall be applied to the performance of the Obligations, and upon
performance in full of the Obligations, shall be deemed to be a payment made by
mistake and shall be refunded to Grantor.
35. Receipt of Copy. Grantor acknowledges that it has received a true copy
of this Deed of Trust.
36. Additional Provisions. It shall be lawful for the Trustee, or
Beneficiary, at its election, upon the occurrence of a Default, to commerce an
action for the foreclosure of this Deed of Trust and to proceed thereon to
judgment and execution for the recovery of all sums payable by Grantor pursuant
to the terms of this Deed of Trust without further stay, any law, usage or
custom to the contrary notwithstanding.
Notwithstanding the appointment of any receiver, liquidator or trustee of
Grantor, or of any its Property, or of the Property, or any part thereof, the
Trustee shall be entitled to retain possession and control of all property now
or hereafter held under this Deed of Trust.
Grantor hereby waives and relinquishes unto, and in favor of, Beneficiary,
all benefit under all laws, now in effect or hereafter passed, to relieve
Grantor in any manner from the obligations assumed and the obligation for which
this Deed of Trust is security or to reduce the amount of the said obligation to
any greater extent than the amount actually paid for the Property, in any
judicial proceedings upon the said obligation, or upon this Deed of Trust.
<PAGE>
If Grantor shall default in the payment of any sums due pursuant to the
terms of the Loan Documents (as that terms is defined in the or this Deed of
Trust, such default shall be, and be deemed to be, an attempt by Grantor to
avoid the prepayment premium payable pursuant to the terms of the Loan Documents
and upon such default Beneficiary shall be entitled to collect such prepayment
premium from Grantor with the same effect as if Grantor had voluntarily elected
to prepay the principal sum evidenced by the Loan Documents.
Neither Grantor nor any other person now or hereafter obligated for payment
for all or any part of the indebtedness secured hereby shall be relieved of such
obligation by reason of the failure of Beneficiary to comply with any request of
Grantor or of any other person so obligated to take action to foreclose on this
Deed of Trust or otherwise enforce any provisions hereof or of the under the
Loan Documents or by reason of the release, regardless of consideration, of all
or any part of the security held for the indebtedness secured hereby, or by
reason of any agreement or stipulation between any subsequent owner of the
Property and Beneficiary extending the time of payment or modifying the terms
hereof without first having obtained the consent of Grantor or such other
person; and in the latter event Grantor and all other such persons shall
continue to be liable to make payment according to the terms of any such
extension or modification agreement, unless expressly released and discharged in
writing by Beneficiary.
Grantor shall pay to Beneficiary the maximum amount as may from time to
time be permitted by law for furnishing in connection with the obligations
secured hereby, each statement pursuant to any statute at the time then in
force. Grantor shall pay Beneficiary's and Trustee's fees, charges and expenses
for any other statement, information or services furnished by Beneficiary or
Trustee in connection with the obligations secured hereby. Said services may
include, but shall not be limited to, the processing by Beneficiary or Trustee,
or both, of assumption, substitutions, modifications, extensions, renewals,
subordinations, rescissions, changes of owner, recordation of map, plat or
record of survey, grants of easements, and full and partial reconveyances, and
the obtaining by Beneficiary of any policies of insurance pursuant to any of the
provisions contained in this Deed of Trust.
No offset or claim which Grantor now or may in the future have against
Beneficiary shall relieve Grantor from paying sums due or performing any other
obligation herein or secured by.
<PAGE>
To the extent that the grant to the Trustee shall be ineffective, this Deed
of Trust is a mortgage with power of sale, with Grantor being the mortgagor and
Beneficiary being the mortgagee, and Beneficiary shall be entitled to all of the
rights of the Trustee hereunder with respect to the enforcement of this
instrument and the power of sale granted hereunder.
Simultaneously with, and in addition to, the execution of this Deed of
Trust, Grantor has executed and delivered as security for the Indenture a
mortgage or deed of trust on parcels of property located in other states, which
conforms to the laws, customs and practices of the jurisdiction in which each of
such parcels is located and within which such mortgage or deed of trust is being
recorded. Grantor agrees that the occurrence of an Default hereunder, or under
any of such other mortgages or deeds of trusts, shall be an Default under each
and every one of such mortgages and deeds of trust, including this Deed of
Trust, permitting Beneficiary to proceed against any or all of the property
comprising the Property or against any other security for the Indenture in such
order as Beneficiary in its sole and absolute discretion may determine. Grantor
hereby waives, to the extent permitted by applicable law, the benefit of any
statute or decision relating to the marshalling of assets which is contrary to
the foregoing. Beneficiary shall not be compelled to release or be prevented
from foreclosing this instrument or any other instrument securing the Indenture
unless all Indebtedness evidenced by the Indenture and all items hereby secured
shall have been paid in full and Beneficiary shall not be required to accept any
part or parts of any property securing the Indenture as distinguished from the
entire whole thereof, as payment of or upon the Indenture to the extent of the
value of such part or parts, and shall not be compelled to accept or allow any
apportionment of the indebtedness evidenced by the Indenture to or among any
separate parts of said property.
IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be duly
executed and acknowledged under seal the day and year first above written.
(Corporate Seal) ANACOMP, INC., Grantor
By:/s/
----------------------------
Name:
Title:
<PAGE>
STATE OF ----------------)
)
COUNTY OF ---------------)
The foregoing instrument was acknowledged before me this ---- day of
- - ------------------, 1996 by ----------------------, [Vice] President of ANACOMP,
Inc., an Indiana corporation, on behalf of said corporation.
WITNESS my hand and official seal.
---------------------
Notary Public
[SEAL]
<PAGE>
Page 1
Exhibit A
----------
Description of the Land
FIRST TRACT:
Being 8.444 acres out of Eli Sherrill Survey, Abstract Number 271, and the J.E.
Jones Survey Abstract No. 164, in Young County, Texas, and being a part of a
10.0 acre tract described in Deed from Graham Benevolent Foundation to Earl
Region et al Recorded in Volume 414, Page 63, Deed Records of Young County,
Texas and described as follows:
BEGINNING at spike in North Boundary Line of F.M. Highway No. 2179 (formerly
Texas Highway No. 24) at the intersection of North line of Highway with South
Boundary Line of Old Jacksboro Road;
THENCE with the South Boundary Line of Old Jacksboro Road N 32-53 W 120.5 feet
to spike and N 89-30 W 889.0 feet to spike for northwest corner of this tract
and northeast corner of West 60 feet (1.025 acres) of said 10.0 acre tract;
THENCE South with east line of 1.025 acre tract 524.7 feet to spike for
northwest corner of 0.531 acre tract;
THENCE East 154.02 feet to spike for northeast corner of 0.531 acre tract;
THENCE South 100.61 feet to spike in North line of F.M. Highway No. 2179 at
Southeast corner of 0.531 acre tract;
THENCE N 57-10 E with north line of Highway 952.6 feet to the PLACE OF
BEGINNING; and being all of said 10.0 acres
SAVE & EXCEPT: the West 60 feet of said 10.0 acre tract described in Deed to
City of Graham, recorded in Volume 732, Page 185, Deed Records of Young County,
Texas, and containing 1.025 acres; and SAVE & EXCEPT: 0.531 acre described as
follows:
BEGINNING in South line of said 10 acres at the southeast corner of the West 60
feet (1.025 acres) of said 10 acres, and being 71.4 feet N 57-10 E of the
southwest corner of said 10 acres;
THENCE North with east line of 1.025 acres 200 feet to spike;
THENCE East 154.02 feet to spike;
THENCE South 100.61 feet to spike in North line of Highway;
THENCE S 57-10 W 183.30 feeet to the PLACE OF BEGINNING.
SECOND TRACT:
Being 4.13 acres out of Eli Sherrill Survey, Abstract Number 271, in Young
County, Texas, being the same land described in Deed from Parameter Purchases,
Inc. to Graham Magnetics, Inc., recorded in Volume 638, Page 16, Deed Records of
Young County, Texas described as follows:
BEGINNING at corner in North Boundary Line of Old Jacksboro Road 350 feet West
of the EBL of said Sherrill Survey, and also being 100 feet North & 748.5 feet S
89-30 E of the Northwest corner of 10.0 acre tract described in Deed from Graham
Benevolent Foundation to Earl Region et al, recorded in Vol. 414, Pg. 3, Deed
Records of Young County, Texas;
<PAGE>
Page 2
DESCRIPTION
THENCE N 89-30 W with north line of Old Jacksboro Road 300 feet to iron rod for
corner;
THENCE N 0-30 E 600 feet to corner;
THENCE S 89-30 E 300 feet to corner;
THENCE S 0-30-W 600 feet to PLACE OF BEGINNING.
THIRD TRACT:
Being 5.20 acres out of Eli Sherrill Survey, Abstract Number 271, in Young
County, Texas, being the same land described in Deed from Parameter Purchases,
Inc. to Graham Magnetics, Inc., recorded in Volume 638, Page 16, Deed Records of
Young County, Texas described as follows:
BEGINNING at the southeast corner of said 4.13 acres described in SECOND TRACT
above;
THENCE N 0-30 E 600 feet to northeast corner of said 4.13 acre tract;
THENCE S 89-30 E 396.1 feet to east line of Sherrill Survey;
THENCE S 0-18 W with east line of Sherrill Survey 229.7 feet to corner;
THENCE West 17 feet to corner;
THENCE S 6-00 W 411 feet to corner in North Boundary line of Old Jacksboro Road;
THENCE with North Line of Jacksboro Road N 65-45 W 96.5 feet and N 89-30 W 252
feet to the PLACE OF BEGINNING.
FOURTH TRACT:
Being 1.648 acres out of Eli Sherrill Survey, Abstract Number 271, in Young
County, Texas, being more particulalry described as follows:
BEGINNING in South Boundary Line of Old Jacksboro Road 448.5 feet S 89-30 E of
the Northwest corner of 10 acre tract described in Deed from Graham Benevolent
Foundation to East Region et al recorded in Vol. 414, pg 63, Deed Records of
Young County, Texas;
THENCE North 100 feet to iron rod at southwest corner of 4.13 acre tract
described in SECOND TRACT;
THENCE following south line of said 4.13 acres and 5.20 acres described in THIRD
TRACT S 89-30 E 552 feet and S 65-45 E 96.5 feet to spike;
THENCE S 5-19-34 E 107.3 feet to spike on North Boundary Line of F.M. Highway
No. 2179;
THENCE S 57-10 W 100 feet to east corner of 8.444 acres described in FIRST
TRACT;
THENCE following north line of 8.44 acres N 32-53 W 120.50 feet and N 89-30 W
500.5 feet to the PLACE OF BEGINNING, and being the same land described in Deed
from the City of Graham, recorded in Volume 732, Page 186, Deed Records of Young
County, Texas.
<PAGE>
Exhibit B - Description of the Subleases
----------------------------------------
<PAGE>
Exhibit C - Permitted Encumbrances
----------------------------------
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
COMMON STOCK REGISTRATION RIGHTS AGREEMENT dated as of June 4, 1996 (this
"Agreement"), by and among ANACOMP, INC., an Indiana corporation (the
"Company"), and the Holders (as hereinafter defined) of Registrable Shares (as
hereinafter defined) who are parties to this Agreement.
This Agreement is being entered into in accordance with the Plan (as
hereinafter defined) in connection with the acquisition of Common Stock (as
hereinafter defined) by certain holders (the "Original Holders") pursuant to the
Plan. Each Original Holder owns the aggregate number of shares of Common Stock
specified with respect to such Original Holder in Schedule A hereto as such
Schedule A may be amended from time to time.
The Company has undertaken to register the Registrable Shares under the
Securities Act (as hereinafter defined) and to take certain other actions with
respect to the Registrable Shares. This Agreement sets forth the terms and
conditions of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the United States Securities and Exchange Commission, or
any successor agency.
<PAGE>
"Common Stock" means up to 10,000,000 shares of the Company's Common Stock,
par value $.01 per share, to be issued pursuant to the Plan, and includes any
securities of the Company issued or issuable with respect to such securities by
way of a stock split, recapitalization, merger, consolidation or other
reorganization or otherwise.
