<PAGE>
================================================================================
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 (Date of Earliest Event Reported): April 7, 2000
TNP ENTERPRISES, INC.
Texas 001-08847 75-1907501
(State of incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
2 Robbins Lane, Suite 201, Jericho, NY 11753
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 933-3100
4100 International Plaza, Fort Worth, TX 76109
(Former Address, if Changed Since Last Report)
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<PAGE>
Item 1. Changes in Control of Registrant
The Merger
On April 7, 2000, ST Acquisition Corp., a Texas corporation ("ST
Acquisition") merged with and into TNP Enterprises, Inc, the parent corporation
of Texas-New Mexico Power Company ("TNMP"). Upon closing, each outstanding share
of TNP's common stock that was outstanding at the effective time of the merger
was automatically converted into the right to receive $44.00 in cash.
Prior to the merger, TNP common stock was traded on the New York Stock
Exchange. As a result of the merger, TNP is no longer publicly held.
The merger occurred pursuant to an Agreement and Plan of Merger dated May
24, 1999, between TNP, ST Acquisition and SW Acquisition, L.P., a Texas limited
partnership that was the parent of ST Acquisition ("SW Acquisition"). TNP is
the surviving corporation in the merger. SW Acquisition now holds all
outstanding common stock of TNP.
SW Acquisition was formed on May 21, 1999 by an investor group led by Dr.
William J. Catacosinos, the former chairman and chief executive officer of Long
Island Lighting Company, and by Canadian Imperial Bank of Commerce ("CIBC") for
the purpose of entering into the merger agreement. The general partner of SW
Acquisition is SW I Acquisition GP, L.P., a Texas limited partnership, which is
ultimately controlled by Dr. Catacosinos. The initial limited partners in this
partnership are CIBC WG Argosy Merchant Fund 2, L.L.C., Co-Investment Merchant
Fund 3, LLC, Caravelle Investment Fund, L.L.C., all investment funds managed by
affiliates of CIBC, Continental Casualty Company, an indirect subsidiary of
Loews Corporation, and Laurel Hill Capital Partners, LLC, an entity controlled
by Dr. Catacosinos ("Laurel Hill").
Financing for the Merger
The total financing for the merger was approximately $900.0 million. Of
this amount, $591.6 million was required to pay the merger consideration, and an
estimated $44.8 million is being used to pay costs and expenses related to the
merger. The balance of the financing may be used to refinance certain
indebtedness that TNMP may be required to repurchase as a result of the change
of control of TNP occurring as a result of the merger.
The financing of the merger consists of:
(i) $200.0 million equity investment comprised of:
. $100.0 million of proceeds from the issuance by ST Acquisition
of preferred equity in a private placement to CIBC, Chase
Securities, Inc., Continental Casualty Company and Laurel Hill.
. a $100.0 million contribution in the form of common equity from
SW Acquisition, and
(ii) $700.0 million of debt financing, comprised of
. up to $185.0 million of borrowings (in the form of a $160
million term loan and a $25 million revolving credit facility)
under a senior secured credit facility between ST Acquisition
and CIBC, as Administrative Agent and CIBC World Markets Corp.
and Chase Securities, Inc., as Co-Arrangers and Co-Book
2
<PAGE>
Managers. This credit facility is secured by a pledge of all TNMP
common stock held by TNP.
. $275.0 million from the issuance in a private offering of
10.25% Senior Subordinated Notes due 2010 by ST Acquisition
simultaneously with the merger, and
. up to $240.0 million of borrowings by TNMP under a backstop
credit facility to refinance debt that TNMP may be required to
repurchase as a result of the change of control of TNP
resulting from the merger. TNMP entered into the backstop
credit facility on April 17, 2000, pursuant to a Credit
Agreement as of that date among TNMP, the several lenders from
time to time parties to such Credit Agreement, CIBC, as
Administrative Agent and CIBC World Markets Corp and Chase
Securities Inc., as Co-Arrangers and Co-Book Managers.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
c. Exhibits
2(a) Agreement and Plan of Merger, dated May 24, 1999, by and among SW
Acquisition, L.P., ST Acquisition Corp. and TNP (Incorporated by
reference to Ex. 2, TNP Form 8-K filed June 7, 1999)
2(b) First Amendment to Agreement and Plan of Merger, by and among SW
Acquisition, L.P., ST Acquisition Corp. and TNP, dated August 9, 1999
(Incorporated by reference to Ex. 99.10, TNP Form 8-K filed August 10,
1999).
4(a) Indenture dated as of April 7, 2000 between ST Acquisition Corp., as
Issuer and The Bank of New York, as Trustee, relating to 10.25% Senior
Subordinated Notes due 2010, Series A and 10.25% Senior Subordinated
Notes due 2010, Series B in the aggregate principal amount of
$275,000,000. (the "Senior Subordinate Note Indenture").
4(b) First Supplemental Indenture dated as of April 7, 2000, between TNP
Enterprises, Inc., as Issuer, and The Bank of New York, as Trustee,
supplementing the Senior Subordinated Note Indenture, and relating to
10.25% Senior Subordinated Notes due 2010.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
TNP ENTERPRISES, INC.
April 21, 2000 By: /s/ Theodore A. Babcock
----------------------------------
Theodore A. Babcock
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No: Description
- --- -----------
2(a) Agreement and Plan of Merger, dated May 24, 1999, by and among SW
Acquisition, L.P., ST Acquisition Corp. and TNP (Incorporated by
reference to Ex. 2, TNP Form 8-K filed June 7, 1999)
2(b) First Amendment to Agreement and Plan of Merger, by and among SW
Acquisition, L.P., ST Acquisition Corp. and TNP, dated August 9, 1999
(Incorporated by reference to Ex. 99.10, TNP Form 8-K filed August 10,
1999).
4(a) Indenture dated as of April 7, 2000 between ST Acquisition Corp., as
Issuer and The Bank of New York, as Trustee, relating to 10.25% Senior
Subordinated Notes due 2010, Series A and 10.25% Senior Subordinated
Notes due 2010, Series B in the aggregate principal amount of
$275,000,000. (the "Senior Subordinate Note Indenture").
4(b) First Supplemental Indenture dated as of April 7, 2000, between TNP
Enterprises, Inc., as Issuer, and The Bank of New York, as Trustee,
supplementing the Senior Subordinated Note Indenture, and relating to
10.25% Senior Subordinated Notes due 2010.
<PAGE>
EXHIBIT 4(A)
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ST Acquisition Corp.,
as Issuer,
and
The Bank of New York, as Trustee
-----------------------
INDENTURE
Dated as of April 7, 2000
-----------------------
$275,000,000
10.25% Senior Subordinated Notes due 2010, Series A
10.25% Senior Subordinated Notes due 2010, Series B
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<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- -------
<S> <C>
310(a)(1)................................................... 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A
(b)..................................................... 7.08; 7.10; 13.02
(b)(1).................................................. 7.10
(b)(9).................................................. 7.10
(c)..................................................... N.A.
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.05
(b)..................................................... 13.03
(c)..................................................... 13.03
313(a)..................................................... 7.06
(b)(1).................................................. 7.06
(b)(2).................................................. 7.06
(c)..................................................... 7.06; 13.02
(d)..................................................... 7.06
314(a)..................................................... 4.02; 4.08; 13.02
(b)..................................................... N.A.
(c)(1).................................................. 13.04; 13.05
(c)(2).................................................. 13.04; 13.05
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 13.05
(f)..................................................... N.A.
315(a)..................................................... 7.01; 7.02
(b)..................................................... 7.05; 13.02
(c)..................................................... 7.01
(d)..................................................... 6.05; 7.01; 7.02
(e)..................................................... 6.11
316(a) (last sentence)..................................... 2.09
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. 8.02
(b)..................................................... 6.07
(c)..................................................... 8.04
317(a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.04
318(a)..................................................... 13.01
</TABLE>
N.A. means Not Applicable
____________________
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
<TABLE>
<CAPTION>
Page
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<S> <C>
Section 1.01. Definitions.......................................... 1
Section 1.02. Other Definitions.................................... 29
Section 1.03. Incorporation by Reference of Trust Indenture Act.... 29
Section 1.04. Rules of Construction................................ 30
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating...................................... 30
Section 2.02. Execution and Authentication......................... 31
Section 2.03. Registrar and Paying Agent........................... 32
Section 2.04. Paying Agent to Hold Assets in Trust................. 32
Section 2.05. Noteholder Lists..................................... 32
Section 2.06. Transfer and Exchange................................ 32
Section 2.07. Replacement Notes.................................... 33
Section 2.08. Outstanding Notes.................................... 33
Section 2.09. Treasury Notes....................................... 34
Section 2.10. Temporary Notes...................................... 34
Section 2.11. Cancellation......................................... 34
Section 2.12. Defaulted Interest................................... 34
Section 2.13. Deposit of Moneys.................................... 35
Section 2.14. CUSIP Number......................................... 35
Section 2.15. Book-Entry Provisions for Global Notes............... 35
Section 2.16. Registration of Transfers and Exchanges.............. 36
Section 2.17. Restrictive Legends.................................. 40
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee................................... 41
Section 3.02. Selection of Notes to Be Redeemed.................... 42
Section 3.03. Notice of Redemption................................. 42
Section 3.04. Effect of Notice of Redemption....................... 43
Section 3.05. Deposit of Redemption Price.......................... 43
Section 3.06. Notes Redeemed in Part............................... 43
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes..................................... 43
</TABLE>
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<TABLE>
<S> <C>
Section 4.02. Provision of Financial Statements and Other Information................................... 44
Section 4.03. Waiver of Stay, Extension or Usury Laws................................................... 44
Section 4.04. Compliance Certificate; Notice of Default; Tax Information................................ 44
Section 4.05. Payment of Taxes and Other Claims......................................................... 46
Section 4.06. Corporate Existence....................................................................... 46
Section 4.07. Maintenance of Office or Agency........................................................... 46
Section 4.08. Compliance with Laws...................................................................... 47
Section 4.09. Maintenance of Properties and Insurance................................................... 47
Section 4.10. Limitation on Additional Indebtedness..................................................... 47
Section 4.11. Limitation on Restricted Payments......................................................... 48
Section 4.12. Limitation on Other Senior Subordinated Indebtedness...................................... 50
Section 4.13. Limitation on Asset Sales................................................................. 50
Section 4.14. Limitation on Transactions with Affiliates................................................ 53
Section 4.15. Limitation on Liens....................................................................... 55
Section 4.16. Change of Control......................................................................... 55
Section 4.17. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries... 57
Section 4.18. Limitation on Conduct of Business......................................................... 59
Section 4.19. Limitation on Preferred Stock of Restricted Subsidiaries.................................. 59
Section 4.20. Limitation on Capital Stock of Restricted Subsidiaries.................................... 59
Section 4.21. Limitation on Transfer of Assets to Certain Subsidiaries.................................. 60
Section 4.22. Limitation on Guarantees by Restricted Subsidiaries....................................... 60
Section 4.23. Limitation on Sale and Lease-Back Transactions............................................ 61
Section 4.24. Payments for Consent...................................................................... 61
Section 4.25. Suspension of Certain Covenants if Securities Rated Investment Grade...................... 61
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger and Sale of Assets.................................... 62
Section 5.02. Successor Person Substituted.............................................................. 62
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default......................................................................... 63
Section 6.02. Acceleration.............................................................................. 64
Section 6.03. Other Remedies............................................................................ 65
Section 6.04. Waiver of Past Defaults and Events of Default............................................. 65
Section 6.05. Control by Majority....................................................................... 65
Section 6.06. Limitation on Suits....................................................................... 66
Section 6.07. Rights of Holders to Receive Payment...................................................... 66
Section 6.08. Collection Suit by Trustee................................................................ 66
Section 6.09. Trustee May File Proofs of Claim.......................................................... 67
Section 6.10. Priorities................................................................................ 67
Section 6.11. Undertaking for Costs..................................................................... 67
</TABLE>
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ARTICLE 7
TRUSTEE
<TABLE>
<S> <C>
Section 7.01. Duties of Trustee........................................ 68
Section 7.02. Rights of Trustee........................................ 69
Section 7.03. Individual Rights of Trustee............................. 70
Section 7.04. Trustee's Disclaimer..................................... 70
Section 7.05. Notice of Defaults....................................... 70
Section 7.06. Reports by Trustee to Holders............................ 70