"Effective Date" means the effective date of the Plan pursuant to the terms
thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
"Expenses" means all expenses incident to the Company's performance of or
compliance with its obligations under this Agreement, including, without
limitation, all registration, filing, listing, securities exchange and NASD
fees, all fees and expenses of complying with state securities or blue sky laws
(including fees, disbursements and other charges of counsel for the underwriters
in connection with blue sky filings), all word processing, duplicating and
printing expenses, messenger and delivery expenses, all rating agency fees, the
fees, disbursements and other charges of counsel for the Company and of its
independent public accountants, including the expenses incurred in connection
with "comfort" letters required by or incident to such performance and
compliance, any fees and disbursements of underwriters customarily paid by
issuers and sellers of securities and the reasonable fees and disbursements of
one firm of counsel (per registration prepared) chosen by the Holders of a
majority of the outstanding Registrable Shares with respect to disclosure
matters relating to the selling securityholders and the plan of distribution,
but excluding underwriting discounts and commissions and applicable transfer
taxes, if any, which discounts, commissions and transfer taxes shall be borne by
the seller or sellers of Registrable Shares in all cases.
"Holder" means (i) the Original Holders and (ii) any transferees of the
Registrable Shares (x) whose shares of Common Stock continue to be Registrable
Shares and (y) who have been assigned the Transferor's rights under Section 12
hereof.
"Initial Shelf Registration" has the meaning set forth in Section 2 hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.
<PAGE>
"Plan" means the Third Amended Joint Plan of Reorganization under Chapter
11 of the United States Bankruptcy Code for Anacomp, Inc. and certain of its
subsidiaries filed with the United States Bankruptcy Court for the District or
Delaware and confirmed by such court on May 20, 1996, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof.
"Public Offering" means a public offering and sale of securities pursuant
to an effective registration statement under the Securities Act.
"Registrable Shares" means the shares of Common Stock held by the Original
Holders (and Transferees of such Registrable Shares which are "Holders"
hereunder); provided, however, that Registrable Shares shall cease to be
Registrable Shares upon (i) any sale or distribution thereof pursuant to a
registration statement; (ii) any sale or distribution thereof following which
the recipient thereof is permitted to sell such shares without restriction under
the Securities Act and any state securities laws; or (iii) the receipt by a
Holder of shares of Common Stock of an opinion, satisfactory in form and
substance to such Holder, by legal counsel, reasonably acceptable to such
Holder, to the effect that the public sale of such shares of Common Stock
without restriction under the Securities Act and any state securities laws does
not require the registration of such shares of Common Stock under the Securities
Act and any state securities laws.
"Registration Statement" means a registration statement filed with the
Commission under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Subsequent Shelf Registration" has the meaning set forth in Section 2
hereof.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation or
other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
2. Registration Under the Securities Act.
(a) Initial Shelf Registration. The Company shall (i) cause to
be filed as soon as practicable, but not later than 45 days after the
Effective Date (or such longer time as may be required for the Company
to prepare the necessary financial statements), a Registration
Statement for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act (the "Initial Shelf Registration")
covering all of the Registrable Shares and providing for the sale of
the Registrable Shares by the Holders thereof and (ii) use its best
efforts to have such Initial Shelf Registration declared effective by
the Commission as promptly as practicable thereafter.
<PAGE>
(b) Subsequent Shelf Registrations. If the Company determines
to terminate the effectiveness of the Initial Shelf Registration prior
to the end of the Effectiveness Period (as defined in Section 2(d)
hereof), then prior to such termination the Company shall file, and
shall use its best efforts to cause the Commission to declare
effective, a subsequent Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 under the Securities
Act (a "Subsequent Shelf Registration") covering all of the Registrable
Shares which then remain outstanding. The Subsequent Shelf Registration
shall be filed by the Company at such time prior to the termination of
the effectiveness of the Initial Shelf Registration which is reasonably
calculated to cause the Subsequent Shelf Registration to become
effective on or before the date on which the effectiveness of the
Initial Shelf Registration terminates.
(c) Amendments to Initial Shelf Registration or Subsequent
Shelf Registrations. If the Initial Shelf Registration (except as
provided in Section 2(b)) or any Subsequent Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness
Period (as defined in Section 2(d) hereof) for any reason (other than
because of the sale of all of the Registrable Shares covered thereby),
the Company shall use its best efforts to obtain the prompt withdrawal
of any order suspending the effectiveness thereof or take such other
actions as may be necessary to reinstate the effectiveness thereof, and
in any event shall, within 60 days of such cessation of effectiveness,
either (i) amend such Initial Shelf Registration or Subsequent Shelf
Registration in a manner reasonably calculated to obtain the withdrawal
of the order suspending the effectiveness thereof, or (ii) file a
Subsequent Shelf Registration covering all Registrable Shares which
remain unsold. (Each of the Initial Shelf Registration and any
Subsequent Shelf Registration filed pursuant to paragraph 2(b) or this
paragraph 2(c) are referred to individually herein as a "Shelf
Registration" and collectively as the "Shelf Registrations").
(d) Effectiveness Period. Subject to Section 3 hereof, the
Company shall use its best efforts to keep the Shelf Registration
(including the Initial Shelf Registration and/or any Subsequent Shelf
Registration) continuously effective under the Securities Act for a
period of three (3) years following the date on which the Initial Shelf
Registration became effective (the "Effectiveness Period"), or such
shorter period ending when all Registrable Shares covered by the
Initial Shelf Registration have been sold; provided, however, that the
Effectiveness Period shall be extended by any period during which a
Shelf Registration is not in effect or during which sales have been
suspended, whether pursuant to Section 3, Section 5(g) hereof or
otherwise. If a Subsequent Shelf Registration is filed, pursuant to
Section 2(b) or 2(c) hereof, the Company shall use its best efforts to
cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period after such effectiveness
equal to the Effectiveness Period, less the aggregate number of days
during which the Initial Shelf Registration or any Subsequent Shelf
Registration was previously in effect. The intent of this provision is
that the Shelf Registration (including the Initial Shelf Registration
and/or any Subsequent Shelf Registration) shall be in effect for a
number of days, in aggregate, equal to three (3) years; provided,
however, that a Shelf Registration shall not be required to be
maintained in effect after none of the shares of Common Stock eligible
to be included in a Shelf Registration are Registrable Shares.
<PAGE>
(e) Supplements and Amendments. The Company shall supplement
or amend the Shelf Registration if (i) required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration, (ii) otherwise required by the Commission,
or (iii) requested to do so by any Holder of Registrable Notes to the
extent necessary to list such Holder as a selling securityholder in
such registration statement.
3. Blackout Periods. With respect to a Shelf Registration filed or to be
filed pursuant to Section 2 hereof, if the Board of Directors of the Company
shall determine, in its good faith reasonable judgment, that to maintain the
continued effectiveness of such Shelf Registration or to permit such Shelf
Registration to become effective (or if no Shelf Registration has yet been
filed, to file such Shelf Registration) would be significantly disadvantageous
to the Company's financial condition, business or prospects (a "Disadvantageous
Condition") in light of the existence, or in anticipation, of (i) any
acquisition or financing activity involving the Company, or any subsidiary of
the Company, including a proposed public offering, (ii) an undisclosed material
event, the public disclosure of which would have a material adverse effect on
the Company, (iii) a proposed material transaction involving the Company or a
substantial amount of its assets, or (iv) any other circumstance or condition
the disclosure of which would materially disadvantage the Company, and the
existence of which renders any Shelf Registration to be filed, or any Shelf
Registration then filed or effective, inadequate as failing to include material
information, then the Company may, until such Disadvantageous Condition no
longer exists (but not with respect to more than four occasions nor for more
than 180 days in the aggregate nor involving more than 60 days in the aggregate
during any continuous 12-month period) cause such Shelf Registration to be
withdrawn and/or cause the right of Holders to make dispositions of Registrable
Shares pursuant to such Shelf Registration to be suspended, or, in the case of a
Shelf Registration that has not yet been filed, elect not to file such Shelf
Registration; provided, however, that the Company may not take any such action
<PAGE>
unless it simultaneously takes similar action with respect to any other
Registration Statements of the Company that are then effective or that are
contemplated or required to be filed. If the Company determines to take any
action pursuant to the preceding sentence, the Company shall deliver a notice to
any Holder of Registrable Shares covered or to be covered under such Shelf
Registration, which indicates that the Shelf Registration is no longer effective
or usable or will not be filed. Upon the receipt of any such notice, such
Persons shall forthwith discontinue any sale of Registrable Shares pursuant to
such Shelf Registration and any use of the prospectus contained in such Shelf
Registration. If any Disadvantageous Condition shall cease to exist, the Company
shall promptly notify any Holders who shall have ceased selling Registrable
Shares pursuant to an effective Shelf Registration as a result of such
Disadvantageous Condition, indicating such cessation and disclosing in
reasonable detail the nature and outcome of such Disadvantageous Condition. The
Company shall, if any Shelf Registration required to be filed or maintained
under this Agreement has been withdrawn or not filed, file promptly, at such
time as it in good faith deems the earliest practicable time, a new Shelf
Registration covering the Registrable Shares that were covered by such withdrawn
Shelf Registration or to be covered by such unfiled Shelf Registration.
4. Expenses. The Company shall promptly pay all Expenses in connection with
any registration initiated pursuant to Section 2 or Section 3 hereof, whether or
not such registration becomes effective.
5. Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Section 2
hereof, the Company shall, as expeditiously as possible (subject to Section 3
hereof):
(a) promptly prepare and file with the Commission the
requisite registration statement to effect such registration and
thereafter use its reasonable best efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities that are not Registrable
Shares at any time prior to the effective date of the registration
statement relating thereto;
<PAGE>
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the offering of all Registrable Shares covered by
such registration statement until the end of the Effectiveness Period
or, if earlier, such time as all of such Registrable Shares have been
disposed of in accordance with the method of disposition set forth in
such registration statement;
(c) furnish to each seller of Registrable Shares covered by
such registration statement such number of copies of such registration
statement and of each amendment and supplement thereto (in each case
including all exhibits and any documents incorporated by reference),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus, each final prospectus
and any supplement to any prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in writing;
(d) use its best efforts (i) to register or qualify all
Registrable Shares and other securities covered by such registration
statement under such other securities or blue sky laws of such states
or other jurisdictions of the United States of America as the Holders
of a majority of the Registrable Shares covered by such registration
statement shall reasonably request in writing, (ii) to keep such
registration or qualification in effect for so long as such
registration statement remains in effect and (iii) to take any other
action that may be reasonably necessary or advisable to enable the
sellers of Registrable Shares to consummate the disposition in such
jurisdictions of the securities to be sold by such sellers, except that
the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subsection (d) be
obligated to be so qualified, to subject itself to taxation in such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause all Registrable Shares
covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Company and counsel to the sellers of Registrable Shares to enable such
sellers to consummate the offering of such Registrable Shares;
<PAGE>
(f) use its good faith efforts to obtain and, if obtained,
furnish a copy to each seller of Registrable Shares of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement, reasonably
satisfactory in form and substance to counsel to the Holders
chosen by Holders of a majority of the Registrable Shares being
registered, and
(iii) ( a "comfort" letter, dated the effective date of
such registration statement, signed by the independent public
accountants who have certified the Company's financial statements
included or incorporated by reference in such registration
statement, reasonably satisfactory in form and substance to
counsel to the Holders chosen by Holders of a majority of the
Registrable Shares being registered,
in each case, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements and matters
contained in such registration statement, as are customarily covered in
opinions of issuer's counsel and in accountants' comfort letters
delivered to selling securityholders in connection with the sale of
securities pursuant to "shelf" registration statements;
(g) notify the sellers of Registrable Shares under the Shelf
Registration (providing, if requested by any such Persons, confirmation
in writing) as soon as practicable after becoming aware of: (A) the
filing of any prospectus or prospectus supplement or the filing or
effectiveness (or anticipated date of effectiveness) of such
registration statement or any post-effective amendment thereto; (B) any
request by the Commission for amendments or supplements to such
registration statement or the related prospectus or for additional
information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the
initiation of any proceedings for the purpose; (D) the receipt by the
Company of any notification with respect to the suspension of the
qualification or registration (or exemption therefrom) of any
Registrable Securities for sale in any jurisdiction in the United
States or the initiation or threatening of any proceeding for such
purposes; or (E) the happening of any event that makes any statement
made in such registration statement or in any related prospectus,
prospectus supplement, amendment or document incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in such registration statement or in any such prospectus,
supplement, amendment or other such document so that it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein (in the case of any prospectus in the light of the
circumstances under which they were made) not misleading;
<PAGE>
(h) otherwise comply with all applicable rules and
regulations of the Commission and any other governmental agency or
authority having jurisdiction over the offering, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;
(i) enter into customary agreements and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable Shares included in such
registration statement;
(j) make every reasonable effort to obtain the withdrawal of
any order or other action suspending the effectiveness of any such
registration statement or suspending the qualification or registration
(or exemption therefrom) of the Registrable Securities for sale in any
jurisdiction;
(k) if any event described in subsection (g) hereof occurs,
use its best efforts (subject to Section 3 hereof) to cooperate with
the Commission to prepare, as soon as practicable, any amendment or
supplement to such registration statement or such related prospectus in
order that such registration statement and prospectus, as so amended or
supplemented, shall not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or to take other action
that may have been requested by the Commission; and
(l) use its best efforts to cause all such Registrable Shares
covered by such registration statement to be listed on any national
securities exchange or included in any automated quotation system on
which securities of the same class issued by the Company are then
listed or included (if the listing or inclusion of such Registrable
Shares is then permitted under the rules of such exchange or
interdealer quotation system).
<PAGE>
It shall be a condition precedent to the obligations of the Company to take
action pursuant to this Agreement that the selling Holders shall furnish to the
Company in writing such information regarding themselves and the Registrable
Shares held by them, and the intended method of disposition of such securities,
as shall be required to effect the registration of their Registrable Shares.
Following a registration pursuant to Section 2 hereof, each Holder agrees
that as of the date that a final prospectus is made available to it for
distribution to prospective purchasers of Registrable Shares it shall cease to
distribute copies of any preliminary prospectus prepared in connection with the
offer and sale of such Registrable Shares. Each Holder further agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in subsection (g) of this Section 5, such Holder shall forthwith
discontinue such Holder's disposition of Registrable Shares pursuant to the
registration statement relating to such Registrable Shares until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (k) of this Section 5 and, if so directed by the Company, shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession of the prospectus
relating to such Registrable Shares current at the time of receipt of such
notice.
6. Preparation; Reasonable Investigation.
(a) Registration Statements. In connection with the
preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company shall give each
Holder of Registrable Shares registered under such registration
statement, the underwriters, if any, and its respective counsel and
accountants the reasonable opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and shall give each of them such reasonable access
to its books and records and such reasonable opportunities to discuss
the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall
be necessary, in the reasonable opinion of any such Holders' and such
underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
<PAGE>
(b) Confidentiality. Each Holder of Registrable Shares shall
maintain the confidentiality of any confidential information received
from or otherwise made available by the Company to such Holder of
Registrable Shares pursuant to this Agreement and identified in writing
by the Company as confidential and shall enter into such
confidentiality agreements as the Company shall reasonably request.
Information that (i) is or becomes available to a Holder of Registrable
Shares from a public source, (ii) is disclosed to a Holder of
Registrable Shares by a third-party source whom the Holder of
Registrable Shares reasonably believes has the right to disclose such
information or (iii) is or becomes required to be disclosed by a Holder
of Registrable Shares by law, including, but not limited to,
administrative or court orders, shall not be deemed to be confidential
information for purposes of this Agreement; provided, however, that to
the extent sufficient time is available prior to such disclosure being
required to be made pursuant to clause (iii) hereof, the Holders of
Registrable Shares shall (to the extent not legally prohibited from
doing so) promptly notify the Company of any request for disclosure and
any proposed disclosure pursuant to such clause (iii). The Holders of
Registrable Shares shall not grant access, and the Company shall not be
required to grant access, to information under this Section 6 to any
Person who will not agree to maintain the confidentiality (to the same
extent a Holder is required to maintain the confidentiality) of any
confidential information received from or otherwise made available to
it by the Company or the holders of Registrable Shares under this
Agreement and identified in writing by the Company as confidential.
<PAGE>
7. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof, the Company shall, and hereby agrees to, indemnify and hold
harmless, each Holder and seller of any Registrable Shares covered by
such registration statement and each other Person, if any, who controls
such Holder or seller, and their respective directors, officers,
partners, agents and Affiliates (each, a "Company Indemnitee" for
purposes of this Section 7(a)), against any losses, claims, damages,
liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof and whether or not such Company
Indemnitee is a party thereto), joint or several, and expenses,
including, without limitation, the reasonable fees, disbursements and
other charges of legal counsel and reasonable out-of-pocket costs of
investigation, to which such Company Indemnitee may become subject
under the Securities Act or otherwise (collectively, a "Loss" or
"Losses"), insofar as such Losses arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which Registrable Shares
were registered pursuant to this Agreement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto (collectively, "Offering Documents"),
or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein in the light of the circumstances in which they were made not
misleading; provided, however, that the Company shall not be liable in
any such case to the extent that any such Loss arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such Offering Documents in reliance upon
and in conformity with written information furnished to the Company
through an instrument duly executed by or on behalf of such Company
Indemnitee specifically stating that it is expressly for use therein;
and provided, further, that the Company shall not be liable to any
Holder or seller of Registrable Shares or any other Person, if any, who
controls such Person, in any such case to the extent that any such Loss
arises out of such Person's failure to send or give a copy of the final
prospectus (including any documents incorporated by reference therein),
as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale
of Registrable Shares to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf
of such Company Indemnitee and shall survive the transfer of such
securities by such Company Indemnitee.
(b) Indemnification by the Sellers. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof in which a Holder has registered for sale Registrable Shares,
each such Holder or seller of Registrable Shares, severally and not
jointly, shall, and hereby agrees to, indemnify and hold harmless the
Company and each of its directors, officers, employees and agents, each
other Person who participates as an underwriter in the offering or sale
of such securities, each other Person, if any, who controls the
Company, any such underwriter and each other seller (within the meaning
of the Securities Act) and such underwriter's or other seller's
directors, officers, stockholders, partners, employees, agents and
affiliates (each a "Holder Indemnitee" for purposes of this Section
7(b)), against all Losses insofar as such Losses arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any Offering Documents (or any document
incorporated by reference therein) or any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of circumstances
in which they were made not misleading, if such untrue statement or
<PAGE>
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Holder or seller of Registrable
Shares specifically stating that it is expressly for use therein;
provided, however, that the liability of such indemnifying party under
this Section 7(b) shall be limited to the amount of the net proceeds
received by such indemnifying party in the offering giving rise to such
liability. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Holder
Indemnitee and shall survive the transfer of such securities by such
Holder.
(c) Notices of Losses, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Loss referred to in the preceding subsections of
this Section 7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subsections of this Section 7, except
to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against
an indemnified party, the indemnifying party shall be entitled to
participate in and, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Loss, to assume and
control the defense thereof, in each case at its own expense, jointly
with any other indemnifying party similarly notified, to the extent
that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from such indemnifying party of its
assumption of the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any such action or
proceeding effected without its written consent, which shall not be
unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such Loss or which
requires action on the part of such indemnified party or otherwise
subjects the indemnified party to any obligation or restriction to
which it would not otherwise be subject.
<PAGE>
(d) Contribution. If the indemnification provided for in this
Section 7 shall for any reason be unavailable to an indemnified party
under subsection (a) or (b) of this Section 7 in respect of any Loss,
then, in lieu of the amount paid or payable under subsection (a) or (b)
of this Section 7, the indemnified party and the indemnifying party
under subsection (a) or (b) of this Section 7 shall contribute to the
aggregate Losses (including legal or other expenses reasonably incurred
in connection with investigating the same) in such proportion as is
appropriate to reflect the relative fault of the Company and the
sellers of Registrable Shares covered by the registration statement
which resulted in such Loss or action in respect thereof, with respect
to the statements, omissions or action which resulted in such Loss or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission. The parties hereto agree that it would not be
just and equitable if contributions were to be determined by any method
of allocation which does not take account of the equitable
considerations referred to in this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and
other expenses reasonably incurred by such indemnified party in
connection with investigation or defending any Loss which is the
subject of this paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In addition, no
Person shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action or Loss effected without such
Person's consent.
(e) Other Indemnification. The Company and, in connection
with any registration statement filed by the Company pursuant to
Section 2, each Holder shall with respect to any required registration
or other qualification of securities under any Federal or state law or
regulation of any governmental authority other than the Securities Act,
indemnify Holder Indemnitees and Company Indemnitees, respectively,
against Losses, or, to the extent that indemnification shall be
unavailable to a Holder Indemnitee or Company Indemnitee, contribute to
the aggregate Losses of such Holder Indemnitee or Company Indemnitee in
a manner similar to that specified in the preceding subsections of this
Section 7 (with appropriate modifications).
<PAGE>
(f) Indemnification Payments. The indemnification and
contribution required by this Section 7 shall be made by periodic
payments of the amount thereof during the course of any investigation
or defense, as and when bills are received or any Loss is incurred.
8. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act or the
Exchange Act, such rights shall not be in conflict with or adversely affect any
of the rights provided in this Agreement to the holders of Registrable Shares.
9. Adjustments Affecting Registrable Shares. The Company shall not effect
or permit to occur any combination, subdivision or reclassification of
Registrable Shares that would materially adversely affect the ability of the
Holders to include such Registrable Shares in any registration of its securities
under the Securities Act contemplated by this Agreement or the marketability of
such Registrable Shares under any such registration or other offering.
10. Rule 144 and Rule 144A. Prior to the expiration of the Effectiveness
Period, the Company shall take all actions reasonably necessary to enable
Holders to sell Registrable Shares without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, (b) Rule 144A
under the Securities Act, as such Rule may be amended from time to time, or (c)
any similar rules or regulations hereafter adopted by the Commission, including,
without limiting the generality of the foregoing, filing on a timely basis all
reports required to be filed under the Exchange Act. Upon the request of any
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
11. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company shall have obtained the prior written consent of either (i)
the Holders of at least a majority of the Registrable Shares affected by such
amendment, modification or waiver or (ii) each Holder of Registrable Shares
owning more than 5% of the Company's outstanding Common Stock.
<PAGE>
12. Nominees for Beneficial Owners. In the event that any Registrable Share
is held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its election in writing delivered to the Company, be treated as
the Holder of such Registrable Share for purposes of any request or other action
by any Holder or Holders pursuant to this Agreement or any determination of the
number or percentage of Registrable Shares held by any Holder or Holders
contemplated by this Agreement. If the beneficial owner of any Registrable
Shares so elects, the Company may require assurances reasonably satisfactory to
it of such owner's beneficial ownership of such Registrable Shares.
13. Assignment. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns including any successor by merger to the Company. Any
Holder may assign to any permitted Transferee of its Registrable Shares holding
Registrable Shares its rights and obligations under this Agreement, provided
that such Transferee shall deliver to the Company prior to such assignment a
written instrument in which such Transferee agrees to be bound by this Agreement
as if it were an original party hereto, whereupon such Transferee shall for all
purposes be deemed to be a Holder under this Agreement.
14. Calculation of Percentage of Outstanding Registrable Shares. For
purposes of this Agreement, all references to an aggregate number of Registrable
Shares or a percentage thereof shall be calculated based upon the aggregate
number of Registrable Shares outstanding at the time such calculation is made
and shall exclude any Registrable Shares or shares of Common Stock, as the case
may be, owned by the Company or any subsidiary of the Company.
15. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall
execute such documents and other papers and perform such further acts
as may be reasonably required or desirable to carry out the provisions
of this Agreement and the transactions contemplated hereby.
(b) Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the
meaning or construction of any provisions hereof.
(c) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and the Company hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.
<PAGE>
(d) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions,
promises, representations, warranties, covenants, or undertakings with
respect to the subject matter hereof, other than those expressly set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties hereto with respect
to the subject matter hereof.
(e) Notices. Any notices or other communications to be given
hereunder by any party to another party shall be in writing, shall be
delivered personally, by telecopy, by certified or registered mail,
postage prepaid, return receipt requested, or by Federal Express or
other comparable delivery service, to the address of the party set
forth on Schedule B hereto or to such other address as the party to
whom notice is to be given may provide in a written notice to the other
parties hereto, a copy of which shall be on file with the Secretary of
the Company. Notice shall be effective when delivered if given
personally, when receipt is acknowledged if telecopied, three days
after mailing if given by registered or certified mail as described
above, and one business day after deposit if given by Federal Express
or comparable delivery service.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made to be performed entirely in such State,
without regard to principles of conflicts of law. The Company and the
parties each hereby irrevocably submit to the jurisdiction of any New
York State court sitting in the City of New York or any Federal Court
sitting in the City of New York in respect of any suit, action or
proceeding arising out of or relating to this Agreement, and each
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts, in each case solely in respect of any suit, action or
proceeding arising out of or relating to this Agreement. Nothing herein
shall affect the right of any party to serve process in any manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Company in any other jurisdiction.