Section 7.07. Compensation and Indemnity............................... 71
Section 7.08. Replacement of Trustee................................... 72
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion. 72
Section 7.10. Eligibility; Disqualification............................ 73
Section 7.11. Preferential Collection of Claims Against Company........ 73
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders............................... 73
Section 8.02. With Consent of Holders.................................. 74
Section 8.03. Compliance with TIA...................................... 75
Section 8.04. Revocation and Effect of Consents........................ 75
Section 8.05. Notation on or Exchange of Notes......................... 76
Section 8.06. Trustee to Sign Amendments, etc.......................... 76
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Satisfaction and Discharge of Indenture.................. 76
Section 9.02. Legal Defeasance......................................... 77
Section 9.03. Covenant Defeasance...................................... 78
Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance.... 78
Section 9.05. Application of Trust Money............................... 80
Section 9.06. Repayment to the Company................................. 80
Section 9.07. Reinstatement............................................ 80
ARTICLE 10
GUARANTEE
Section 10.01. Unconditional Guarantee................................. 81
Section 10.02. Severability............................................ 82
Section 10.03. Limitation on Guarantor's Liability; Contribution....... 82
Section 10.04. Successors and Assigns.................................. 82
Section 10.05. No Waiver............................................... 82
Section 10.06. Release of Guarantor.................................... 82
Section 10.07. Execution of Supplemental Indenture for Future
Guarantors............................................ 83
Section 10.08. Subordination of Subrogation and Other Rights........... 83
</TABLE>
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<PAGE>
ARTICLE 11
SUBORDINATION OF GUARANTEE
<TABLE>
<S> <C>
Section 11.01. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness............... 83
Section 11.02. Payment Over of Proceeds upon Dissolution, etc.................................... 84
Section 11.03. Suspension of Guaranteed Obligations When Guarantor Senior Indebtedness in Default 85
Section 11.04. Trustee's Relation to Guarantor Senior Indebtedness............................... 86
Section 11.05. Subrogation....................................................................... 87
Section 11.06. Guarantee Subordination Provisions Solely to Define Relative Rights............... 87
Section 11.07. Trustee to Effectuate Subordination............................................... 88
Section 11.08. No Waiver of Subordination Provisions............................................. 88
Section 11.09. Notice to Trustee................................................................. 88
Section 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent.................... 89
Section 11.11. No Suspension of Remedies......................................................... 89
ARTICLE 12
SUBORDINATION OF NOTES
Section 12.01. Notes Subordinate to Senior Indebtedness.......................................... 89
Section 12.02. Payment Over of Proceeds upon Dissolution, etc.................................... 90
Section 12.03. Suspension of Payment When Senior Indebtedness in Default......................... 91
Section 12.04. Trustee's Relation to Senior Indebtedness......................................... 92
Section 12.05. Subrogation....................................................................... 92
Section 12.06. Provisions Solely to Define Relative Rights....................................... 93
Section 12.07. Trustee to Effectuate Subordination............................................... 93
Section 12.08. No Waiver of Subordination Provisions............................................. 93
Section 12.09. Notice to Trustee................................................................. 94
Section 12.10. Reliance on Judicial Order or Certificate of Liquidating Agent.................... 94
Section 12.11. No Suspension of Remedies......................................................... 95
ARTICLE 13
MISCELLANEOUS
Section 13.01. TIA Controls...................................................................... 95
Section 13.02. Notices........................................................................... 95
Section 13.03. Communications by Holders with Other Holders...................................... 96
Section 13.04. Certificate and Opinion as to Conditions Precedent................................ 96
Section 13.05. Statements Required in Certificate and Opinion.................................... 97
Section 13.06. Rules by Trustee and Agents....................................................... 97
Section 13.07. Business Days; Legal Holidays..................................................... 97
Section 13.08. Governing Law..................................................................... 97
Section 13.09. No Adverse Interpretation of Other Agreements..................................... 98
Section 13.10. No Recourse Against Others........................................................ 98
Section 13.11. Successors........................................................................ 98
Section 13.12. Multiple Counterparts............................................................. 98
Section 13.13. Table of Contents, Headings, etc.................................................. 98
Section 13.14. Separability...................................................................... 98
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
Exhibit A. Form of Series A Note................................................................................... A-1
Exhibit B. Form of Series B Note................................................................................... B-1
Exhibit C. Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors........ C-1
Exhibit D. Form of Transferee Letter of Representation............................................................. D-1
Exhibit E. Form of Certificate to Be Delivered in Connection with Regulation S Transfers........................... E-1
Exhibit F. Form of Supplemental Indenture.......................................................................... F-1
</TABLE>
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<PAGE>
INDENTURE, dated as of April 7, 2000, between ST Acquisition Corp. and
The Bank of New York, as trustee (the "Trustee").
-------
The Company has duly authorized the creation of an issue of Series A
10.25% Senior Subordinated Notes due 2010 (the "Initial Notes") and Series B
-------------
10.25% Senior Subordinated Notes due 2010 (the "Exchange Notes") and, to provide
--------------
therefor, the Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make the Notes, when duly issued and
executed by the Company, and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, have been done.
The Securities are being sold in connection with the merger (the
"Merger") of ST Acquisition Corp. with and into TNP Enterprises, Inc., with TNP
------
Enterprises, Inc. surviving the Merger. The time of the consummation of the
Merger is referred to herein as the "Effective Time."
--------------
Immediately after the Effective Time, (i) TNP Enterprises, Inc. will
execute an assumption agreement (the "Assumption Agreement"), pursuant to which
--------------------
TNP Enterprises, Inc., as survivor of the Merger, will (a) assume all of the
obligations of ST Acquisition Corp. under the Purchase Agreement, dated as of
March 31, 2000, by and among ST Acquisition Corp. and the Initial Purchasers
(the "Purchase Agreement"); and (c) assume all of the obligations of ST
------------------
Acquisition Corp. under the Registration Rights Agreement, dated as of April 7,
2000, by and among ST Acquisition Corp. and the Initial Purchasers (the
"Registration Rights Agreement"); and (ii) TNP Enterprises, Inc. and the Trustee
-----------------------------
will enter into a first supplemental indenture to this Indenture (the "First
-----
Supplemental Indenture") providing for the express assumption by TNP
- ----------------------
Enterprises, Inc., as survivor of the Merger, of the covenants, agreements and
undertakings of ST Acquisition Corp. in this Indenture and under the Notes.
As used herein, the "Company" shall mean ST Acquisition Corp. prior to
-------
the Effective Time and TNP Enterprises, Inc. as of and after the execution and
delivery of the First Supplemental Indenture. References to this Indenture as
of and after the execution and delivery of the First Supplemental Indenture will
refer to this Indenture and the First Supplemental Indenture and references to
each of the Purchase Agreement and the Registration Rights Agreement as of and
after the Effective Time will refer to such agreement together with the
Assumption Agreement.
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a Person (including
---------------------
an Unrestricted Subsidiary) existing at the time such Person becomes a
Restricted Subsidiary or is merged into or consolidated with any other Person or
which is assumed in connection with the acquisition of assets from such Person
and, in each case, whether or not incurred by such Person in connection with, or
in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary or such merger, consolidation or acquisition.
<PAGE>
-2-
"Additional Interest" has the meaning provided to such term in
-------------------
the Registration Rights Agreement.
"Adjusted Net Assets" of any Person at any date means the lesser
-------------------
of the amount by which
(1) the fair value of the property of such Person exceeds
the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed
and contingent liabilities), but excluding liabilities under the
Guarantee of such Person at such date; and
(2) the present fair salable value of the assets of such
Person at such date exceeds the amount that will be required to
pay the probable liability of such Person on its debts (after
giving effect to all other fixed and contingent liabilities and
after giving effect to any collection from any Subsidiary of such
Person in respect of the obligations of such Person under the
Guarantee of such Person), excluding Indebtedness in respect of
the Guarantee of such Person, as they become absolute and
matured.
"Affiliate" means, with respect to any specific Person, any other
---------
Person that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. For
the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by," and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that, for purposes of Section 4.14 of this
Indenture, beneficial ownership of at least 10% of the voting securities of a
Person, either directly or indirectly, shall be deemed to be control.
"Agent" means any Registrar, Paying Agent, co-Registrar,
-----
Authenticating Agent or agent for service of notices and demands.
"Asset Acquisition" means
-----------------
(1) an Investment by the Company or any Restricted
Subsidiary of the Company in any other Person pursuant to which
such Person becomes a Restricted Subsidiary of the Company, or is
merged with or into the Company or any Restricted Subsidiary of
the Company; or
(2) the acquisition by the Company or any Restricted
Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or
substantially all of the assets of such Person or comprise any
division or line of business of such Person or any other
Properties or assets of such Person other than in the ordinary
course of business.
"Asset Sale" means any direct or indirect sale, issuance,
----------
conveyance, assignment, transfer, lease or other disposition (including any Sale
and Lease-Back Transaction), other than to the Company or any of its Wholly
Owned Subsidiaries, in any single transaction or series of related transactions
of
(1) any Capital Stock of or other equity interest in any
Restricted Subsidiary of the Company; or
<PAGE>
-3-
(2) any other Property or assets of the Company or of any
Restricted Subsidiary thereof;
provided that Asset Sales shall not include
(1) a transaction or series of related transactions that
involves assets having a fair market value or for which the
Company or its Restricted Subsidiaries receive aggregate
consideration of less than $1.0 million;
(2) sales of inventory and vehicles in the ordinary
course of business and consistent with past practices;
(3) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the assets of the Company
as permitted under Section 5.01 of this Indenture;
(4) a disposition of obsolete, worn-out, damaged or
otherwise unsuitable or unnecessary equipment or other obsolete
assets;
(5) dispositions with respect to sales of excess energy,
capacity and rights of use in the Company's distribution network
in the ordinary course of the electricity transmission and
distribution business and the electricity generation business;
(6) a sale-leaseback of assets within one year of the
acquisition of such assets; and
(7) a transaction or series of transactions that results
in a Change of Control.
"Asset Sale Proceeds" means, with respect to any Asset Sale,
-------------------
(1) cash received by the Company or any Restricted
Subsidiary of the Company from such Asset Sale (including cash
received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset
Sale), after
(a) provision for all income or other taxes measured
by or resulting from such Asset Sale,
(b) payment of all brokerage commissions,
underwriting and other fees and expenses related to such
Asset Sale,
(c) provision for minority interest holders in any
Restricted Subsidiary of the Company as a result of such
Asset Sale,
(d) repayment of Indebtedness that is secured by the
assets subject to such Asset Sale or otherwise required to
be repaid in connection with such Asset Sale, and
(e) deduction of appropriate amounts to be provided
by the Company or a Restricted Subsidiary of the Company as
a reserve, in accordance with GAAP,
<PAGE>
-4-
against any liabilities associated with the assets sold or
disposed of in such Asset Sale and retained by the Company or a
Restricted Subsidiary after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities
and liabilities related to environmental matters or against any
indemnification obligations associated with the assets sold or
disposed of in such Asset Sale; and
(2) promissory notes and other non-cash consideration received by
the Company or any Restricted Subsidiary of the Company from such
Asset Sale or other disposition upon the liquidation or conversion of
such promissory notes or non-cash consideration into cash.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
-------------------------
Transaction means, as at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction, determined in
accordance with GAAP) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such Sale and Lease-Back
Transaction (including any period for which such lease has been extended).
"Board of Directors" means, with respect to any Person, the board of
------------------
directors of such Person (or, if such Person is a partnership, the board of
directors or other governing body of the general partner (or, if there is more
than one general partner of such person, the general partner or general partners
which may take the applicable action pursuant to the partnership agreement of
such Person) of such Person or, if such Person is a limited liability company,
the board of managers of such company) or similar governing body or any duly
authorized committee thereof.