<PAGE>
(g) Severability. If one or more of the provisions contained
herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect, for any reason, the
validity, legality and enforceability of the remaining provisions
contained herein shall not be in any way affected or impaired thereby,
and the provision held to be invalid, illegal or unenforceable shall be
reformed to the minimum extent necessary, and in a manner as consistent
with the purposes thereof as is practicable, so as to render it valid,
legal and enforceable, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ANACOMP, INC.
By
---------------------------------
Name:
Title:
HOLDERS:
By signature of the Signature Page for
Common Stock Registration Rights Agreement
contained in the "Notice to Recipients of
New Common Stock: Registration Rights"
<PAGE>
SCHEDULE A
As specified on the Signature Page for Common Stock Registration Rights
Agreement contained in the "Notice to Recipients of New Common Stock:
Registration Rights", subject to verification by the Company.
<PAGE>
SCHEDULE B
To the Company:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Facsimile Number: (317) 843-2014
To the Holders:
To the address specified on the Signature Page for Common Stock Registration
Rights Agreement contained in the "Notice to Recipients of New Common Stock:
Registration Rights"
SENIOR SECURED NOTE REGISTRATION RIGHTS AGREEMENT
SENIOR SECURED NOTE REGISTRATION RIGHTS AGREEMENT dated as of June 4, 1996
(this "Agreement"), by and among ANACOMP, INC., an Indiana corporation (the
"Company"), and the Holders (as hereinafter defined) of Registrable Notes (as
hereinafter defined) who are parties to this Agreement.
This Agreement is being entered into in accordance with the Plan (as
hereinafter defined) in connection with the acquisition of Notes (as hereinafter
defined) by certain holders (the "Original Holders") pursuant to the Plan. Each
Original Holder owns the aggregate principal amount of Notes specified with
respect to such Original Holder in Schedule A hereto as such Schedule A may be
amended from time to time.
The Company has undertaken to register the Registrable Notes under the
Securities Act (as hereinafter defined) and to take certain other actions with
respect to the Registrable Notes. This Agreement sets forth the terms and
conditions of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the United States Securities and Exchange Commission, or
any successor agency.
"Effective Date" means the effective date of the Plan pursuant to the terms
thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
<PAGE>
"Expenses" means all expenses incident to the Company's performance of or
compliance with its obligations under this Agreement, including, without
limitation, all registration, filing, listing, securities exchange and NASD
fees, all fees and expenses of complying with state securities or blue sky laws
(including fees, disbursements and other charges of counsel for the underwriters
in connection with blue sky filings), all word processing, duplicating and
printing expenses, messenger and delivery expenses, all rating agency fees, the
fees, disbursements and other charges of counsel for the Company and of its
independent public accountants, including the expenses incurred in connection
with "comfort" letters required by or incident to such performance and
compliance, any fees and disbursements of underwriters customarily paid by
issuers and sellers of securities and the reasonable fees and disbursements of
one firm of counsel (per registration prepared) chosen by the Holders of a
majority of the aggregate principal amount of Registrable Notes with respect to
disclosure matters relating to the selling securityholders and the plan of
distribution, but excluding underwriting discounts and commissions and
applicable transfer taxes, if any, which discounts, commissions and transfer
taxes shall be borne by the seller or sellers of Registrable Notes in all cases.
"Holder" means (i) the Original Holders and (ii) any transferees of the
Registrable Notes (x) whose Notes continue to be Registrable Notes and (y) who
have been assigned the Transferor's rights under Section 12 hereof.
"Indenture" means the Indenture between the Company and The Bank of New
York, as trustee (the "Trustee"), dated as of June 4, 1996, as amended from time
to time, relating to the Notes.
"Initial Shelf Registration" has the meaning set forth in Section 2 hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Notes" means up to $112,190,000 in aggregate principal amount of 11-5/8%
Senior Secured Notes due 1999 to be issued pursuant to the Plan and the
Indenture, and includes any securities of the Company issued or issuable with
respect to such securities by way of a recapitalization, merger, consolidation
or other reorganization or otherwise.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.
"Plan" means the Third Amended Joint Plan of Reorganization under Chapter
11 of the United States Bankruptcy Code for Anacomp, Inc. and certain of its
subsidiaries filed with the United States Bankruptcy Court for the District or
Delaware and confirmed by such court on May 20, 1996, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof.
<PAGE>
"Public Offering" means a public offering and sale of securities pursuant
to an effective registration statement under the Securities Act.
"Registrable Notes" means the Notes held by the Original Holders (and
Transferees of such Registrable Notes which are "Holders" hereunder); provided,
however, that Registrable Notes shall cease to be Registrable Notes upon (i) any
sale or distribution thereof pursuant to a registration statement; (ii) any sale
or distribution thereof following which the recipient thereof is permitted to
sell such Notes without restriction under the Securities Act and any state
securities laws; or (iii) the receipt by a Holder of Notes of an opinion,
satisfactory in form and substance to such Holder, by legal counsel, reasonably
acceptable to such Holder, to the effect that the public sale of such Notes
without restriction under the Securities Act and any state securities laws does
not require the registration of such Notes under the Securities Act and any
state securities laws.
"Registration Statement" means a registration statement filed with the
Commission under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Subsequent Shelf Registration" has the meaning set forth in Section 2
hereof.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation or
other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
2. Registration Under the Securities Act.
(a) Initial Shelf Registration. The Company shall (i) cause
to be filed as soon as practicable, but not later than 45 days after
the Effective Date (or such longer time as may be required for the
Company to prepare the necessary financial statements), a Registration
Statement for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act (the "Initial Shelf Registration")
covering all of the Registrable Notes and providing for the sale of the
Registrable Notes by the Holders thereof and (ii) use its best efforts
to have such Initial Shelf Registration declared effective by the
Commission as promptly as practicable thereafter.
<PAGE>
(b) Subsequent Shelf Registrations. If the Company determines
to terminate the effectiveness of the Initial Shelf Registration prior
to the end of the Effectiveness Period (as defined in Section 2(d)
hereof), then prior to such termination the Company shall file, and
shall use its best efforts to cause the Commission to declare
effective, a subsequent Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 under the Securities
Act (a "Subsequent Shelf Registration") covering all of the Registrable
Notes which then remain outstanding. The Subsequent Shelf Registration
shall be filed by the Company at such time prior to the termination of
the effectiveness of the Initial Shelf Registration which is reasonably
calculated to cause the Subsequent Shelf Registration to become
effective on or before the date on which the effectiveness of the
Initial Shelf Registration terminates.
(c) Amendments to Initial Shelf Registration or Subsequent
Shelf Registrations. If the Initial Shelf Registration (except as
provided in Section 2(b)) or any Subsequent Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness
Period (as defined in Section 2(d) hereof) for any reason (other than
because of the sale of all of the Registrable Notes covered thereby),
the Company shall use its best efforts to obtain the prompt withdrawal
of any order suspending the effectiveness thereof or take such other
actions as may be necessary to reinstate the effectiveness thereof, and
in any event shall, within 60 days of such cessation of effectiveness,
either (i) amend such Initial Shelf Registration or Subsequent Shelf
Registration in a manner reasonably calculated to obtain the withdrawal
of the order suspending the effectiveness thereof, or (ii) file a
Subsequent Shelf Registration covering all Registrable Notes which
remain unsold. (Each of the Initial Shelf Registration and any
Subsequent Shelf Registration filed pursuant to paragraph 2(b) or this
paragraph 2(c) are referred to individually herein as a "Shelf
Registration" and collectively as the "Shelf Registrations").
(d) Effectiveness Period. Subject to Section 3 hereof, the
Company shall use its best efforts to keep the Shelf Registration
(including the Initial Shelf Registration and/or any Subsequent Shelf
Registration) continuously effective under the Securities Act for a
<PAGE>
period of three (3) years following the date on which the Initial Shelf
Registration became effective (the "Effectiveness Period"), or such
shorter period ending when all Registrable Notes covered by the Initial
Shelf Registration have been sold; provided, however, that the
Effectiveness Period shall be extended by any period during which a
Shelf Registration is not in effect or during which sales have been
suspended, whether pursuant to Section 3, Section 5(g) hereof or
otherwise. If a Subsequent Shelf Registration is filed, pursuant to
Section 2(b) or 2(c) hereof, the Company shall use its best efforts to
cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period after such effectiveness
equal to the Effectiveness Period, less the aggregate number of days
during which the Initial Shelf Registration or any Subsequent Shelf
Registration was previously in effect. The intent of this provision is
that the Shelf Registration (including the Initial Shelf Registration
and/or any Subsequent Shelf Registration) shall be in effect for a
number of days, in aggregate, equal to three (3) years; provided,
however, that a Shelf Registration shall not be required to be
maintained in effect after none of the Notes eligible to be included in
a Shelf Registration are Registrable Notes.
(e) Supplements and Amendments. The Company shall supplement
or amend the Shelf Registration if (i) required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration, (ii) otherwise required by the Commission,
or (iii) requested to do so by any Holder of Registrable Notes to the
extent necessary to list such Holder as a selling securityholder in
such registration statement.
3. Blackout Periods. With respect to a Shelf Registration filed or to be
filed pursuant to Section 2 hereof, if the Board of Directors of the Company
shall determine, in its good faith reasonable judgment, that to maintain the
continued effectiveness of such Shelf Registration or to permit such Shelf
Registration to become effective (or if no Shelf Registration has yet been
filed, to file such Shelf Registration) would be significantly disadvantageous
to the Company's financial condition, business or prospects (a "Disadvantageous
Condition") in light of the existence, or in anticipation, of (i) any
acquisition or financing activity involving the Company, or any subsidiary of
the Company, including a proposed public offering, (ii) an undisclosed material
event, the public disclosure of which would have a material adverse effect on
the Company, (iii) a proposed material transaction involving the Company or a
substantial amount of its assets, or (iv) any other circumstance or condition
<PAGE>
the disclosure of which would materially disadvantage the Company, and the
existence of which renders any Shelf Registration to be filed, or any Shelf
Registration then filed or effective, inadequate as failing to include material
information, then the Company may, until such Disadvantageous Condition no
longer exists (but not with respect to more than four occasions nor for more
than 180 days in the aggregate nor involving more than 60 days in the aggregate
during any continuous 12-month period) cause such Shelf Registration to be
withdrawn and/or cause the right of Holders to make dispositions of Registrable
Notes pursuant to such Shelf Registration to be suspended, or, in the case of a
Shelf Registration that has not yet been filed, elect not to file such Shelf
Registration; provided, however, that the Company may not take any such action
unless it simultaneously takes similar action with respect to any other
Registration Statements of the Company that are then effective or that are
contemplated or required to be filed. If the Company determines to take any
action pursuant to the preceding sentence, the Company shall deliver a notice to
any Holder of Registrable Notes covered or to be covered under such Shelf
Registration, which indicates that the Shelf Registration is no longer effective
or usable or will not be filed. Upon the receipt of any such notice, such
Persons shall forthwith discontinue any sale of Registrable Notes pursuant to
such Shelf Registration and any use of the prospectus contained in such Shelf
Registration. If any Disadvantageous Condition shall cease to exist, the Company
shall promptly notify any Holders who shall have ceased selling Registrable
Notes pursuant to an effective Shelf Registration as a result of such
Disadvantageous Condition, indicating such cessation and disclosing in
reasonable detail the nature and outcome of such Disadvantageous Condition. The
Company shall, if any Shelf Registration required to be filed or maintained
under this Agreement has been withdrawn or not filed, file promptly, at such
time as it in good faith deems the earliest practicable time, a new Shelf
Registration covering the Registrable Notes that were covered by such withdrawn
Shelf Registration or to be covered by such unfiled Shelf Registration.
4. Expenses. The Company shall promptly pay all Expenses in connection with
any registration initiated pursuant to Section 2 hereof, whether or not such
registration becomes effective.
5. Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Section 2
hereof, the Company shall, as expeditiously as possible (subject to Section 3
hereof):
(a) promptly prepare and file with the Commission the
requisite registration statement to effect such registration and
thereafter use its reasonable best efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities that are not Registrable
Notes at any time prior to the effective date of the registration
statement relating thereto;
<PAGE>
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the offering of all Registrable Notes covered by
such registration statement until the end of the Effectiveness Period
or, if earlier, such time as all of such Registrable Notes have been
disposed of in accordance with the method of disposition set forth in
such registration statement;
(c) furnish to each seller of Registrable Notes covered by
such registration statement such number of copies of such registration
statement and of each amendment and supplement thereto (in each case
including all exhibits and any documents incorporated by reference),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus, each final prospectus
and any supplement to any prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in writing;
(d) use its best efforts (i) to register or qualify all
Registrable Notes and other securities covered by such registration
statement under such other securities or blue sky laws of such states
or other jurisdictions of the United States of America as the Holders
of a majority in principal amount of the Registrable Notes covered by
such registration statement shall reasonably request in writing, (ii)
to keep such registration or qualification in effect for so long as
such registration statement remains in effect and (iii) to take any
other action that may be reasonably necessary or advisable to enable
the sellers of Registrable Notes to consummate the disposition in such
jurisdictions of the securities to be sold by such sellers, except that
the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subsection (d) be
obligated to be so qualified, to subject itself to taxation in such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to cause all Registrable Notes
covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the
Company and counsel to the sellers of Registrable Notes to enable such
sellers to consummate the offering of such Registrable Notes;
<PAGE>
(f) use its good faith efforts to obtain and, if obtained,
furnish a copy to each seller of Registrable Notes, of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement, reasonably
satisfactory in form and substance to counsel to the Holders
chosen by Holders of a majority of the aggregate principal amount
of Registrable Notes being registered, and
(ii) a "comfort" letter, dated the effective date of
such registration statement, signed by the independent public
accountants who have certified the Company's financial statements
included or incorporated by reference in such registration
statement, reasonably satisfactory in form and substance to
counsel to the Holders chosen by Holders of a majority of the
aggregate principal amount of Registrable Notes being registered,
in each case, covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and,
in the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements and matters
contained in such registration statement, as are customarily covered in
opinions of issuer's counsel and in accountants' comfort letters
delivered to selling securityholders in connection with the sale of
securities pursuant to "shelf" registration statements;
(g) notify the sellers of Registrable Notes under the Shelf
Registration (providing, if requested by any such Persons, confirmation
in writing) as soon as practicable after becoming aware of: (A) the
filing of any prospectus or prospectus supplement or the filing or
effectiveness (or anticipated date of effectiveness) of such
registration statement or any post-effective amendment thereto; (B) any
request by the Commission for amendments or supplements to such
registration statement or the related prospectus or for additional
information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the
initiation of any proceedings for the purpose; (D) the receipt by the
<PAGE>
Company of any notification with respect to the suspension of the
qualification or registration (or exemption therefrom) of any
Registrable Securities for sale in any jurisdiction in the United
States or the initiation or threatening of any proceeding for such
purposes; or (E) the happening of any event that makes any statement
made in such registration statement or in any related prospectus,
prospectus supplement, amendment or document incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in such registration statement or in any such prospectus,
supplement, amendment or other such document so that it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein (in the case of any prospectus in the light of the
circumstances under which they were made) not misleading;
(h) otherwise comply with all applicable rules and
regulations of the Commission and any other governmental agency or
authority having jurisdiction over the offering, and make available to
its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;
(i) enter into customary agreements and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Registrable Notes included in such
registration statement;
(j) make every reasonable effort to obtain the withdrawal of
any order or other action suspending the effectiveness of any such
registration statement or suspending the qualification or registration
(or exemption therefrom) of the Registrable Securities for sale in any
jurisdiction;
(k) if any event described in subsection (g) hereof occurs,
use its best efforts (subject to Section 3 hereof) to cooperate with
the Commission to prepare, as soon as practicable, any amendment or
supplement to such registration statement or such related prospectus in
order that such registration statement and prospectus, as so amended or
supplemented, shall not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or to take other action
that may have been requested by the Commission; and
<PAGE>
(l) use its best efforts to cause all such Registrable Notes
covered by such registration statement to be listed on any national
securities exchange or included in any automated quotation system on
which securities of the same class issued by the Company are then
listed or included (if the listing or inclusion of such Registrable
Notes is then permitted under the rules of such exchange or interdealer
quotation system).
It shall be a condition precedent to the obligations of the Company to take
action pursuant to this Agreement that the selling Holders shall furnish to the
Company in writing such information regarding themselves and the Registrable
Notes held by them, and the intended method of disposition of such securities,
as shall be required to effect the registration of their Registrable Notes.
Following a registration pursuant to Section 2 hereof, each Holder agrees
that as of the date that a final prospectus is made available to it for
distribution to prospective purchasers of Registrable Notes it shall cease to
distribute copies of any preliminary prospectus prepared in connection with the
offer and sale of such Registrable Notes. Each Holder further agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in subsection (g) of this Section 5, such Holder shall forthwith
discontinue such Holder's disposition of Registrable Notes pursuant to the
registration statement relating to such Registrable Notes until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (k) of this Section 5 and, if so directed by the Company, shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession of the prospectus
relating to such Registrable Notes current at the time of receipt of such
notice.
6. Preparation; Reasonable Investigation.
(a) Registration Statements. In connection with the
preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company shall give each
Holder of Registrable Notes registered under such registration
statement, the underwriters, if any, and its respective counsel and
accountants the reasonable opportunity to participate in the
preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or
supplement thereto, and shall give each of them such reasonable access
to its books and records and such reasonable opportunities to discuss
the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall
be necessary, in the reasonable opinion of any such Holders' and such
underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
<PAGE>
(b) Confidentiality. Each Holder of Registrable Notes shall
maintain the confidentiality of any confidential information received
from or otherwise made available by the Company to such Holder of
Registrable Notes pursuant to this Agreement and identified in writing
by the Company as confidential and shall enter into such
confidentiality agreements as the Company shall reasonably request.
Information that (i) is or becomes available to a Holder of Registrable
Notes from a public source, (ii) is disclosed to a Holder of
Registrable Notes by a third-party source whom the Holder of
Registrable Notes reasonably believes has the right to disclose such
information or (iii) is or becomes required to be disclosed by a Holder
of Registrable Notes by law, including, but not limited to,
administrative or court orders, shall not be deemed to be confidential
information for purposes of this Agreement; provided, however, that to
the extent sufficient time is available prior to such disclosure being
required to be made pursuant to clause (iii) hereof, the Holders of
Registrable Notes shall (to the extent not legally prohibited from
doing so) promptly notify the Company of any request for disclosure and
any proposed disclosure pursuant to such clause (iii). The Holders of
Registrable Notes shall not grant access, and the Company shall not be
required to grant access, to information under this Section 6 to any
Person who will not agree to maintain the confidentiality (to the same
extent a Holder is required to maintain the confidentiality) of any
confidential information received from or otherwise made available to
it by the Company or the holders of Registrable Notes under this
Agreement and identified in writing by the Company as confidential.
7. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof, the Company shall, and hereby agrees to, indemnify and hold
harmless, each Holder and seller of any Registrable Notes covered by
such registration statement and each other Person, if any, who controls
such Holder or seller (within the meaning of the Securities Act), and
their respective directors, officers, partners, agents and Affiliates
(each, a "Company Indemnitee" for purposes of this Section 7(a)),
against any losses, claims, damages, liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof and
whether or not such Company Indemnitee is a party thereto), joint or
several, and expenses, including, without limitation, the reasonable
fees, disbursements and other charges of legal counsel and reasonable
<PAGE>
out-of-pocket costs of investigation, to which such Company Indemnitee
may become subject under the Securities Act or otherwise (collectively,
a "Loss" or "Losses"), insofar as such Losses arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which Registrable
Notes were registered pursuant to this Agreement, any preliminary
prospectus, final prospectus or summary prospectus contained therein,
or any amendment or supplement thereto (collectively, "Offering
Documents"), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances in which they were
made not misleading; provided, however, that the Company shall not be
liable in any such case to the extent that any such Loss arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Offering Documents in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Company Indemnitee specifically
stating that it is expressly for use therein; and provided, further,
that the Company shall not be liable to any Holder or seller of
Registrable Notes or any other Person, if any, who controls such
Person, in any such case to the extent that any such Loss arises out of
such Person's failure to send or give a copy of the final prospectus
(including any documents incorporated by reference therein), as the
same may be then supplemented or amended, to the Person asserting an
untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of
Registrable Notes to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf
of such Company Indemnitee and shall survive the transfer of such
securities by such Company Indemnitee.
(b) Indemnification by the Sellers. In connection with any
registration statement filed by the Company pursuant to Section 2
hereof in which a Holder has registered for sale Registrable Notes,
each such Holder or seller of Registrable Notes, severally and not
jointly, shall, and hereby agrees to, indemnify and hold harmless the
Company and each of its directors, officers, employees and agents, each
other Person who participates as an underwriter in the offering or sale
of such securities, each other Person, if any, who controls the Company
<PAGE>
(within the meaning of the Securities Act), any such underwriter and
each other seller and such underwriter's or other seller's directors,
officers, stockholders, partners, employees, agents and affiliates
(each a "Holder Indemnitee" for purposes of this Section 7(b)), against
all Losses insofar as such Losses arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Offering Documents (or any document incorporated by
reference therein) or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein in the light of circumstances in which they were
made not misleading, if such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by or
on behalf of such Holder or seller of Registrable Notes specifically
stating that it is expressly for use therein; provided, however, that
the liability of such indemnifying party under this Section 7(b) shall
be limited to the amount of the net proceeds received by such
indemnifying party in the offering giving rise to such liability. Such
indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Holder Indemnitee and shall
survive the transfer of such securities by such Holder.
(c) Notices of Losses, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a Loss referred to in the preceding subsections of
this Section 7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subsections of this Section 7, except
to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against
an indemnified party, the indemnifying party shall be entitled to
participate in and, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Loss, to assume and
control the defense thereof, in each case at its own expense, jointly
with any other indemnifying party similarly notified, to the extent
that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from such indemnifying party of its
assumption of the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
<PAGE>
party shall be liable for any settlement of any such action or
proceeding effected without its written consent, which shall not be
unreasonably withheld. No indemnifying party shall, without the consent
of the indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such Loss or which
requires action on the part of such indemnified party or otherwise
subjects the indemnified party to any obligation or restriction to
which it would not otherwise be subject.
(d) Contribution. If the indemnification provided for in this
Section 7 shall for any reason be unavailable to an indemnified party
under subsection (a) or (b) of this Section 7 in respect of any Loss,
then, in lieu of the amount paid or payable under subsection (a) or (b)
of this Section 7, the indemnified party and the indemnifying party
under subsection (a) or (b) of this Section 7 shall contribute to the
aggregate Losses (including legal or other expenses reasonably incurred
in connection with investigating the same) (i) in such proportion as is
appropriate to reflect the relative fault of the Company and the
sellers of Registrable Notes covered by the registration statement
which resulted in such Loss or action in respect thereof, with respect
to the statements, omissions or action which resulted in such Loss or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission. The parties hereto agree that it would not be
just and equitable if contributions were to be determined by any method
of allocation which does not take account of the equitable
considerations referred to in this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and
other expenses reasonably incurred by such indemnified party in
connection with investigation or defending any Loss which is the
subject of this paragraph. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In addition, no
Person shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action or Loss effected without such
Person's consent.
(e) Other Indemnification. The Company and, in connection
with any registration statement filed by the Company pursuant to
Section 2, each Holder shall, with respect to any required registration
or other qualification of securities under any Federal or state law or
<PAGE>
regulation of any governmental authority other than the Securities Act,
indemnify Holder Indemnitees and Company Indemnitees, respectively,
against Losses, or, to the extent that indemnification shall be
unavailable to a Holder Indemnitee or Company Indemnitee, contribute to
the aggregate Losses of such Holder Indemnitee or Company Indemnitee in
a manner similar to that specified in the preceding subsections of this
Section 7 (with appropriate modifications).
(f) Indemnification Payments. The indemnification and
contribution required by this Section 7 shall be made by periodic
payments of the amount thereof during the course of any investigation
or defense, as and when bills are received or any Loss is incurred.
8. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act or the
Exchange Act, such rights shall not be in conflict with or adversely affect any
of the rights provided in this Agreement to the holders of Registrable Notes.
9. Rule 144 and Rule 144A. Prior to the expiration of the Effectiveness
Period, the Company shall take all actions reasonably necessary to enable
Holders to sell Registrable Notes without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, (b) Rule 144A
under the Securities Act, as such Rule may be amended from time to time, or (c)
any similar rules or regulations hereafter adopted by the Commission, including,
without limiting the generality of the foregoing, filing on a timely basis all
reports required to be filed under the Exchange Act. Upon the request of any
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. This paragraph is in addition to
and not in derogation of any rights the Holders may have under the Indenture.
<PAGE>
10. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company shall have obtained the prior written consent of either (i)
the Holders of at least a majority of the aggregate principal amount of
Registrable Notes affected by such amendment, modification or waiver or (ii) all
Holders of Registrable Notes owning more than 5% of the Company's then
outstanding Notes.
11. Nominees for Beneficial Owners. In the event that any Registrable Note
is held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its election in writing delivered to the Company, be treated as
the Holder of such Registrable Note for purposes of any request or other action
by any Holder or Holders pursuant to this Agreement or any determination of the
number or percentage of principal amount of Registrable Notes held by any Holder
or Holders contemplated by this Agreement. If the beneficial owner of any
Registrable Notes so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Notes.
12. Assignment. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns including any successor by merger to the Company. Any
Holder may assign to any permitted Transferee of its Registrable Notes holding
Registrable Notes its rights and obligations under this Agreement, provided that
such Transferee shall deliver to the Company prior to such assignment a written
instrument in which such Transferee agrees to be bound by this Agreement as if
it were an original party hereto, whereupon such Transferee shall for all
purposes be deemed to be a Holder under this Agreement.
13. Calculation of Percentage of Principal Amount of Registrable Notes. For
purposes of this Agreement, all references to an aggregate principal amount of
Registrable Notes or a percentage thereof shall be calculated based upon the
aggregate principal amount of Registrable Notes outstanding at the time such
calculation is made and shall exclude any Registrable Notes or Notes, as the
case may be, owned by the Company or any subsidiary of the Company.
14. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall
execute such documents and other papers and perform such further acts
as may be reasonably required or desirable to carry out the provisions
of this Agreement and the transactions contemplated hereby.
<PAGE>
(b) Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the
meaning or construction of any provisions hereof.
(c) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and the Company hereby agrees to waive the
defense in any action for specific performance that a remedy at law
would be adequate.
(d) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions,
promises, representations, warranties, covenants, or undertakings with
respect to the subject matter hereof, other than those expressly set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties hereto with respect
to the subject matter hereof.
(e) Notices. Any notices or other communications to be given
hereunder by any party to another party shall be in writing, shall be
delivered personally, by telecopy, by certified or registered mail,
postage prepaid, return receipt requested, or by Federal Express or
other comparable delivery service, to the address of the party set
forth on Schedule B hereto or to such other address as the party to
whom notice is to be given may provide in a written notice to the other
parties hereto, a copy of which shall be on file with the Secretary of
the Company. Notice shall be effective when delivered if given
personally, when receipt is acknowledged if telecopied, three days
after mailing if given by registered or certified mail as described
above, and one business day after deposit if given by Federal Express
or comparable delivery service.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made to be performed entirely in such State,
without regard to principles of conflicts of law. The Company and the
parties each hereby irrevocably submit to the jurisdiction of any New
York State court sitting in the City of New York or any Federal Court
sitting in the City of New York, and each irrevocably accepts for
itself and in respect of its property, generally and unconditionally,
the jurisdiction of the aforesaid courts, in each case solely in
respect of any suit, action or proceeding arising out of or relating to
this Agreement. Nothing herein shall affect the right of any party to
serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in any other
jurisdiction.
<PAGE>
(g) Severability. If one or more of the provisions contained
herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect, for any reason, the
validity, legality and enforceability of the remaining provisions
contained herein shall not be in any way affected or impaired thereby,
and the provision held to be invalid, illegal or unenforceable shall be
reformed to the minimum extent necessary, and in a manner as consistent
with the purposes thereof as is practicable, so as to render it valid,
legal and enforceable, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ANACOMP, INC.
By
-----------------------------
Name:
Title:
HOLDERS:
By signature of the Signature Page for
Senior Secured Note Registration Rights
Agreement contained in the "Notice to
Recipients of Senior Secured Notes:
Registration Rights"
<PAGE>
SCHEDULE A
As specified on the Signature Page for Senior Secured Note Registration Rights
Agreement contained in the "Notice to Recipients of Senior Secured Notes:
Registration Rights", subject to verification by the Company.
<PAGE>
SCHEDULE B
To the Company:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Facsimile Number: (317) 843-2014
To the Holders:
To the address specified on the Signature Page for Senior Secured Note
Registration Rights Agreement contained in the "Notice to Recipients of Senior
Secured Notes: Registration Rights"
Draft 5/31/96
SENIOR SUBORDINATED NOTE REGISTRATION RIGHTS AGREEMENT
SENIOR SUBORDINATED NOTE REGISTRATION RIGHTS AGREEMENT dated as of June 4,
1996 (this "Agreement"), by and among ANACOMP, INC., an Indiana corporation (the
"Company"), and the Holders of Registrable Notes (as hereinafter defined) who
are parties to this Agreement.
This Agreement is being entered into in accordance with the Plan (as
hereinafter defined) in connection with the acquisition of Notes (as hereinafter
defined) by certain holders (the "Original Holders") pursuant to the Plan. Each
Original Holder owns the aggregate principal amount of Notes specified with
respect to such Original Holder in Schedule A hereto as such Schedule A may be
amended from time to time.
The Company has undertaken to register the Registrable Notes under the
Securities Act (as hereinafter defined) and to take certain other actions with
respect to the Registrable Notes. This Agreement sets forth the terms and
conditions of such undertaking.
In consideration of the premises and the mutual agreements set forth
herein, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein and in the recitals above shall have the following meanings:
"Affiliate" of a Person means any Person that controls, is under common
control with, or is controlled by, such other Person. For purposes of this
definition, "control" means the ability of one Person to direct the management
and policies of another Person.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to be
closed.
"Commission" means the United States Securities and Exchange Commission, or
any successor agency.
"Effective Date" means the effective date of the Plan pursuant to the terms
thereof.
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar or successor statute.
"Expenses" means all expenses incident to the Company's performance of or
compliance with its obligations under this Agreement, including, without
limitation, all registration, filing, listing, securities exchange and NASD
fees, all fees and expenses of complying with state securities or blue sky laws
(including fees, disbursements and other charges of counsel for the underwriters
in connection with blue sky filings), all word processing, duplicating and
printing expenses, messenger and delivery expenses, all rating agency fees, the
fees, disbursements and other charges of counsel for the Company and of its
independent public accountants, including the expenses incurred in connection
with "comfort" letters required by or incident to such performance and
compliance, any fees and disbursements of underwriters customarily paid by
issuers and sellers of securities and the reasonable fees and disbursements of
one firm of counsel (per registration prepared) chosen by the Holders of a
majority of the aggregate principal amount of Registrable Notes with respect to
disclosure matters relating to the selling securityholders and the plan of
distribution, but excluding underwriting discounts and commissions and
applicable transfer taxes, if any, which discounts, commissions and transfer
taxes shall be borne by the seller or sellers of Registrable Notes in all cases.
"Holder" means (i) the Original Holders and (ii) any transferees of the
Registrable Notes (x) whose Notes continue to be Registrable Notes and (y) who
have been assigned the Transferor's rights under Section 12 hereof.
"Indenture" means the Indenture between the Company and IBJ Schroder Bank &
Trust Company, as trustee (the "Trustee"), dated as of June 4, 1996, as amended
from time to time, relating to the Notes.
"Initial Shelf Registration" has the meaning set forth in Section 2 hereof.
"NASD" means the National Association of Securities Dealers, Inc.
"Notes" means (i) the $160,000,000 in aggregate principal amount of the
Company's 13% Senior Subordinated Notes due 2002 to be issued pursuant to the
Plan and the Indenture, (ii) any additional 13% Senior Subordinated Notes due
2002 issued pursuant to the terms of the Indenture in payment of accrued
interest, and (iii) any securities of the Company issued or issuable with
respect to the securities descrivbed in clauses (i) and (ii) by way of a
recapitalization, merger, consolidation or other reorganization or otherwise.
<PAGE>
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.
"Plan" means the Third Amended Joint Plan of Reorganization under Chapter
11 of the United States Bankruptcy Code for Anacomp, Inc. and certain of its
subsidiaries filed with the United States Bankruptcy Court for the District or
Delaware and confirmed by such court on May 20, 1996, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof.
"Public Offering" means a public offering and sale of securities pursuant
to an effective registration statement under the Securities Act.
"Registrable Notes" means the Notes held by the Original Holders (and
Transferees of such Registrable Notes which are "Holders" hereunder); provided,
however, that Registrable Notes shall cease to be Registrable Notes upon (i) any
sale or distribution thereof pursuant to a registration statement; (ii) any sale
or distribution thereof following which the recipient thereof is permitted to
sell such Notes without restriction under the Securities Act and any state
securities laws; or (iii) the receipt by a Holder of Notes of an opinion,
satisfactory in form and substance to such Holder, by legal counsel, reasonably
acceptable to such Holder, to the effect that the public sale of such Notes
without restriction under the Securities Act and any state securities laws does
not require the registration of such Notes under the Securities Act and any
state securities laws.
"Registration Statement" means a registration statement filed with the
Commission under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar or successor statute.
"Subsequent Shelf Registration" has the meaning set forth in Section 2
hereof.
"Transfer" means any transfer, sale, assignment, pledge, hypothecation or
other disposition of any interest. "Transferor" and "Transferee" have
correlative meanings.
<PAGE>
2. Registration Under the Securities Act.
(a) Initial Shelf Registration. The Company shall (i) cause to be
filed as soon as practicable, but not later than 45 days after the
Effective Date (or such longer time as may be required for the Company to
prepare the necessary financial statements, a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act (the "Initial Shelf Registration") covering all of the
Registrable Notes and providing for the sale of the Registrable Notes by
the Holders thereof and (ii) use its best efforts to have such Initial
Shelf Registration declared effective by the Commission as promptly as
practicable thereafter.
(b) Subsequent Shelf Registrations. If the Company determines to
terminate the effectiveness of the Initial Shelf Registration prior to the
end of the Effectiveness Period (as defined in Section 2(d) hereof), then
prior to such termination the Company shall file, and shall use its best
efforts to cause the Commission to declare effective, a subsequent
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act (a "Subsequent Shelf
Registration") covering all of the Registrable Notes which then remain
outstanding. The Subsequent Shelf Registration shall be filed by the
Company at such time prior to the termination of the effectiveness of the
Initial Shelf Registration which is reasonably calculated to cause the
Subsequent Shelf Registration to become effective on or before the date on
which the effectiveness of the Initial Shelf Registration terminates.
(c) Amendments to Initial Shelf Registration or Subsequent Shelf
Registrations. If the Initial Shelf Registration (except as provided in
Section 2(b)) or any Subsequent Shelf Registration ceases to be effective
for any reason at any time during the Effectiveness Period (as defined in
Section 2(d) hereof) for any reason (other than because of the sale of all
of the Registrable Notes covered thereby), the Company shall use its best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof or take such other actions as may be necessary to
reinstate the effectiveness thereof, and in any event shall, within 60 days
of such cessation of effectiveness, either (i) amend such Initial Shelf
Registration or Subsequent Shelf Registration in a manner reasonably
calculated to obtain the withdrawal of the order suspending the
effectiveness thereof, or (ii) file a Subsequent Shelf Registration
covering all Registrable Notes which remain unsold. (Each of the Initial
Shelf Registration and any Subsequent Shelf Registration filed pursuant to
paragraph 2(b) or this paragraph 2(c) are referred to individually herein
as a "Shelf Registration" and collectively as the "Shelf Registrations").