"Board Resolution" means with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification and delivered to the
Trustee.
"Capital Stock" means, with respect to any Person, any and all shares,
-------------
interests, participations or other equivalents (however designated and whether
or not voting) of corporate stock, partnership or limited liability company
interests or any other participation, right or other interest in the nature of
an equity interest in such Person including, without limitation, Common Stock
and Preferred Stock of such Person, or any option, warrant or other security
convertible into any of the foregoing.
"Capitalized Lease Obligations" means with respect to any Person,
-----------------------------
Indebtedness represented by obligations under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such Indebtedness shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Cash Equivalents" means
----------------
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency or
instrumentality thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof;
(2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
<PAGE>
-5-
having one of the two highest ratings obtainable from either Standard
&Poor's Corporation ("S&P") or Moody's Investors Service, Inc.
---
("Moody's");
-------
(3) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any
bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $500.0 million;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1)
above entered into with any bank meeting the qualifications specified
in clause (4) above; and
(6) investments in money market funds which invest
substantially all their assets in securities of the types described in
clauses (1) through (5) above.
"Certificated Notes" means one or more certificated Notes in
------------------
registered form.
A "Change of Control" of the Company shall be deemed to have occurred
-----------------
at such time as
(1) any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), other than a Permitted
Holder, becomes the beneficial owner (as defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of
all securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time) of
more than 50% of the total voting power of the Company's Capital
Stock;
(2) there is consummated any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company or TNMP to any
Person or Group, together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of this Indenture);
(3) there is consummated any consolidation or merger of the
Company or TNMP in which the Company or TNMP, as the case may be, is
not the continuing or surviving Person or pursuant to which the Common
Stock of the Company or TNMP, as the case may be, would be converted
into cash, securities or other Property, other than a merger or
consolidation of the Company in which the holders of the Capital Stock
of the Company outstanding immediately prior to the consolidation or
merger hold, directly or indirectly, at least a majority of the
Capital Stock of the surviving corporation immediately after such
consolidation or merger;
(4) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of
the Company or TNMP (together
<PAGE>
-6-
with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Company or
TNMP, as the case may be, has been approved by 66 2/3% of the
directors then still in office who either were directors at the
beginning of such period or whose election or recommendation for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company or
TNMP, as the case may be, then in office;
(5) the approval by the holders of Capital Stock of the Company
or TNMP of any plan or proposal for the liquidation or dissolution of
the Company or TNMP, as the case may be (whether or not otherwise in
compliance with the provisions of this Indenture); or
(6) any order, judgment or decree shall be entered against the
Company or TNMP decreeing the dissolution or split-up of the Company
or TNMP, as the case may be; provided that any sale, assignment,
conveyance, transfer or other disposition of TNMP's assets to another
Restricted Subsidiary in connection with the Company's compliance with
Texas Senate Bill 7 shall not be deemed to be a Change of Control
hereunder.
"Common Stock" of any Person means all Capital Stock of such Person
------------
that is generally entitled to
(1) vote in the election of directors of such Person; or
(2) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers
or others that will control the management and policies of such
Person.
"Company" has the meaning provided in the fifth paragraph of this
-------
Indenture until a successor replaces the Company pursuant to Article 5 of this
Indenture and thereafter means the successor.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
----------------------------------------
Person, the ratio of EBITDA of such Person during the four full fiscal quarters
(the "Four Quarter Period") ending on or prior to the date of the transaction
-------------------
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for
----------------
the Four Quarter Period. In addition to and without limitation of the foregoing,
for purposes of this definition, "EBITDA" and "Consolidated Fixed Charges" shall
------ --------------------------
be calculated after giving effect on a pro forma basis for the period of such
calculation to
(1) the incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries or the issuance or
redemption or other repayment of Preferred Stock of any such
Restricted Subsidiary (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or
repayment of other Indebtedness and, in the case of any Restricted
Subsidiary, the issuance or redemption or other repayment of Preferred
Stock (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of
business for working capital purposes pursuant to working capital
facilities, occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date, as if such incurrence or repayment or
issuance or redemption or other repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the
Four Quarter Period; and
<PAGE>
-7-
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary
as a result of the Asset Acquisition) incurring, assuming or otherwise
being liable for Acquired Indebtedness and also including any EBITDA
(provided that such EBITDA shall be included only to the extent that
Consolidated Net Income would be includable pursuant to the definition
of "Consolidated Net Income") (including any pro forma expense and
-----------------------
cost reductions calculated on a basis consistent with Regulation S-X
of the Exchange Act) attributable to the assets which are the subject
of the Asset Acquisition or Asset Sale during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to
the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such
Acquired Indebtedness) occurred on the first day of the Four Quarter
Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
--------------------------
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio,"
-----------------------------------------
(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue
to be so determined thereafter shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect
during the Four Quarter Period; and
(3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is
covered by one or more Hedging Obligations, shall be deemed to accrue
at the rate per annum resulting after giving effect to the operation
of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person, for
--------------------------
any period, the sum, without duplication, of
(1) Consolidated Interest Expense, plus
(2) the product of
(a) the amount of all dividend payments (whether or not in
cash) on any series of Preferred Stock of such Person and its
Restricted Subsidiaries (other than dividends paid in Capital
Stock (other than Disqualified Capital Stock)) paid, accrued or
scheduled to be paid or accrued during such period times
<PAGE>
-8-
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person,
expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person, for
-----------------------------
any period, the aggregate amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or any like caption
on an income statement for such Person and its Restricted Subsidiaries on a
consolidated basis including, but not limited to,
(1) imputed interest included in Capitalized Lease Obligations
and Attributable Indebtedness;
(2) all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(3) the net payment obligations associated with Hedging
Obligations;
(4) amortization of financing fees and expenses and the write-
off of deferred financing costs;
(5) the interest portion of any deferred payment obligation;
(6) amortization of discount or premium, if any;
(7) all non-cash interest expense (other than interest amortized
to cost of sales);
(8) all capitalized interest for such period; and
(9) all interest incurred or paid under any guarantee of
Indebtedness (including a guarantee of principal, interest or any
combination thereof) of any Person.
"Consolidated Leverage Ratio" means, with respect to any Person, the
---------------------------
ratio of
(1) the sum of the aggregate outstanding amount of Indebtedness
of such Person and its Restricted Subsidiaries and Preferred Stock of
any such Restricted Subsidiary issued in accordance with Section 4.19
as of the date of calculation (the "Transaction Date") on a
consolidated basis determined in accordance with GAAP to
(2) such Person's EBITDA for the four full fiscal quarters (the
"Four Quarter Period") ending on or prior to the date of determination
for which financial statements are available.
For purposes of this definition, clauses (1) and (2) above will be calculated
after giving effect on a pro forma basis to
(1) any incurrence or repayment of Indebtedness and, in the
case of any Restricted Subsidiary, the issuance or redemption or other
repayment of Preferred Stock (and the application of the proceeds
thereof), other than the incurrence or repayment of Indebtedness in
<PAGE>
-9-
the ordinary course of business for working capital purposes pursuant
to working capital facilities, occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter
Period and on or prior to the Transaction Date, as if such incurrence
or repayment or issuance or redemption or other repayment, as the case
may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period; and
(2) any Asset Sales or Asset Acquisitions (including any EBITDA
(provided that such EBITDA will be included only to the extent that
Consolidated Income would be includable pursuant to the definition of
"Consolidated Net Income") (including any pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X of the
Exchange Act) attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to
the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any Acquired
Indebtedness) occurred on the first day of the Four Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
will give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary or such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness.
"Consolidated Net Income" means, with respect to any Person, for any
-----------------------
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that
(1) the portion of Net Income of any Person, other than a
Restricted Subsidiary of the referent Person, shall be included only
to the extent of the amount of dividends or distributions paid to the
referent Person or a Restricted Subsidiary of such referent Person;
(2) the Net Income of any Restricted Subsidiary of the Person
in question that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions shall be
excluded to the extent of, and for only the period of time that, such
restriction or limitation actually prohibits the payment of such
dividends or the making of such other distributions;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) any net gain (but not loss) resulting from an Asset Sale by
the Person in question or any of its Restricted Subsidiaries other
than in the ordinary course of business shall be excluded;
(5) extraordinary gains and losses shall be excluded;
(6) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontinued)
shall be excluded; and
<PAGE>
-10-
(7) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's
assets, any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets shall be excluded.
"Corporate Trust Office" means the office of the Trustee at which at
----------------------
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"Cumulative Consolidated Net Income" means, with respect to any
----------------------------------
Person, as of any date of determination, the Consolidated Net Income of such
Person from April 1, 2000 to the end of such Person's most recently ended full
fiscal quarter prior to such date, taken as a single accounting period.
"Default" means an event or condition the occurrence of which is, or
-------
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Notes issued in the form of
----------
one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness," as to the Company, means
------------------------------
(1) any Senior Indebtedness under the Senior Credit Facility;
and
(2) after the Senior Credit Facility has been paid in full and
terminated, any other Senior Indebtedness permitted under this
Indenture, (x) the principal amount of which is $50.0 million or more
and (y) has been designated by the Company in the instrument
evidencing such Senior Indebtedness as "Designated Senior
Indebtedness" and as to which the Trustee has been given written
notice of such designation.
"Disqualified Capital Stock" means any Capital Stock of a Person or a
--------------------------
Restricted Subsidiary thereof which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable at the
option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Person or a Restricted
Subsidiary of such Person, with respect to either of which, under the terms of
such Preferred Stock, by agreement or otherwise, such Person or Restricted
Subsidiary is obligated to pay current dividends or distributions in cash during
the period prior to the maturity date of the Notes; provided, however, that
Preferred Stock of a Person or any Restricted Subsidiary thereof that is issued
with the benefit of provisions requiring a change of control offer to be made
for such Preferred Stock in the event of a change of control of such Person or
Restricted Subsidiary which provisions have substantially the same effect as the
provisions described under Section 4.16 of this Indenture shall not be deemed to
be Disqualified Capital Stock solely by virtue of such provisions.
"EBITDA" means, with respect to any Person and its Restricted
------
Subsidiaries, for any period, an amount equal to
(1) the sum of
<PAGE>
-11-
(a) Consolidated Net Income for such period, plus
(b) the provision for taxes for such period based on income
or profits to the extent such income or profits were included in
computing Consolidated Net Income and any provision for taxes
utilized in computing net loss under clause (a) hereof, plus
(c) Consolidated Interest Expense for such period, plus
(d) depreciation for such period on a consolidated basis,
plus
(e) amortization of intangibles for such period on a
consolidated basis, plus
(f) any other non-cash items reducing Consolidated Net
Income for such period (other than any non-cash item requiring an
accrual or reserve for cash disbursements in any future period);
minus
(2) all non-cash items increasing Consolidated Net Income
(other than any non-cash items that were accrued in the ordinary
course of business) for such period,
all for such Person and its Restricted Subsidiaries determined on a consolidated
basis in accordance with GAAP; provided, however, that, for purposes of
calculating EBITDA during any fiscal quarter, cash income from a particular
Investment (other than a Restricted Subsidiary) of such Person shall be included
only
(1) if cash income has been received by such Person with
respect to such Investment during each of the previous four fiscal
quarters, or
(2) if the cash income derived from such Investment is
attributable to Cash Equivalents.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the SEC promulgated thereunder.
"Exchange Notes" has the meaning provided in the preamble to this
--------------
Indenture.
"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,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution.
"GAAP" means generally accepted accounting principles consistently
----
applied as in effect in the United States from time to time.
"Guarantee" means any guarantee by a Guarantor of the obligations of
---------
the Company with respect to the Notes.
<PAGE>
-12-
"Guarantor" means the issuer at any time of a guarantee (so long as
---------
such guarantee remains outstanding).