<PAGE>
(d) Effectiveness Period. Subject to Section 3 hereof, the Company
shall use its best efforts to keep the Shelf Registration (including the
Initial Shelf Registration and/or any Subsequent Shelf Registration)
continuously effective under the Securities Act for a period of three (3)
years following the date on which the Initial Shelf Registration became
effective (the "Effectiveness Period"), or such shorter period ending when
all Registrable Notes covered by the Initial Shelf Registration have been
sold; provided, however, that the Effectiveness Period shall be extended by
any period during which a Shelf Registration is not in effect or during
which sales have been suspended, whether pursuant to Section 3, Section
5(g) hereof or otherwise. If a Subsequent Shelf Registration is filed,
pursuant to Section 2(b) or 2(c) hereof, the Company shall use its best
efforts to cause the Subsequent Shelf Registration to be declared effective
as soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period after such effectiveness
equal to the Effectiveness Period, less the aggregate number of days during
which the Initial Shelf Registration or any Subsequent Shelf Registration
was previously in effect. The intent of this provision is that the Shelf
Registration (including the Initial Shelf Registration and/or any
Subsequent Shelf Registration) shall be in effect for a number of days, in
aggregate, equal to three (3) years; provided, however, that a Shelf
Registration shall not be required to be maintained in effect after none of
the Notes eligible to be included in a Shelf Registration are Registrable
Notes.
(e) Supplements and Amendments. The Company shall supplement or amend
the Shelf Registration if (i) required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, (ii) otherwise required by the Commission, or (iii) requested
to do so by any Holder of Registrable Notes to the extent necessary to list
such Holder as a selling securityholder in such registration statement.
3. Blackout Periods. With respect to a Shelf Registration filed or to be
filed pursuant to Section 2 hereof, if the Board of Directors of the Company
shall determine, in its good faith reasonable judgment, that to maintain the
continued effectiveness of such Shelf Registration or to permit such Shelf
Registration to become effective (or if no Shelf Registration has yet been
filed, to file such Shelf Registration) would be significantly disadvantageous
to the Company's financial condition, business or prospects (a "Disadvantageous
Condition") in light of the existence, or in anticipation, of (i) any
acquisition or financing activity involving the Company, or any subsidiary of
<PAGE>
the Company, including a proposed public offering, (ii) an undisclosed material
event, the public disclosure of which would have a material adverse effect on
the Company, (iii) a proposed material transaction involving the Company or a
substantial amount of its assets, or (iv) any other circumstance or condition
the disclosure of which would materially disadvantage the Company, and the
existence of which renders any Shelf Registration to be filed, or any Shelf
Registration then filed or effective, inadequate as failing to include material
information, then the Company may, until such Disadvantageous Condition no
longer exists (but not with respect to more than four occasions nor for more
than 180 days in the aggregate nor involving more than 60 days in the aggregate
during any continuous 12-month period) cause such Shelf Registration to be
withdrawn and/or cause the right of Holders to make dispositions of Registrable
Notes pursuant to such Shelf Registration to be suspended, or, in the case of a
Shelf Registration that has not yet been filed, elect not to file such Shelf
Registration; provided, however, that the Company may not take any such action
unless it simultaneously takes similar action with respect to any other
Registration Statements of the Company that are then effective or that are
contemplated or required to be filed. If the Company determines to take any
action pursuant to the preceding sentence, the Company shall deliver a notice to
any Holder of Registrable Notes covered or to be covered under such Shelf
Registration, which indicates that the Shelf Registration is no longer effective
or usable or will not be filed. Upon the receipt of any such notice, such
Persons shall forthwith discontinue any sale of Registrable Notes pursuant to
such Shelf Registration and any use of the prospectus contained in such Shelf
Registration. If any Disadvantageous Condition shall cease to exist, the Company
shall promptly notify any Holders who shall have ceased selling Registrable
Notes pursuant to an effective Shelf Registration as a result of such
Disadvantageous Condition, indicating such cessation and disclosing in
reasonable detail the nature and outcome of such Disadvantageous Condition. The
Company shall, if any Shelf Registration required to be filed or maintained
under this Agreement has been withdrawn or not filed, file promptly, at such
time as it in good faith deems the earliest practicable time, a new Shelf
Registration covering the Registrable Notes that were covered by such withdrawn
Shelf Registration or to be covered by such unfiled Shelf Registration.
4. Expenses. The Company shall promptly pay all Expenses in connection with
any registration initiated pursuant to Section 2 hereof, whether or not such
registration becomes effective.
5. Registration Procedures. If and whenever the Company is required to
effect any registration under the Securities Act as provided in Section 2
hereof, the Company shall, as expeditiously as possible (subject to Section 3
hereof):
<PAGE>
(a) promptly prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
reasonable best efforts to cause such registration statement to become
effective; provided, however, that the Company may discontinue any
registration of its securities that are not Registrable Notes at any time
prior to the effective date of the registration statement relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the offering of all Registrable Notes covered by such
registration statement until the end of the Effectiveness Period or, if
earlier, such time as all of such Registrable Notes have been disposed of
in accordance with the method of disposition set forth in such registration
statement;
(c) furnish to each seller of Registrable Notes covered by such
registration statement such number of copies of such registration statement
and of each amendment and supplement thereto (in each case including all
exhibits and any documents incorporated by reference), such number of
copies of the prospectus contained in such registration statement
(including each preliminary prospectus, each final prospectus and any
supplement to any prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may reasonably
request in writing;
(d) use its best efforts (i) to register or qualify all Registrable
Notes and other securities covered by such registration statement under
such other securities or blue sky laws of such states or other
jurisdictions of the United States of America as the Holders of a majority
in principal amount of the Registrable Notes covered by such registration
statement shall reasonably request in writing, (ii) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect and (iii) to take any other action that may be
reasonably necessary or advisable to enable the sellers of Registrable
Notes to consummate the disposition in such jurisdictions of the securities
to be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the
requirements of this subsection (d) be obligated to be so qualified, to
subject itself to taxation in such jurisdiction or to consent to general
service of process in any such jurisdiction;
<PAGE>
(e) use its best efforts to cause all Registrable Notes covered by
such registration statement to be registered with or approved by such other
federal or state governmental agencies or authorities as may be necessary
in the opinion of counsel to the Company and counsel to the sellers of
Registrable Notes to enable such sellers to consummate the offering of such
Registrable Notes;
(f) use its good faith efforts to obtain and, if obtained, furnish a
copy to each seller of Registrable Notes, of
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement, reasonably satisfactory in form
and substance to counsel to the Holders chosen by Holders of a
majority of the aggregate principal amount of Registrable Notes being
registered, and
(iii) a "comfort" letter, dated the effective date of such
registration statement, signed by the independent public accountants
who have certified the Company's financial statements included or
incorporated by reference in such registration statement, reasonably
satisfactory in form and substance to counsel to the Holders chosen by
Holders of a majority of the aggregate principal amount of Registrable
Notes being registered,
in each case, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountants' comfort letter, with respect to events subsequent
to the date of such financial statements and matters contained in such
registration statement, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to selling
securityholders in connection with the sale of securities pursuant to
"shelf" registration statements;
(g) notify the sellers of Registrable Notes under the Shelf
Registration (providing, if requested by any such Persons, confirmation in
writing) as soon as practicable after becoming aware of: (A) the filing of
any prospectus or prospectus supplement or the filing or effectiveness (or
anticipated date of effectiveness) of such registration statement or any
post-effective amendment thereto; (B) any request by the Commission for
amendments or supplements to such registration statement or the related
prospectus or for additional information; (C) the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for the
purpose; (D) the receipt by the Company of any notification with respect to
the suspension of the qualification or registration (or exemption
therefrom) of any Registrable Securities for sale in any jurisdiction in
the United States or the initiation or threatening of any proceeding for
such purposes; or (E) the happening of any event that makes any statement
<PAGE>
made in such registration statement or in any related prospectus,
prospectus supplement, amendment or document incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in such registration statement or in any such prospectus,
supplement, amendment or other such document so that it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
(in the case of any prospectus in the light of the circumstances under
which they were made) not misleading;
(h) otherwise comply with all applicable rules and regulations of the
Commission and any other governmental agency or authority having
jurisdiction over the offering, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(i) enter into customary agreements and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Registrable Notes included in such registration
statement;
(j) make every reasonable effort to obtain the withdrawal of any order
or other action suspending the effectiveness of any such registration
statement or suspending the qualification or registration (or exemption
therefrom) of the Registrable Securities for sale in any jurisdiction;
(k) if any event described in subsection (g) hereof occurs, use its
best efforts (subject to Section 3 hereof) to cooperate with the Commission
to prepare, as soon as practicable, any amendment or supplement to such
registration statement or such related prospectus in order that such
<PAGE>
registration statement and prospectus, as so amended or supplemented, shall
not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or to take other action that may have been requested
by the Commission; and
(l) use its best efforts to cause all such Registrable Notes covered
by such registration statement to be listed on any national securities
exchange or included in any automated quotation system on which securities
of the same class issued by the Company are then listed or included (if the
listing or inclusion of such Registrable Notes is then permitted under the
rules of such exchange or interdealer quotation system).
It shall be a condition precedent to the obligations of the Company to take
action pursuant to this Agreement that the selling Holders shall furnish to the
Company in writing such information regarding themselves and the Registrable
Notes held by them, and the intended method of disposition of such securities,
as shall be required to effect the registration of their Registrable Notes.
Following a registration pursuant to Section 2 hereof, each Holder agrees
that as of the date that a final prospectus is made available to it for
distribution to prospective purchasers of Registrable Notes it shall cease to
distribute copies of any preliminary prospectus prepared in connection with the
offer and sale of such Registrable Notes. Each Holder further agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in subsection (g) of this Section 5, such Holder shall forthwith
discontinue such Holder's disposition of Registrable Notes pursuant to the
registration statement relating to such Registrable Notes until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (k) of this Section 5 and, if so directed by the Company, shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession of the prospectus
relating to such Registrable Notes current at the time of receipt of such
notice.
6. Preparation; Reasonable Investigation.
(a) Registration Statements. In connection with the preparation and
filing of each registration statement under the Securities Act pursuant to
this Agreement, the Company shall give each Holder of Registrable Notes
registered under such registration statement, the underwriters, if any, and
its respective counsel and accountants the reasonable opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and shall give each of them such
reasonable access to its books and records and such reasonable
opportunities to discuss the business of the Company with its officers and
<PAGE>
the independent public accountants who have certified its financial
statements as shall be necessary, in the reasonable opinion of any such
Holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
(b) Confidentiality. Each Holder of Registrable Notes shall maintain
the confidentiality of any confidential information received from or
otherwise made available by the Company to such Holder of Registrable Notes
pursuant to this Agreement and identified in writing by the Company as
confidential and shall enter into such confidentiality agreements as the
Company shall reasonably request. Information that (i) is or becomes
available to a Holder of Registrable Notes from a public source, (ii) is
disclosed to a Holder of Registrable Notes by a third-party source whom the
Holder of Registrable Notes reasonably believes has the right to disclose
such information or (iii) is or becomes required to be disclosed by a
Holder of Registrable Notes by law, including, but not limited to,
administrative or court orders, shall not be deemed to be confidential
information for purposes of this Agreement; provided, however, that to the
extent sufficient time is available prior to such disclosure being required
to be made pursuant to clause (iii) hereof, the Holders of Registrable
Notes shall (to the extent not legally prohibited from doing so) promptly
notify the Company of any request for disclosure and any proposed
disclosure pursuant to such clause (iii). The Holders of Registrable Notes
shall not grant access, and the Company shall not be required to grant
access, to information under this Section 6 to any Person who will not
agree to maintain the confidentiality (to the same extent a Holder is
required to maintain the confidentiality) of any confidential information
received from or otherwise made available to it by the Company or the
holders of Registrable Notes under this Agreement and identified in writing
by the Company as confidential.
7. Indemnification.
(a) Indemnification by the Company. In connection with any
registration statement filed by the Company pursuant to Section 2 hereof,
the Company shall, and hereby agrees to, indemnify and hold harmless, each
Holder and seller of any Registrable Notes covered by such registration
statement and each other Person, if any, who controls such Holder or seller
(within the meaning of the Securities Act), and their respective directors,
officers, partners, agents and Affiliates (each, a "Company Indemnitee" for
purposes of this Section 7(a)), against any losses, claims, damages,
liabilities (or actions or proceedings, whether commenced or threatened, in
<PAGE>
respect thereof and whether or not such Company Indemnitee is a party
thereto), joint or several, and expenses, including, without limitation,
the reasonable fees, disbursements and other charges of legal counsel and
reasonable out-of-pocket costs of investigation, to which such Company
Indemnitee may become subject under the Securities Act or otherwise
(collectively, a "Loss" or "Losses"), insofar as such Losses arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which
Registrable Notes were registered pursuant to this Agreement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto (collectively, "Offering
Documents"), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances in which they were
made not misleading; provided, however, that the Company shall not be
liable in any such case to the extent that any such Loss arises out of or
is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such Offering Documents in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of such Company Indemnitee specifically stating that it is expressly
for use therein; and provided, further, that the Company shall not be
liable to any Holder or seller of Registrable Notes or any other Person, if
any, who controls such Person, in any such case to the extent that any such
Loss arises out of such Person's failure to send or give a copy of the
final prospectus (including any documents incorporated by reference
therein), as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Notes to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
such Company Indemnitee and shall survive the transfer of such securities
by such Company Indemnitee.