"Guarantor Senior Indebtedness" means the principal of and premium, if
-----------------------------
any, and interest on, and any and all other fees, expense reimbursement
obligations and other amounts due pursuant to the terms of all agreements,
documents and instruments providing for, creating, securing or evidencing or
otherwise entered into in connection with all Indebtedness of any Guarantor owed
to lenders under the Senior Credit Facility; all obligations of any Guarantor
with respect to Hedging Obligations; all obligations of any Guarantor to
reimburse any bank or other Person in respect of amounts paid under letters of
credit, acceptances or other similar instruments; all other Indebtedness of any
Guarantor which does not provide that it is to rank equally with or subordinate
to the Guarantee of such Guarantor; and all deferrals, renewals, extensions and
refundings of, and amendments, modifications and supplements to, any of the
Guarantor Senior Indebtedness described above. Notwithstanding anything to the
contrary in the foregoing, Guarantor Senior Indebtedness shall not include
Indebtedness of any Guarantor to any of its Subsidiaries, or to any Affiliate of
such Guarantor or any of such Affiliate's Subsidiaries; Indebtedness represented
by the Guarantees; and Indebtedness which by the express terms of the agreement
or instrument creating, evidencing or governing the same is junior or
subordinate in right of payment to any item of Guarantor Senior Indebtedness;
any trade payable arising from the purchase of goods or materials or for
services obtained in the ordinary course of business; Indebtedness incurred in
violation of this Indenture; Indebtedness represented by Disqualified Capital
Stock; and any Indebtedness to or guaranteed on behalf of, any shareholder,
director, officer or employee of such Guarantor or any Subsidiary of such
Guarantor.
"Hedging Obligations" means, with respect to any Person, the net
-------------------
payment obligations of such Person under
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements and
(2) other agreements or arrangements entered into in order to
protect such Person against fluctuations in commodity, electricity or
fuel prices, interest rates or currency exchange rates.
"Holder" or "Noteholder" means a Person in whose name a Note is
------ ----------
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
-----
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "incurrence," "incurred," "incurable," and "incurring" shall have meanings
---------- -------- --------- ---------
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any
------------
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any Property if and to the extent any of the foregoing indebtedness
would appear as a liability
<PAGE>
-13-
upon a balance sheet of such Person prepared in accordance with GAAP, and shall
also include, to the extent not otherwise included,
(1) any Capitalized Lease Obligations of such Person;
(2) obligations secured by a lien to which the Property or
assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed;
(3) guarantees of (or obligations with respect to letters of
credit supporting) items of other Persons which would be included
within this definition for such other Persons (whether or not such
items would appear upon the balance sheet of the guarantor);
(4) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction;
(5) Disqualified Capital Stock of such Person or any Restricted
Subsidiary thereof and any Preferred Stock of a Restricted Subsidiary
of such Person incurred under Section 4.19 of this Indenture; and
(6) hedging obligations of any such Person applicable to any of
the foregoing (if and to the extent such hedging obligations would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP).
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; provided that
(1) the amount outstanding at any time of any Indebtedness issued
with original issue discount is the principal amount of such
Indebtedness less the remaining unamortized portion of the original
issue discount of such Indebtedness at such time as determined in
conformity with GAAP; and
(2) Indebtedness shall not include
(a) any liability for federal, state, local or other taxes,
and
(b) any accounts payable, trade payables and other accrued
liabilities arising from the purchase of goods or materials or
for services obtained in the ordinary course of business.
"Indenture" means this Indenture as amended, restated or supplemented
---------
from time to time.
"Independent Financial Advisor" means an investment banking, financial
-----------------------------
advisory, valuation or accounting firm of national reputation in the United
States
(1) which does not, and whose directors, officers and employees
or Affiliates do not, have a direct or indirect financial interest in
the Company, and
<PAGE>
-14-
(2) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the task
for which it is to be engaged.
Notwithstanding the foregoing, CIBC and its Affiliates shall be deemed to be
Independent Financial Advisors.
"Initial Notes" has the meaning provided in the preamble to this
-------------
Indenture.
"Initial Purchasers" refers to CIBC World Markets Corp., Chase
------------------
Securities Inc. and Barclays Capital Inc.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
promulgated under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
---------------------
interest on the Notes.
"Investment Grade Rating" means a rating equal to or higher than Baa3
-----------------------
(or the equivalent) and BBB- (or the equivalent) by Moody's Investors Service,
Inc. (or any successor to the rating agency business thereof) and Standard &
Poor's Ratings Service, a division of McGraw Hill, Inc. (or any successor to the
rating agency business thereof), respectively.
"Investments" means, with respect of any Person, directly or
-----------
indirectly, any advance, account receivable (other than an account receivable
arising in the ordinary course of business of such Person), loan or capital
contribution to (by means of transfers of Property to others, payments for
Property or services for the account or use of others or otherwise), the
purchase of any Capital Stock, bonds, notes, debentures, partnership or joint
venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the making of any
investment in any Person. Investments shall exclude
(1) extensions of trade credit on commercially reasonable terms
in accordance with normal trade practices of such Person; and
(2) the repurchase of securities of any Person by such Person.
For the purposes of Section 4.11 of this Indenture, (1) "Investments" (a)
include and are valued at the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and (b) exclude the fair market value of the net
assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary, provided that, in no event may
such amount exceed the net amount of any Investments constituting Restricted
Payments made in such Subsidiary after the Issue Date and (2) the amount of any
Investment shall be the original cost of such Investment plus the cost of all
additional Investments by the Company or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the (i)
amount returned in cash with respect to such Investment whether through interest
payments, principal payments, dividends or other distributions and (ii) proceeds
received by the Company or any of its Restricted Subsidiaries from the
disposition, retirement or redemption of all or any portion of such Investment;
provided that the aggregate of all such reductions may not exceed the amount of
such initial Investment plus the cost of all additional Investments; provided,
further, that no such payment of distributions or receipt of any such other
amounts may reduce the amount of any Investment if such payment of distributions
or receipt of any such amounts would be included in Consolidated Net Income. If
the Company or any Restricted Subsidiary
<PAGE>
-15-
of the Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, the Company no longer owns, directly or
indirectly, 100% of the outstanding Common Stock of such Restricted Subsidiary,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.
"Issue Date" means April 7, 2000.
----------
"Lien" means, with respect to any Property or assets of any Person,
----
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Maturity Date" means April 1, 2010.
-------------
"Net Income" means, with respect to any Person, for any period, the
----------
net income (loss) of such Person determined in accordance with GAAP.
"Net Proceeds" means
------------
(1) in the case of any sale of Capital Stock by or equity
contribution to any Person, the aggregate net proceeds received by
such Person, after payment of expenses, commissions and the like
incurred in connection therewith,
(2) in the case of any exchange, exercise, conversion or
surrender of outstanding securities of any kind for or into shares of
Capital Stock of the Company which is not Disqualified Capital Stock,
the net book value of such outstanding securities on the date of such
exchange, exercise, conversion or surrender (plus any additional
amount required to be paid by the holder to such Person upon such
exchange, exercise, conversion or surrender, less any and all payments
made to the holders, e.g., on account of fractional shares and less
---
all expenses incurred by such Person in connection therewith), and
(3) in the case of any issuance of any Indebtedness by the
Company or any Restricted Subsidiary, the aggregate net cash proceeds
received by such Person after the payments of expenses, commissions,
underwriting discounts and the like incurred in connection therewith.
"Non-Payment Default" means any event (other than a Payment Default)
-------------------
the occurrence of which entitles one or more Persons to accelerate the maturity
of any Designated Senior Indebtedness.
"Notes" means the Initial Notes and the Exchange Notes treated as a
-----
single class of securities, as amended or supplemented from time to time in
accordance wit the terms hereof, that are issued pursuant to this Indenture.
"Officer" means, with respect to any Person, the Chief Executive
-------
Officer, the Chief Financial Officer, Chief Accounting Officer, Treasurer,
President or any Vice President of such Person.
<PAGE>
-16-
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by the Chief Executive Officer, the President or any Vice
President and the Chief Financial Officer, Chief Accounting Officer or any
Treasurer of such Person that shall comply with applicable provisions of this
Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who
------------------
and which is acceptable to the Trustee complying with the requirements of this
Indenture. Such legal counsel shall be outside counsel and not an employee of
or in-house counsel to the Company.
"Payment Default" means any default, whether or not any requirement
---------------
for the giving of notice, the lapse of time or both, or any other condition to
such default becoming an event of default has occurred, in the payment of
principal of or premium, if any, or interest on or any other amount payable in
connection with Designated Senior Indebtedness.
"Permitted Asset Swap" means, with respect to any Person, the
--------------------
substantially concurrent exchange of assets of such Person for assets of another
Person which are useful to the business of such aforementioned Person.
"Permitted Holders" means Laurel Hill Capital Partners LLC, Caravelle
-----------------
Investment Fund, L.L.C., CIBC WG Argosy Merchant Fund 2, L.L.C., Co-Investment
Merchant Fund 3, L.L.C., Continental Casualty Company and their respective
affiliates, other than their portfolio companies.
"Permitted Indebtedness" means:
----------------------
(1) Indebtedness of the Company or any Restricted Subsidiary
arising under or in connection with the Senior Credit Facility, in an
aggregate principal amount not to exceed $185.0 million at any time
outstanding less any mandatory prepayments actually made thereunder
(to the extent, in the case of payments of revolving credit
borrowings, that the corresponding commitments have been permanently
reduced) or scheduled payments actually made thereunder;
(2) Indebtedness under the Notes and this Indenture;
(3) Indebtedness not covered by any other clause of this
definition which is outstanding on the Issue Date reduced by the
amount of any mandatory prepayments, permanent reductions or scheduled
payments actually made thereunder;
(4) Indebtedness of the Company to any Wholly Owned Subsidiary
and Indebtedness of any Wholly Owned Subsidiary to the Company or
another Wholly Owned Subsidiary, in each case subject to no Lien held
by a Person other than the Company; provided, however, that:
(a) if the Company is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinate in right of payment to
the prior payment in full in cash of all obligations with respect
to the Notes, in the case of the Company; and
(b) if as of any date any Person other than the Company or a
Wholly Owned Subsidiary of the Company owns or holds any such
Indebtedness or if as of any date any Person other than the
Company holds a Lien in respect of such Indebt-
<PAGE>
-17-
edness, such Indebtedness or Lien shall be deemed to constitute
an incurrence of Indebtedness not permitted by this clause (4);
(5) Purchase Money Indebtedness and Capitalized Lease
Obligations incurred to acquire Property in the ordinary course of
business which Purchase Money Indebtedness and Capitalized Lease
Obligations do not in the aggregate exceed $10.0 million at any one
time outstanding;
(6) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument inadvertently (except in the case
of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business;
(7) the incurrence by the Company or any Restricted Subsidiary
of Hedging Obligations that are incurred in the ordinary course of
business of the Company or such Restricted Subsidiary and not for
speculative purposes; provided that, in the case of any Hedging
Obligation that relates to
(a) interest rate risk, the notional principal amount of
such Hedging Obligation does not exceed the principal amount of
the Indebtedness to which such Hedging Obligation relates and
(b) currency risk, such Hedging Obligation does not increase
the Indebtedness of the Company and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(8) Indebtedness of a Restricted Subsidiary (other than any
Regulated Restricted Subsidiary) of the Company assumed by the Company
to the extent such Indebtedness was permitted to be incurred by such
Restricted Subsidiary at the time of incurrence thereof;
(9) Refinancing Indebtedness;
(10) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations,
in each case, incurred or assumed in connection with the disposition
of any business, assets or a Restricted Subsidiary of the Company,
other than guarantees of Indebtedness incurred by any Person acquiring
all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition; provided that the
maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds actually received by the Company
and its Restricted Subsidiaries in connection with such disposition;
(11) Indebtedness consisting of performance and other similar
bonds and reimbursement obligations incurred by the Company in the
ordinary course of business securing the performance of contractual,
franchise, license or other obligations of the Company or a Restricted
Subsidiary;
<PAGE>
-18-
(12) Indebtedness of a Receivables Subsidiary that is not
recourse to the Company or any other Restricted Subsidiary (other than
with respect to Standard Securitization Undertakings) in connection
with a Qualified Receivables Transaction;
(13) Indebtedness of the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to
bankers' acceptances and letters of credit issued in the ordinary
course of business in respect of workers' compensation claims or self-
insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; provided, however,
that obligations arising upon the drawing of such letters of credit or
the incurrence of such Indebtedness are reimbursed within 30 days
following such drawing or incurrence;
(14) the accrual of interest, the issuance of additional
Indebtedness in the form of additional promissory notes or otherwise
in lieu of the payment of cash interest and the accretion of accreted
value; and
(15) additional Indebtedness of the Company and its Restricted
Subsidiaries (other than its Regulated Restricted Subsidiaries) not to
exceed $25.0 million in aggregate principal amount at any one time
outstanding (which may be, but shall not be required to be, in the
form of additional Indebtedness under the Senior Credit Facility).
"Permitted Investments" means Investments made on or after the Issue
---------------------
Date consisting of:
(1) Investments by the Company, or by a Restricted Subsidiary
thereof, in the Company or a Wholly Owned Subsidiary;
(2) Investments by the Company, or by a Restricted Subsidiary
thereof, in a Person, if as a result of such Investment
(a) such Person becomes a Wholly Owned Subsidiary of the
Company, or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Wholly Owned
Subsidiary thereof;
(3) Investments in cash and Cash Equivalents;
(4) reasonable and customary loans made to employees not to
exceed $2.0 million in the aggregate at any one time outstanding;
(5) an Investment that is made by the Company or a Restricted
Subsidiary thereof in the form of any Capital Stock, bonds, notes,
debentures, partnership or joint venture interests or other securities
that are issued by a third party to the Company or such Restricted
Subsidiary solely as partial consideration for the consummation of an
Asset Sale that is otherwise permitted under Section 4.13 of this
Indenture;
<PAGE>
-19-
(6) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or
customers;
(7) Hedging Obligations entered into in the ordinary course of
the Company's or its Restricted Subsidiaries' business and not for
speculative purposes;
(8) any Investment solely in exchange for the issuance of equity
interests (other than Disqualified Capital Stock) of the Company;
(9) the contribution by the Company of any portion or all of the
undeveloped sites located on the 2,700 acres adjacent to TNP One to
any Person in exchange for an equity interest in such Person; provided
that such Person may not be a Subsidiary of the Company; provided,
further, that (a) at or prior to the time of such contribution, the
Company shall have received a minimum of $150 million of gross
proceeds from the sale of TNP One and (b) at the time of such
contribution, the Company's Consolidated Leverage Ratio is equal to or
less than 4.5 to 1.0.; and
(10) additional Investments not to exceed $10.0 million at any
one time outstanding.
"Permitted Liens" means
---------------
(1) Liens on Property or assets of, or any shares of Capital
Stock of or secured Indebtedness of, any Person existing at the time
such Person becomes a Restricted Subsidiary of the Company or at the
time such Person is merged into the Company or any of its Restricted
Subsidiaries; provided that such Liens
(a) are not incurred in connection with, or in contemplation
of, such Person becoming a Restricted Subsidiary of the Company
or merging into the Company or any of its Restricted
Subsidiaries, and
(b) do not extend to or cover any Property, assets, Capital
Stock or Indebtedness other than those of such Person at the time
such Person becomes a Restricted Subsidiary or is merged into the
Company or any of its Restricted Subsidiaries;
(2) Liens securing Senior Indebtedness which Senior Indebtedness
is outstanding on the Issue Date or incurred in compliance with
Section 4.10 of this Indenture;
(3) Liens existing on the Issue Date;
(4) Liens securing the Notes and Liens in favor of the Trustee
and any Lien granted in respect of amounts owed to the Trustee or to
any trustee or similar institution under any indenture for
Indebtedness permitted under this Indenture;
<PAGE>
-20-
(5) Liens securing Refinancing Indebtedness; provided that any
such Lien does not extend to or cover any Property, asset, Capital
Stock or Indebtedness other than the Property, asset, Capital Stock or
Indebtedness so refunded, refinanced or extended;
(6) Liens in favor of the Company or any of its Restricted
Subsidiaries (other than any Regulated Restricted Subsidiary);
(7) Liens to secure Purchase Money Indebtedness that is
otherwise permitted under this Indenture; provided that
(a) the principal amount of the Indebtedness secured by such
Lien does not exceed 100% of the purchase price, or the cost of
installation, construction or improvement, of the Property or
asset to which such Purchase Money Indebtedness relates,
(b) such Lien does not extend to or cover any Property or
asset other than such item of Property or asset and any
improvements on such Property or asset, and
(c) such Lien is created at the time of such acquisition or
within 100 days of such acquisition or the completion of such
installation, construction or improvement, as the case may be;
(8) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
imposed by law arising in the ordinary course of business which do not
secure any Indebtedness and with respect to amounts not yet delinquent
or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provision, if any, as is required in
conformity with GAAP have been made therefor;
(9) Liens for taxes, assessments or governmental charges that
are being contested in good faith by appropriate proceedings;
(10) Liens securing Capitalized Lease Obligations permitted to be
incurred under clause (5) of the definition of "Permitted
Indebtedness"; provided that such Lien does not extend to any Property
other than that subject to the underlying lease;
(11) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(12) Liens incurred on deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, governmental contracts, performance, completion
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money) or to secure
obligations arising from statutory, regulatory, contractual or
warranty requirements;
<PAGE>
-21-
(13) judgment Liens not giving rise to a Default or an Event of
Default so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of
such judgment shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired;
(14) Liens relating to Hedging Obligations;
(15) Liens in favor of the Company securing intercompany
Indebtedness issued by any Restricted Subsidiary to the Company;
(16) Liens securing reimbursement obligations with respect to
letters of credit incurred in the ordinary course which encumber
documents and other property relating to such letters of credit and
the products and proceeds thereof; provided, the Indebtedness
represented thereby is permitted under this Indenture;
(17) Liens on Capital Stock of Unrestricted Subsidiaries;
(18) other Liens securing obligations incurred in the ordinary
course of business which obligations do not exceed $1.0 million in the
aggregate at any one time outstanding; and
(19) any extensions, substitutions, replacements or renewals of
the foregoing.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
"Preferred Stock" means any Capital Stock of a Person, however
---------------
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Property" of any Person means all types of real, personal, tangible,
--------
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Public Equity Offering" means a public offering by the Company of
----------------------
shares of its Common Stock (however designated and whether voting or non-voting)
and any and all rights, warrants or options to acquire such Common Stock.
"Purchase Money Indebtedness" means Indebtedness of any Person
---------------------------
incurred in the normal course of business of such Person for the purpose of
financing all or any part of the purchase price, or the cost of installation,
construction or improvement of, any Property or asset.
"Qualified Institutional Buyer" shall have the meaning specified in
-----------------------------
Rule 144A promulgated under the Securities Act.
"Qualified Receivables Transaction" means any transaction or series of
---------------------------------
transactions that may be entered into by the Company or any Restricted
Subsidiary pursuant to which the Company or any Restricted Subsidiary may sell,
convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a
transfer by the
<PAGE>
-22-
Company or any Restricted Subsidiary) and (b) any other Person (in the case of a
transfer by a Receivables Subsidiary), or may grant a security interest in, any
accounts receivable (whether now existing or arising in the future) of the
Company or any Restricted Subsidiary and any asset related thereto, including,
without limitation, all collateral securing the accounts receivable, all
contracts and all guarantees or other obligations in respect of the accounts
receivable, proceeds of the accounts receivable and other assets which are
customarily transferred, or in respect of which security interests are
customarily granted, in connection with asset securitization transactions
involving accounts receivable. In addition, "Qualified Receivables Transaction"
shall include any financing transaction by the Company or any Restricted
Subsidiary under Chapter 39, Subchapter G of the Texas Public Utility Regulatory
Act or any analogous law which the Company or such Restricted Subsidiary is
subject to.
"Rating Agencies" means Standard & Poor's Ratings Service, a division
---------------
of McGraw Hill, Inc., and Moody's Investors Service, Inc. or any successor to
the respective rating agency businesses thereof.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the
----------------------
Company which engages in no activities other than in connection with the
financing of accounts receivable and which is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary:
(1) has no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which
(a) guaranteed by the Company or any other Restricted
Subsidiary (excluding guarantees of obligations pursuant to
Standard Securitization Undertakings),
(b) is recourse to or obligates the Company or any
other Restricted Subsidiary in any way other than pursuant to
Standard Securitization Undertakings, or
(c) subjects any property or asset of the Company or
any other Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings;
(2) with which neither the Company nor any other Restricted
Subsidiary of the Company has any material contract, agreement,
arrangement or understanding (except in connection with a Qualified
Receivables Transaction) other than on terms no less favorable to the
Company or such other Restricted Subsidiary of the Company than those
that might be obtained at the time from persons that are not
Affiliates of the Company, other than fees payable in the ordinary
course of business in connection with servicing accounts receivable;
and
(3) to which neither the Company nor any Restricted Subsidiary
of the Company has any obligation to maintain or preserve such
entity's financial condition or cause such entity to achieve certain
levels of operating results.
Any designation of a Wholly Owned Subsidiary of the Company as a Receivables
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution of the Board of Directors of the Company
giving effect to such designation and an officers' certificate certifying that
the designation complied with preceding conditions and was permitted by this
Indenture.
<PAGE>
-23-
"Record Date" for interest payable on any Interest Payment Date
-----------
(except a date for payment of default interest) means the 15th of March and the
15th of September (whether or not a Business Day) as the case may be,
immediately preceding such Interest Payment Date.
"Redemption Date" when used with respect to any Note to be redeemed
---------------
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Note to be redeemed
----------------
means the price fixed for such redemption pursuant to this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances
------------------------
or extends any Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or its Restricted Subsidiaries pursuant to the terms of this
Indenture, but only to the extent that
(1) the Refinancing Indebtedness is subordinated to the Notes to
at least the same extent as the Indebtedness being refunded,
refinanced or extended, if at all;
(2) the Refinancing Indebtedness is scheduled to mature either
(a) no earlier than the Indebtedness being refunded,
refinanced or extended, or
(b) after the maturity date of the Notes;
(3) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Notes has
a Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the Weighted
Average Life to Maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or
prior to the maturity date of the Notes;
(4) such Refinancing Indebtedness is in an aggregate principal
amount that is equal to or less than the sum of
(a) the aggregate principal amount then outstanding under
the Indebtedness being refunded, refinanced or extended,
(b) the amount of accrued and unpaid interest, if any, and
premiums owed, if any, not in excess of preexisting prepayment
provisions on such Indebtedness being refunded, refinanced or
extended,
(c) the amount of customary fees, expenses and costs related
to the incurrence of such Refinancing Indebtedness; and
(5) such Refinancing Indebtedness is incurred by the same Person
(or its successor) that initially incurred the Indebtedness being
refunded, refinanced or extended.
<PAGE>
-24-
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement dated as of April 7, 2000 among the Company and the Initial
Purchasers.
"Regulated Restricted Subsidiary" means a Restricted Subsidiary that
-------------------------------
is regulated or certified by the Public Utility Commission of Texas or the New
Mexico Public Regulation Commission or any successor thereto or any analogous
regulatory body of any state of the United States or the District of Columbia.
"Regulation S" means Regulation S promulgated under the Securities
------------
Act.