(b) Indemnification by the Sellers. In connection with any
registration statement filed by the Company pursuant to Section 2 hereof in
which a Holder has registered for sale Registrable Notes, each such Holder
or seller of Registrable Notes, severally and not jointly, shall, and
hereby agrees to, indemnify and hold harmless the Company and each of its
directors, officers, employees and agents, each other Person who
participates as an underwriter in the offering or sale of such securities,
each other Person, if any, who controls the Company, any such underwriter
and each other seller (within the meaning of the Securities Act) and such
underwriter's or other seller's directors, officers, stockholders,
partners, employees, agents and affiliates (each a "Holder Indemnitee" for
<PAGE>
purposes of this Section 7(b)), against all Losses insofar as such Losses
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Offering Documents (or any
document incorporated by reference therein) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of circumstances in
which they were made not misleading, if such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by or
on behalf of such Holder or seller of Registrable Notes specifically
stating that it is expressly for use therein; provided, however, that the
liability of such indemnifying party under this Section 7(b) shall be
limited to the amount of the net proceeds received by such indemnifying
party in the offering giving rise to such liability. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or
on behalf of the Holder Indemnitee and shall survive the transfer of such
securities by such Holder.
(c) Notices of Losses, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
Loss referred to in the preceding subsections of this Section 7, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of
this Section 7, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, the indemnifying party shall be
entitled to participate in and, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Loss, to assume and
control the defense thereof, in each case at its own expense, jointly with
any other indemnifying party similarly notified, to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from such indemnifying party of its assumption of the defense
thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter
<PAGE>
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable for any settlement of
any such action or proceeding effected without its written consent, which
shall not be unreasonably withheld. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such Loss or which requires
action on the part of such indemnified party or otherwise subjects the
indemnified party to any obligation or restriction to which it would not
otherwise be subject.
(d) Contribution. If the indemnification provided for in this Section
7 shall for any reason be unavailable to an indemnified party under
subsection (a) or (b) of this Section 7 in respect of any Loss, then, in
lieu of the amount paid or payable under subsection (a) or (b) of this
Section 7, the indemnified party and the indemnifying party under
subsection (a) or (b) of this Section 7 shall contribute to the aggregate
Losses (including legal or other expenses reasonably incurred in connection
with investigating the same) in such proportion as is appropriate to
reflect the relative fault of the Company and the sellers of Registrable
Notes covered by the registration statement which resulted in such Loss or
action in respect thereof, with respect to the statements, omissions or
action which resulted in such Loss or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contributions were to be determined by
any method of allocation which does not take account of the equitable
considerations referred to in this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and other
expenses reasonably incurred by such indemnified party in connection with
investigation or defending any Loss which is the subject of this paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. In
addition, no Person shall be obligated to contribute hereunder any amounts
in payment for any settlement of any action or Loss effected without such
Person's consent.
<PAGE>
(e) Other Indemnification. The Company and, in connection with any
registration statement filed by the Company pursuant to Section 2, each
Holder shall, with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of
any governmental authority other than the Securities Act, indemnify Holder
Indemnitees and Company Indemnitees, respectively, against Losses, or, to
the extent that indemnification shall be unavailable to a Holder Indemnitee
or Company Indemnitee, contribute to the aggregate Losses of such Holder
Indemnitee or Company Indemnitee in a manner similar to that specified in
the preceding subsections of this Section 7 (with appropriate
modifications).
(f) Indemnification Payments. The indemnification and contribution
required by this Section 7 shall be made by periodic payments of the amount
thereof during the course of any investigation or defense, as and when
bills are received or any Loss is incurred.
8. Registration Rights to Others. If the Company shall at any time
hereafter provide to any holder of any securities of the Company rights with
respect to the registration of such securities under the Securities Act or the
Exchange Act, such rights shall not be in conflict with or adversely affect any
of the rights provided in this Agreement to the holders of Registrable Notes.
9. Rule 144 and Rule 144A. Prior to the expiration of the Effectiveness
Period, the Company shall take all actions reasonably necessary to enable
Holders to sell Registrable Notes without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, (b) Rule 144A
under the Securities Act, as such Rule may be amended from time to time, or (c)
any similar rules or regulations hereafter adopted by the Commission, including,
without limiting the generality of the foregoing, filing on a timely basis all
reports required to be filed under the Exchange Act. Upon the request of any
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. This paragraph is in addition to
and not in derogation of any rights the Holders may have under the Indenture.
10. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company shall have obtained the prior written consent of either (i)
the Holders of at least a majority of the aggregate principal amount of
Registrable Notes affected by such amendment, modification or waiver or (ii)
each Holder of Registrable Notes owning more than 5% of the aggregate principal
amount of the outstanding Notes.
<PAGE>
11. Nominees for Beneficial Owners. In the event that any Registrable Note
is held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its election in writing delivered to the Company, be treated as
the Holder of such Registrable Note for purposes of any request or other action
by any Holder or Holders pursuant to this Agreement or any determination of the
number or percentage of principal amount of Registrable Notes held by any Holder
or Holders contemplated by this Agreement. If the beneficial owner of any
Registrable Notes so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Notes.
12. Assignment. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns including any successor by merger to the Company. Any
Holder may assign to any permitted Transferee of its Registrable Notes holding
Registrable Notes its rights and obligations under this Agreement, provided that
such Transferee shall deliver to the Company prior to such assignment a written
instrument in which such Transferee agrees to be bound by this Agreement as if
it were an original party hereto, whereupon such Transferee shall for all
purposes be deemed to be a Holder under this Agreement.
13. Calculation of Percentage of Principal Amount of Registrable Notes. For
purposes of this Agreement, all references to an aggregate principal amount of
Registrable Notes or a percentage thereof shall be calculated based upon the
aggregate principal amount of Registrable Notes outstanding at the time such
calculation is made and shall exclude any Registrable Notes or Notes, as the
case may be, owned by the Company or any subsidiary of the Company.
14. Miscellaneous.
(a) Further Assurances. Each of the parties hereto shall execute such
documents and other papers and perform such further acts as may be
reasonably required or desirable to carry out the provisions of this
Agreement and the transactions contemplated hereby.
(b) Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction
of any provisions hereof.
<PAGE>
(c) Remedies. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Agreement and the Company hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(d) Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and there are no restrictions, promises, representations,
warranties, covenants, or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the
parties hereto with respect to the subject matter hereof.
(e) Notices. Any notices or other communications to be given hereunder
by any party to another party shall be in writing, shall be delivered
personally, by telecopy, by certified or registered mail, postage prepaid,
return receipt requested, or by Federal Express or other comparable
delivery service, to the address of the party set forth on Schedule B
hereto or to such other address as the party to whom notice is to be given
may provide in a written notice to the other parties hereto, a copy of
which shall be on file with the Secretary of the Company. Notice shall be
effective when delivered if given personally, when receipt is acknowledged
if telecopied, three days after mailing if given by registered or certified
mail as described above, and one business day after deposit if given by
Federal Express or comparable delivery service.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to
agreements made to be performed entirely in such State, without regard to
principles of conflicts of law. The Company and the parties each hereby
irrevocably submit to the jurisdiction of any New York State court sitting
in the City of New York or any Federal Court sitting in the City of New
York in respect of any suit, action or proceeding arising out of or
relating to this Agreement, and each irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts, in each case solely in respect of any suit, action or
proceeding arising out of or relating to this Agreement. Nothing herein
shall affect the right of any party to serve process in any manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Company in any other jurisdiction.
<PAGE>
(g) Severability. If one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect, for any reason, the validity, legality and
enforceability of the remaining provisions contained herein shall not be in
any way affected or impaired thereby, and the provision held to be invalid,
illegal or unenforceable shall be reformed to the minimum extent necessary,
and in a manner as consistent with the purposes thereof as is practicable,
so as to render it valid, legal and enforceable, it being intended that all
rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ANACOMP, INC.
By
-----------------------------
Name:
Title:
HOLDERS:
By signature of the Signature Page for
Senior Subordinated Note Registration
Rights Agreement contained in the "Notice
to Recipients of Senior Subordinated Notes:
Registration Rights"
<PAGE>
SCHEDULE A
As specified on the Signature Page for Senior Subordinated Note Registration
Rights Agreement contained in the "Notice to Recipients of Senior Subordinated
Notes: Registration Rights", subject to verification by the Company.
<PAGE>
SCHEDULE B
To the Company:
Anacomp, Inc.
11550 North Meridian Street
Carmel, IN 46032
Facsimile Number: (317) 843-2014
To the Holders:
To the address specified on the Signature Page for Senior Subordinated Note
Registration Rights Agreement contained in the "Notice to Recipients of Senior
Subordinated Notes: Registration Rights"
SIGNIFICANT SUBSIDIARIES OF ANACOMP, INC.
State or Country Percentage of Voting
Name of Incorporation Securities Owned*
- - -------------------------- ------------------------- --------------------------
Anacomp, GmbH Germany 100%
Anacomp, Ltd. United Kingdom 100%
Anacomp, S.A. France 100%
Xidex (U.K.) Ltd. United Kingdom 100%
* Directly or indirectly
CORPORATE NEWS RELEASE anacomp
ANACOMP NO LONGER IN CHAPTER 11
ATLANTA, June 4/PRNewsire/ -- Anacomp today officially exited from Chapter
11 with a reorganized financial structure that substantially reduces the
company's overall debt.
Anacomp's emergence from Chapter 11 follows confirmation of Anacomp's plan
of reorganization two weeks ago. As a result of the reorganization, Anacomp's
current debt and accrued unpaid interest and dividends (including preferred
stock) has been reduced by approximately $175 million. Ownership of Anacomp has
been transferred to holders of its old public debt. The new common stock will be
publicly traded, and the company plans to announce shortly where the stock will
be listed.
Anacomp also announced that P. Lang Lowrey III, the company's president and
chief executive officer, has been named chairman of Anacomp's new Board of
Directors. Richard D. Jackson, former vice chairman of First Financial
Management Corporation, has been named vice chairman of Anacomp.
Other new directors of Anacomp are Talton R. Embry, chairman and chief
investment officer of Magten Asset Management Corporation; Darius W. Gaskins,
Jr., a partner of the investment firm High Street Associates; Jay P. Gilbertson,
chief financial officer of HBO & Company; George A. Poole, Jr., a director of
several well-known companies; and Lewis Solomon, chairman and chief executive
officer of Silent Radio, Inc. Lowrey is the only director who is an employee of
Anacomp.
"Our new outside directors bring to Anacomp a wide range of business skills
and backgrounds, as well as extensive experience serving as directors of
successful companies," noted Lowrey. "We plan to draw heavily on their expertise
to help Anacomp add complementary products and services to our business,
including digital ones."
"We are pleased to be out of bankruptcy," continued Lowrey. "Even though we
filed for Chapter 11 protection less than five months ago, its been a
challenging period. Our new financial structure will position the company to
prosper going forward, and I'm proud of all of our dedicated employees who have
made this possible."
Anacomp is a leading provider of multiple-media data management solutions,
delivering cost-effective strategies that incorporate micrographic, digital, and
magnetic output media.
/CONTACT: Jeff Withem, Corporate Communications, 404-876-3361, Ext. 8527,
or E-mail: [email protected]; or Nancy Vandeventer, Investor Relations,
800-350-3044, or E-mail: [email protected], both of Anacomp/
/All of Anacomp's news releases are distributed through PR Newswire, an
international wire service that can be accessed through the Internet
(http://www/prnewswire.com) or numerous on-line providers. Recent news releases
and quarterly reports also are available through Anacomp's home page on the
World Wide Web (http://www.anacomp.com) as well as Anacomp's Company
News-On-Call service (800-758-5804, ext. 054532)/