"Restricted Payment" means any of the following:
------------------
(1) the declaration or payment of any dividend or any other
distribution or payment on Capital Stock of the Company or any
Restricted Subsidiary of the Company or any payment made to the direct
or indirect holders (in their capacities as such) of Capital Stock of
the Company or any Restricted Subsidiary of the Company (other than
(a) dividends or distributions payable solely in Capital Stock (other
than Disqualified Capital Stock) or in options, warrants or other
rights to purchase such Capital Stock (other than Disqualified Capital
Stock), and (b) in the case of Restricted Subsidiaries of the Company,
dividends or distributions payable to the Company or to a Restricted
Subsidiary of the Company);
(2) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company or any of its Restricted
Subsidiaries (other than Capital Stock owned by the Company or a
Wholly Owned Subsidiary of the Company, excluding Disqualified Capital
Stock) or any option, warrants or other rights to purchase such
Capital Stock;
(3) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement
for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of any Indebtedness which is
subordinated in right of payment to the Notes (other than subordinated
Indebtedness acquired in anticipation of satisfying a scheduled
sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of acquisition);
(4) the making of any Investment or guarantee of any Investment
in any Person other than a Permitted Investment;
(5) any designation of a Subsidiary as an Unrestricted
Subsidiary (valued at the fair market value of the net assets of such
Subsidiary on the date of such designation); and
(6) the forgiveness of any Indebtedness of an Affiliate of the
Company to the Company or a Restricted Subsidiary of the Company.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
-------------------
promulgated under the Securities Act; provided that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary as a Restricted Subsidiary if immediately
after giv-
<PAGE>
-25-
ing effect to such action (and treating any Acquired Indebtedness as having been
incurred at the time of such action),
(1) the Company could have incurred at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.10 of this Indenture; and
(2) no Default or Event of Default shall have occurred and be
continuing or result therefrom.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
---------
"Sale and Lease-Back Transaction" means any arrangement with any
-------------------------------
Person providing for the leasing by the Company or any Restricted Subsidiary of
the Company of any real or tangible personal property, which property has been
or is to be sold or transferred by the Company or such Restricted Subsidiary to
such Person in contemplation of such leasing.
"SEC" means the United States Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
"Senior Credit Facility" means the Credit Agreement dated as of April
----------------------
7, 2000, among ST Acquisition Corp., whose rights and obligations thereunder
will be assumed by the Company upon consummation of the Merger, the lenders
party thereto in their capacities as lenders thereunder, Canadian Imperial Bank
of Commerce, as administrative agent, and CIBC World Markets Corp. and Chase
Securities Inc., as co-arrangers and co-book managers, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder (provided that such increase in borrowings is
permitted by Section 4.10 of this Indenture ) or adding Restricted Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Senior Indebtedness" means the principal of and premium, if any, and
-------------------
interest on, and any and all other fees, expense reimbursement obligations and
other amounts due pursuant to the terms of all agreements, documents and
instruments providing for, creating, securing or evidencing or otherwise entered
into in connection with
(1) all Indebtedness of the Company owed to lenders under the
Senior Credit Facility;
(2) all obligations of the Company with respect to Hedging
Obligations;
(3) all obligations of the Company to reimburse any bank or
other Person in respect of amounts paid under letters of credit,
acceptances or other similar instruments;
<PAGE>
-26-
(4) all other Indebtedness of the Company which does not provide
that it is to rank equally with or subordinate to the Notes; and
(5) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the Senior
Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include
(1) Indebtedness of the Company to any of its Subsidiaries, or
to any Affiliate of the Company or any of such Affiliate's
Subsidiaries;
(2) Indebtedness represented by the Notes;
(3) any Indebtedness which by the express terms of the agreement
or instrument creating, evidencing or governing the same is junior or
subordinate in right of payment to any item of Senior Indebtedness;
(4) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business;
(5) Indebtedness incurred in violation of this Indenture;
(6) Indebtedness represented by Disqualified Capital Stock; and
(7) any Indebtedness to or guaranteed on behalf of, any
shareholder, director, officer or employee of the Company or any
Subsidiary of the Company.
"Standard Securitization Undertakings" means representations,
------------------------------------
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in an
accounts receivable securitization transaction.
"Subsidiary" of any specified Person means any corporation,
----------
partnership, limited liability company, joint venture, association or other
business entity, whether now existing or hereafter organized or acquired,
(1) in the case of a corporation, of which more than 50% of the
total voting power of the Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named
Person or any of its Subsidiaries; or
(2) in the case of a partnership, limited liability company,
joint venture, association or other business entity, with respect to
which such first-named Person or any of its Subsidiaries has the power
to direct or cause the direction of the management and policies of
such entity by contract or otherwise or if in accordance with GAAP
such entity is consolidated with the first-named Person for financial
statement purposes.
<PAGE>
-27-
"Texas Senate Bill 7" means Senate Bill 7 of the State of Texas signed
-------------------
in June 1999 by Texas Governor George W. Bush which implements competition in
Texas retail electric markets.
"TNMP" means Texas-New Mexico Power Company, a Texas corporation.
----
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
------------------- ---
(15 U.S. Code sections 77aaa-77bbbb) as in effect on the date of this Indenture
(except as provided in Section 8.03 hereof).
"Trust Officer" means, when used with respect to the Trustee, any
-------------
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Unrestricted Subsidiary" means
-----------------------
(1) any Subsidiary of an Unrestricted Subsidiary; and
(2) any Subsidiary of the Company which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by
the Board of Directors of the Company;
provided that a Subsidiary may be so classified as an Unrestricted Subsidiary
only if
(a) such classification is in compliance with Section 4.11
of this Indenture; and
(b) neither the Company nor any Restricted Subsidiary shall
at any time
(i) provide a guarantee of, or similar credit support
to, any Indebtedness of such Subsidiary (including any
undertaking, agreement or instrument evidencing such
Indebtedness),
(ii) be directly or indirectly liable for any
Indebtedness of such Subsidiary or
(iii) be directly or indirectly liable for any other
Indebtedness which provides that the holder thereof may
(upon notice, lapse of time or both) declare a default
thereon (or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other
Indebtedness that is Indebtedness of such Subsidiary
(including any corresponding right to take enforcement
action against such Subsidiary),
<PAGE>
-28-
except in the case of clause (i) or (ii) to the extent
(i) that the Company or such Restricted Subsidiary
could otherwise provide such a guarantee or incur such
Indebtedness (other than as Permitted Indebtedness) pursuant
to Section 4.10 under this Indenture and
(ii) the provision of such guarantee and the incurrence
of such Indebtedness otherwise would be permitted under
Section 4.11 of this Indenture.
The Trustee shall be provided with an Officers' Certificate stating
that such designation is permitted and setting forth the basis upon which the
calculations required by this definition were computed, together with a copy of
the Board Resolution adopted by the Board of Directors of the Company making
such designation.
"U.S. Government Obligations" means (a) securities that are direct
---------------------------
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing
(1) the then outstanding aggregate principal amount of such
Indebtedness into
(2) the sum of the total of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal,
including payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest one-
twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Subsidiary" means any Restricted Subsidiary, all of the
-----------------------
outstanding voting securities (other than directors' qualifying shares and, in
the case of TNMP, other than shares of preferred stock outstanding on the Issue
Date) of which are owned, directly or indirectly, by the Company.
<PAGE>
-29-
Section 1.02. Other Definitions.
------------------
The definitions of the following terms may be found in the sections
indicated as follows:
Term Defined in Section
---- ------------------
"Affiliate Transaction"............................. 4.14
"Agent Members"..................................... 2.15
"Authenticating Agent".............................. 2.02
"Bankruptcy Law".................................... 6.01
"Business Day"...................................... 13.07
"Change of Control Offer"........................... 4.16
"Change of Control Payment Date".................... 4.16
"Change of Control Purchase Price".................. 4.16
"Covenant Defeasance"............................... 9.03
"Custodian"......................................... 6.01
"Event of Default".................................. 6.01
"Excess Proceeds Offer"............................. 4.13
"Excess Proceeds Payment Date"...................... 4.13
"Funding Guarantor"................................. 10.03
"Global Notes"...................................... 2.01
"Guarantee Payment Blockage Period"................. 11.03
"Guarantor Representative".......................... 11.03
"Initial Blockage Period"........................... 12.03
"Initial Guarantee Blockage Period"................. 11.03
"Legal Defeasance".................................. 9.02
"Legal Holiday"..................................... 13.07
"Paying Agent"...................................... 2.03
"Payment Blockage Period"........................... 12.03
"Registrar"......................................... 2.03
"Regulation S Global Note".......................... 2.01
"Representative".................................... 12.03
"Resale Restriction Termination Date"............... 2.16
"Rule 144A Global Note"............................. 2.01
"Senior Preferred Stock"............................ 4.17
Section 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the portion
of such provision required to be incorporated herein in order for this Indenture
to be qualified under the TIA is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes.
--------------------
"indenture securityholder" means a Holder.
------------------------
"indenture to be qualified" means this Indenture.
-------------------------
<PAGE>
-30-
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor on the indenture securities" means the Company, the
-----------------------------------
Guarantors or any other obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by Commission rule
have the meanings therein assigned to them.
Section 1.04. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) words used herein implying any gender shall apply to every gender.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
---------------
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
---------
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
---------
required by law, stock exchange rule or Depository rule or usage. The form of
the Notes and any notation, legend or endorsement on them shall be satisfactory
to both the Company and the Trustee. Each Note shall be dated the date of its
issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
- ---------- -
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The Notes shall be issued initially in the form of two or more
permanent global Notes (the "Global Notes"). Notes offered and sold (i) in
------------
reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Notes in registered form, substantially in the form set forth
in Exhibit A (the " Rule 144A Global Note") and (ii) in offshore transactions in
--------- ---------------------
reliance on Regulation S shall be issued initially in the
<PAGE>
-31-
form of one or more permanent global Notes in registered form, substantially in
the form set forth in Exhibit A (the "Regulation S Global Note"), and in each
--------- ------------------------
case shall be deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of any Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.
Section 2.02. Execution and Authentication.
----------------------------
The Notes shall be executed on behalf of the Company by two Officers
of the Company or an Officer and the Secretary of the Company. Such signature
shall be manual. The Company's seal may be impressed, affixed, imprinted or
reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
signs the certificate of authentication on the Note. Such signature may be
either manual or facsimile. Such signature shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee or an authentication agent (the "Authenticating Agent")
--------------------
shall authenticate (i) Initial Notes for original issue on the date of this
Indenture in the aggregate principal amount not to exceed $275,000,000 and (ii)
Exchange Notes from time to time for issue only in exchange for a like principal
amount of Initial Notes, in each case upon written orders of the Company in the
form of an Officers' Certificate. The Officers' Certificate shall specify the
amount of Notes to be authenticated, the date on which the Notes are to be
authenticated and the aggregate principal amount of Notes outstanding on the
date of authentication, whether the Notes are to be Initial Notes or Exchange
Notes, and shall further specify the amount of such Notes to be issued as the
Global Note or Certificated Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in Section
2.07 hereof.
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters (as to which any of such Notes
may vote or consent) as one class and no series of Notes will have the right to
vote or consent as a separate class on any matter.
The Trustee may appoint an Authenticating Agent to authenticate Notes.
Any such appointment shall be evidenced by an instrument signed by a Trust
Officer, a copy of which shall be furnished to the Company. An Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
Authenticating Agent. An Authenticating Agent has the same right as an Agent to
deal with the Company and Affiliates of the Company.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof.
Section 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), an office
---------
or agency located in the Borough of Manhattan, The City of New York, State of
New York where Notes may be presented for payment ("Paying Agent") and an office
------------
or agency where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be
<PAGE>
-32-
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Registrar shall provide the Company a current copy of such
register from time to time upon request of the Company. The Company may have one
or more co-Registrars and one or more additional Paying Agents. Neither the
Company nor any Affiliate of the Company may act as Paying Agent. The Company
may change any Paying Agent, Registrar or co-Registrar without notice to any
Holder.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or agent for service of notices
and demands, or fails to give the foregoing notice, the Trustee shall act as
such. The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Notes.
Section 2.04. Paying Agent to Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, premium, if any, or interest on Notes (whether such assets have
been distributed to it by the Company or any other obligor on the Notes), and
shall notify the Trustee in writing of any Default in making any such payment.
The Company at any time may require a Paying Agent to distribute all assets held
by it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any Payment Default, upon written request to
a Paying Agent, require such Paying Agent to forthwith distribute to the Trustee
all assets so held in trust by such Paying Agent together with a complete
accounting of such sums. Upon distribution to the Trustee of all assets that
shall have been delivered by the Company to the Paying Agent, the Paying Agent
shall have no further liability for such assets.
Section 2.05. Noteholder Lists.
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee at least five Business Days before
each Interest Payment Date, and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders which list may be
conclusively relied on by the Trustee.
Section 2.06. Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations of the same series, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge in connection therewith payable by the transferor of
such Notes (other than any such transfer
<PAGE>
-33-
taxes or similar governmental charge payable upon exchanges or transfers
pursuant to Section 2.10, 3.06, 4.13, 4.16 or 9.06, in which event the Company
shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article 3, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
Section 2.07. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder
presents evidence to the satisfaction of the Company and the Trustee that the
Note has been lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement Note. An indemnity bond must be
delivered to the Company or the Trustee that is sufficient in the judgment of
the Company and the Trustee to protect the Company, the Trustee or any Agent
from any loss which any of them may suffer if a Note is replaced. In every case
of destruction, loss or theft, the applicant shall also furnish to the Company
and to the Trustee evidence to their satisfaction of the destruction, loss or
the theft of such Note and the ownership thereof. Each of the Company and the
Trustee may charge for its expenses in replacing a Note. In the event any such
mutilated, lost, destroyed or wrongfully taken Note has become due and payable,
the Company in their discretion may pay such Note instead of issuing a new Note
in replacement thereof. The provisions of this Section 2.07 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to replacement or payment of mutilated, lost, destroyed or wrongfully taken
Notes.
Every replacement Note is an additional obligation of the Company.
Section 2.08. Outstanding Notes.
-----------------
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those paid pursuant to Section 2.07 and those described in this
Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding until the Company
and the Trustee receive proof satisfactory to each of them that the replaced
Note is held by a protected purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Maturity Date, the Paying Agent holds
U.S. legal tender sufficient to pay all of the principal and interest due on the
Notes payable on that date and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Notes cease to be outstanding and interest on them ceases to accrue.
<PAGE>
-34-
Section 2.09. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. The Company shall notify the Trustee, in writing, when it or any
of its Affiliates repurchases or otherwise acquires Notes, of the aggregate
principal amount of such Notes so repurchased or otherwise acquired.
Section 2.10. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, dispose of Notes surrendered for registration of transfer, exchange,
payment or cancellation in accordance with its customary procedures. Subject to
Section 2.07, the Company may not issue new Notes to replace Notes that it has
paid or delivered to the Trustee for cancellation. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
Section 2.12. Defaulted Interest.
------------------
The Company shall pay interest on overdue principal (including post-
petition interest in a proceeding under Bankruptcy Law) at the rate of interest
then borne by the Notes. The Company shall, to the extent lawful, pay interest
on overdue installments of interest (without regard to any applicable grace
periods) at the rate of interest then borne by the Notes.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, as of a recent date selected by the Company, with a copy to the Trustee,
a notice that states the subsequent special record date, the payment date and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
<PAGE>
-35-
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(b) shall be paid to
Holders as of the Record Date for the Interest Payment Date for which interest
has not been paid.
Section 2.13. Deposit of Moneys.
-----------------
Prior to 10:00 a.m., New York City time, on each Interest Payment
Date, Redemption Date, Change of Control Payment Date, Excess Proceeds Payment
Date and Maturity Date, the Company shall have deposited with the Paying Agent
in immediately available funds U.S. legal tender sufficient to make payments, if
any, due on such Interest Payment Date, Redemption Date, Change of Control
Payment Date, Excess Proceeds Payment Date or Maturity Date, as the case may be,
in a timely manner which permits the Trustee to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Change of Control Payment Date,
Excess Proceeds Payment Date or Maturity Date, as the case may be. The
principal and interest on Global Notes shall be payable to the Depository or its
nominee, as the case may be, as the sole registered owner and the sole Holder of
the Global Notes represented thereby. The principal and interest on Notes in
certificated form shall be payable at the office of the Paying Agent.
Section 2.14. CUSIP Number.
------------
The Company in issuing the Notes may use one or more "CUSIP" numbers,
and if so, the Trustee shall use such CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
shall promptly notify the Trustee of any change in the CUSIP number.
Section 2.15. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.18.
Members of, or participants in, the Depository ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository or under the Global Note, and the Depository may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder.
(b) Interests of beneficial owners in the Global Notes may be
transferred or exchanged for Certificated Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.16. In addition,
Certificated Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depository (x) notifies
the Company that it is unwilling or unable to continue as Depository for any
Global Note or (y) has ceased to be a clearing company registered under the
Exchange Act and, in each case, a successor depositary is not appointed by the
Company within 90 days of such
<PAGE>
-36-
notice or (ii) a Default or an Event of Default has occurred and is continuing
and the Registrar has received a written request from the Depository to issue
Certificated Notes.
(c) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall, upon receipt of an authentication order from the Company
in the form of an Officers' Certificate, authenticate and deliver, to each
beneficial owner identified by the Depository in writing in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount of
Certificated Notes of authorized denominations.
(d) Any Certificated Note constituting a Restricted Security delivered
in exchange for an interest in a Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by Section 2.16, bear the Private Placement
Legend.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 2.16. Registration of Transfers and Exchanges.
---------------------------------------
(a) Transfer and Exchange of Certificated Notes. When Certificated
-------------------------------------------
Notes are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Certificated Notes; or
(ii) to exchange such Certificated Notes for an equal principal amount
of Certificated Notes of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the
Certificated Notes presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Certificated Notes the offer and sale of which
have not been registered under the Securities Act and are presented for
transfer or exchange prior to (x) the date which is two years after the
later of the date of original issue and the last date on which the Company
or any Affiliate of the Company was the owner of such Note, or any
predecessor thereto and (y) such later date, if any, as may be required by
any subsequent change in applicable law (the "Resale Restriction
------------------
Termination Date"), such Certificated Notes shall be accompanied, in the
----------------
sole discretion of the Company, by the following additional information and
documents, as applicable:
(A) if such Certificated Note is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification to that effect
(substantially in the form of Exhibit C hereto); or
---------
<PAGE>
-37-
(B) if such Certificated Note is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A, a certification to
that effect (substantially in the form of Exhibit C hereto); or
---------
(C) if such Certificated Note is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit C hereto) and a transferor
---------
certificate for Regulation S transfers substantially in the form of
Exhibit E hereto; or
---------
(D) if such Certificated Note is being transferred to an
Institutional Accredited Investor, delivery of certification to that
effect (substantially in the form of Exhibit C hereto), certificates
---------
of the transferee in substantially the form of Exhibit D and, at the
---------
option of the Company, an Opinion of Counsel reasonably satisfactory
to the Company to the effect that such transfer is in compliance with
the Securities Act; or
(E) if such Certificated Note is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to that
effect substantially in the form of Exhibit C hereto and, at the
---------
option of the Company, an Opinion of Counsel reasonably satisfactory
to the Company to the effect that such transfer is in compliance with
the Securities Act; or
(F) if such Certificated Note is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act, a certification to that effect (substantially in the form of
Exhibit C hereto) and, at the option of the Company, an Opinion of
---------
Counsel reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Certificated Note for a Beneficial
----------------------------------------------------------------
Interest in a Global Note. A Certificated Note may not be exchanged for a
- -------------------------
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Certificated Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) in the case of Certificated Notes, the offer and sale of which
have not been registered under the Securities Act and which are presented
for transfer prior to the Resale Restriction Termination Date,
certification, substantially in the form of Exhibit C hereto, that such
---------
Certificated Note is being transferred (I) to a Qualified Institutional
Buyer, (II) and Institutional Accredited Investor (and, in the case of this
clause (II), the Company shall have received a transferee letter of
representation substantially in the form of Exhibit A hereto and, at the
---------
option of the Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transaction is in compliance with the
Securities Act) or (III) in an offshore transaction in reliance on
Regulation S (and, in the case of this clause III, the Company shall have
received a transferor certificate for Regulation S transfers substantially
in the form of Exhibit E hereto and, at the option of the Company, an
---------
Opinion of Counsel reasonably satisfactory to the Company to the effect
that such transaction is in compliance with the Securities Act); and
(B) written instructions from the Holder thereof directing the
Registrar or co-Registrar to make, or to direct the Depository to make, an
endorsement on the applicable Global Note to reflect an increase in the
aggregate amount of the Notes represented by the Global Note,
<PAGE>
-38-
then the Registrar or co-Registrar shall cancel such Certificated Note and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Notes represented by the applicable Global
Note to be increased accordingly. If no Global Note representing Notes held by
Qualified Institutional Buyers or Persons acquiring Notes in offshore
transactions in reliance on Regulation S, as the case may be, is then
outstanding, the Company shall issue and the Trustee shall, upon receipt of an
authentication order in the form of an Officers' Certificate in accordance with
Section 2.02, authenticate such a Global Note in the appropriate principal
amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
-------------------------------------
of Global Notes or beneficial interests therein shall be effected through the
Depository in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor. Upon
receipt by the Registrar or co-Registrar of written instructions, or such other
instruction as is customary for the Depository, from the Depository or its
nominee, requesting the registration of transfer of an interest in a U.S. Global
Note or Regulation S Global Note, as the case may be, to another type of Global
Note, together with the applicable Global Notes (or, if the applicable type of
Global Note required to represent the interest as requested to be transferred is
not then outstanding, only the Global Note representing the interest being
transferred), the Registrar or Co-Registrar shall cancel such Global Notes (or
Global Note) and the Company shall issue and the Trustee shall, upon receipt of
an authentication order in the form of an Officers' Certificate in accordance
with Section 2.02, authenticate new Global Notes of the types so cancelled (or
the type so cancelled and applicable type required to represent the interest as
requested to be transferred) reflecting the applicable increase and decrease of
the principal amount of Notes represented by such types of Global Notes, giving
effect to such transfer. If the applicable type of Global Note required to
represent the interest as requested to be transferred is not outstanding at the
time of such request, the Company shall issue and the Trustee shall, upon
written instructions from the Company in accordance with Section 2.02,
authenticate a new Global Note of such type in principal amount equal to the
principal amount of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Note for a
--------------------------------------------------------
Certificated Note. (i) Any Person having a beneficial interest in a Global Note
- -----------------
may upon request exchange such beneficial interest for a Certificated Note.
Upon receipt by the Registrar or co-Registrar of written instructions, or such
other form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial interest
in a Global Note and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest containing
registration instructions and, in the case of any such transfer or exchange of a
beneficial interest in Notes the offer and sale of which have not been
registered under the Securities Act and which Notes are presented for transfer
or exchange prior to the Resale Restriction Termination Date, the following
additional information and documents:
(A) if such beneficial interest is being transferred to the Person
designated by the Depository as being the beneficial owner, a certification
from such Person to that effect (substantially in the form of Exhibit C
---------
hereto); or
(B) if such beneficial interest is being transferred to a Qualified
Institutional Buyer in accordance with Rule l44A, a certification to that
effect (substantially in the form of Exhibit C hereto); or
---------
(C) if such beneficial interest is being transferred in reliance on
Regulation S, delivery of a certification to that effect (substantially in
the form of Exhibit C hereto) and a transferor certificate for Regulation S
---------
transfers substantially in the form of Exhibit E hereto; or
---------
<PAGE>
-39-
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of certification (substantially
in the form of Exhibit C hereto), a certificate of the transferee in
---------
substantially the form of Exhibit D and, at the option of the Company, an
---------
Opinion of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit C hereto); or
---------
(F) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the Securities Act,
a certification to that effect (substantially in the form of Exhibit C
---------
hereto) and, at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the aggregate principal amount of the applicable Global Note to be
reduced and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver to the
transferee a Certificated Note in the appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial interest
in a Global Note pursuant to this Section 2.16(d) shall be registered in such
names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar or co-Registrar in writing. The Registrar or co-
Registrar shall deliver such Certificated Notes to the Persons in whose names
such Certificated Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
-----------------------------------------------------
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless, and the Trustee is hereby authorized
to deliver Notes without the Private Placement Legend if, (i) the Trustee
receives notice (in the form of an Officers' Certificate or an Opinion of
Counsel) that the Resale Restriction Termination Date shall have occurred, (ii)
there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory
to the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act or (iii) such Note has been sold
pursuant to an effective registration statement under the Securities Act.
(g) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
<PAGE>
-40-
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial owners of interest in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
Section 2.17. Restrictive Legends.
-------------------
Each Global Note and Certificated Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
------------------------
face thereof until April 7, 2002, unless otherwise agreed to by the Company and
the Holder thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF
------------------------------------
THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH THE COMPANY,
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE), RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH 501(a)(1), (2), (3), or (7)
UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE FOR THIS NOTE), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) WILL GIVE TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFER IS
BEING MADE PURSUANT TO CLAUSE (C) OR (E) ABOVE, PRIOR TO SUCH TRANSFER, THE
HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT
<PAGE>
-41-
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note shall also bear the following legend:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to paragraph 6 of the
Notes, at least 60 days prior to the Redemption Date or during such other period
as the Trustee may agree to, the Company shall notify the Trustee in writing of
the Redemption Date, the principal amount of Notes to be redeemed and the
Redemption Price, and deliver to the Trustee an Officers' Certificate stating
that such redemption will comply with the conditions contained herein and in the
Notes, as appropriate.
Section 3.02. Selection of Notes to Be Redeemed.
---------------------------------
In the event that less than all of the Notes are to be redeemed at any
time, selection of the Notes to be redeemed shall be made by the Trustee in
compliance with the requirements of the principal securities exchange, if any,
on which such Notes are listed or, if such Notes are not then listed on a
national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no Notes of
a principal amount of $1,000 or less shall be redeemed in part; provided,
further, that if a partial redemption is made with the proceeds of any Public
Equity Offering, selection of the Notes or portions thereof for redemption shall
be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis
as is practicable (subject to the procedures of the Depository), unless such
method is otherwise prohibited. A
<PAGE>
-42-
new Note in a principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon delivery of the original Note to
the Paying Agent and cancellation of the original Note. On and after the
Redemption Date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Company has deposited with the Paying
Agents in U.S. legal tender in satisfaction of the applicable Redemption Price
pursuant to this Indenture.
Section 3.03. Notice of Redemption.
--------------------
Notice of redemption shall be mailed by first class mail at least 30
but not more than 60 calendar days before the Redemption Date to each Holder to
be redeemed at its registered address. If any Note is to be redeemed in part
only, the notice of redemption that relates to such Note shall state the portion
of the principal amount thereof to be redeemed.
The notice shall identify the Notes to be redeemed (including the
CUSIP number(s) thereof) and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued;
(4) the name, address and telephone number of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent at the address specified to collect the Redemption Price plus accrued
interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(7) the subparagraph of the Notes pursuant to which the Notes called
for redemption are being redeemed; and
(8) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption.
Section 3.04. Effect of Notice of Redemption.
------------------------------
Once the notice of redemption described in Section 3.03 is mailed,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price, including any premium, plus accrued interest to the
Redemption Date, if any. Upon surrender to the Paying Agent, such Notes shall
be paid at the Redemption Price, including any premium, plus accrued interest to
the Redemption Date, if any; pro-
<PAGE>
-43-
vided that if the Redemption Date is after a
Record Date and on or prior to the Interest Payment Date, the accrued interest
shall be payable to the Holder of the redeemed Notes registered on the relevant
Record Date.
Section 3.05. Deposit of Redemption Price.
---------------------------
On or prior to 10:00 a.m., New York City time, on each Redemption
Date, the Company shall have deposited with the Paying Agent in immediately
available funds U.S. legal tender sufficient to pay the Redemption Price of and
accrued interest on all Notes to be redeemed on that date.
On and after any Redemption Date, if U.S. legal tender sufficient to
pay the Redemption Price of and accrued interest on Notes called for redemption
shall have been made available in accordance with the preceding paragraph, the
Notes called for redemption will cease to accrue interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price of
and, subject to the first proviso in Section 3.04, accrued and unpaid interest
on such Notes to the Redemption Date. If any Note called for redemption shall
not be so paid, interest will continue to accrue and be paid, from the
Redemption Date until such redemption payment is made, on the unpaid principal
of the Note and any interest not paid on such unpaid principal, in each case, at
the rate and in the manner provided for in Section 2.12.
Section 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
----------------
The Company shall pay the principal of and interest (including all
Additional Interest as provided in the Registration Rights Agreement) on the
Notes on the dates and in the manner provided in the Notes and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds, for the benefit of the Holders, on
that date U.S. legal tender designated for and sufficient to pay such
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal and interest on
overdue interest, to the extent lawful as provided for in Section 2.12.
Section 4.02. Provision of Financial Statements and Other Information.
-------------------------------------------------------
(A) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company will furnish to the Holders, within 15 days of the time
periods specified in the SEC rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such Forms, in-
<PAGE>
-44-
cluding a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified
independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraph will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(B) In addition, whether or not required by the SEC, the Company will
file a copy of all of the information and reports referred to in clauses (A)(1)
and (A)(2) above with the SEC for public availability within 15 day of the time
periods specified in the SEC's rules and regulations (unless the SEC will not
accept such a filing) and make such information available to prospective
investors upon request. The Company will also furnish to Holders and
prospective investors upon request the information required to be delivered
pursuant to Rule 144 and Rule 144A(B)(4) under the Securities Act. The Company
shall also comply with the provisions of TIA Section 314(a).
Section 4.03. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead (as a defense or otherwise) or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company from paying all or any portion of the principal of, premium, if any,
and/or interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that they may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 4.04. Compliance Certificate; Notice of Default; Tax Information.
----------------------------------------------------------
(a) The Company shall deliver to the Trustee, within 90 days after the
end of the Company's fiscal year and within 45 days after the end of each the
first, second and third fiscal quarters in each fiscal year an Officers'
Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company) stating that a review of the activities of the Company and its
Subsidiaries during such fiscal year or fiscal quarter, as the case may be, has
been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture (without regard to notice requirements and
periods of grace), and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and, in the case of Restricted Payments, listing all Restricted
Payments for such fiscal year or fiscal quarter, as the case may be, and is not
in default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all or such De-
<PAGE>
-45-
faults or Events of Default of which he or she may have knowledge and what
action each is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Notes are prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto. The Officers' Certificate shall also notify the Trustee should the
Company elect to change the manner in which it fixes its fiscal year end.
(b) The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
(c) The annual financial statements delivered pursuant to Section 4.02
shall be accompanied by a written report addressed to the Trustee of the
Company's independent accountants (who shall be a firm of established national
reputation) that in conducting their audit of such financial statements nothing
has come to their attention that would lead them to believe that a Default or
Event of Default has occurred under this Indenture insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(d) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed default under this Indenture of the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 13.02 hereof,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
Default or Event of Default, notice or other action, the status thereof and what
action the Company is taking or proposes to take within five Business Days of
its becoming aware of such occurrence.
(e) The Company shall calculate and deliver to the Trustee all
original issue discount information to be reported by the Trustee to Holders as
required by applicable law.
(f) Delivery of such reports, information and documents to the
Trustee, except in the case of clauses (b) and (d) of this Section 4.04, 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 4.05. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
Properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the Property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
<PAGE>
-46-
Section 4.06. Corporate Existence.
-------------------
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or limited liability company
or other existence of each Subsidiary, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
Subsidiary and the material rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries except where the failure to
preserve and keep in full force and effect any such rights, licenses and
franchise shall not have a material adverse effect on the financial condition,
business, operations or prospects of the Company and its Subsidiaries taken as a
whole; and provided that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, limited liability company,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders.
Section 4.07. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York where Notes may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee as set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company shall give prompt written notice to the Trustee of such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee set forth in Section 13.02 as such office of the Company.
Section 4.08. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not in the aggregate have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries taken as a whole.
Section 4.09. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall cause all material Properties owned by or leased
by it or any of its Subsidiaries used or useful to the conduct of the Company's
business or the business of any of its Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equip-
<PAGE>
-47-
ment and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in its judgment may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 4.09 shall prevent the Company or any of its Subsidiaries from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors of the Company or of the Board of Directors of any
Subsidiary of the Company concerned, or of an officer (or other agent employed
by the Company or of any of its Subsidiaries) of the Company or any of its
Subsidiaries having managerial responsibility for any such Property, desirable
in the conduct of the business of the Company or any Subsidiary of the Company,
and if such discontinuance or disposal is not adverse in any material respect to
the Holders.
(b) The Company shall maintain, and shall cause its respective
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance.
Section 4.10. Limitation on Additional Indebtedness.
-------------------------------------
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries (other than any Regulated Restricted Subsidiary) to, directly or
indirectly, incur (as defined) any Indebtedness (including Acquired
Indebtedness); provided that, if no Default or Event of Default has occurred and
is continuing at the time or as a consequence of the incurrence of such
Indebtedness, the Company or any of its Restricted Subsidiaries may incur
Indebtedness (including Acquired Indebtedness) if after giving effect to the
incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Company's Consolidated Fixed Charge Coverage Ratio is at least 2.0
to 1 if the Indebtedness is incurred on or prior to December 31, 2001 and 2.25
to 1 if the Indebtedness is incurred thereafter.
(B) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness; provided that the Company may not
incur any Permitted Indebtedness that ranks junior in right of payment to the
Notes that has a maturity or mandatory sinking fund payment prior to the
maturity of the Notes.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness which the Company and any Restricted Subsidiary are
permitted to issue, the Company and such Restricted Subsidiary, as the case may
be, will have the right, in the Company's sole discretion, to classify such item
of Indebtedness at the time of its issuance and from time to time thereafter and
will only be required to include the amount and type of such Indebtedness under
the clause permitting the Indebtedness as so classified.
Section 4.11. Limitation on Restricted Payments.
---------------------------------
(A) The Company shall not make, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(1) no Default or Event of Default has occurred and is continuing
at the time of or immediately after giving effect to such Restricted
Payment;
<PAGE>
-48-
(2) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.10 of this
Indenture; and
(3) after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments made after the Issue Date does
not exceed the sum of
(a) 50% of the Company's Cumulative Consolidated Net Income
(or minus 100% of any cumulative deficit in Consolidated Net
Income during such period),
(b) 100% of the aggregate Net Proceeds received by the
Company from the issue or sale after the Issue Date of Capital
Stock (other than any Disqualified Capital Stock or Capital Stock
of the Company issued to any Subsidiary of the Company) of the
Company or any Indebtedness or other securities of the Company
convertible into or exercisable or exchangeable for Capital Stock
(other than Disqualified Capital Stock) of the Company which have
been so converted, exercised or exchanged, as the case may be,
(c) without duplication of any amounts included in clause
(3)(b) above, 100% of the aggregate Net Proceeds received by the
Company from any equity contribution from a holder of the
Company's Capital Stock, excluding any Net Proceeds from a Public
Equity Offering to the extent used to redeem the Notes, and
(d) without duplication, the sum of
(i) the aggregate amount returned in cash on or with
respect to an Investment (other than a Permitted Investment) in any
Person made subsequent to the Issue Date whether through interest
payments, principal payments, dividends or other distributions; and
(ii) the net cash proceeds received by the Company or
any of its Restricted Subsidiaries from the disposition (other than to
the Company or a Subsidiary of the Company), retirement or redemption of
all or any portion of an Investment described in clause (3)(d)(i);
provided, however, that, with respect to an Investment in any Person,
the sum of clauses (i), and (ii) above with respect to the Investment in
such Person shall not exceed the aggregate amount of all Investments
made in such Person subsequent to the Issue Date; and;
(e) $5.0 million.
For purposes of determining under clause (3) above, the amount
expended for Restricted Payments, cash distributed shall be valued at the face
amount thereof and Property other than cash shall be valued at its fair market
value.
(B) The provisions of this Section 4.11 shall not prohibit
<PAGE>
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(1) the payment of any distribution within 60 days after the
date of declaration thereof, if at such date of declaration such
payment would comply with the provisions of this Indenture;
(2) the repurchase, redemption or other acquisition or
retirement of any shares of Capital Stock of the Company or
Indebtedness subordinate in right of payment to the Notes by
conversion into, or by or in exchange for, shares of Capital Stock of
the Company (other than Disqualified Capital Stock), or out of the Net
Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Capital Stock of the
Company (other than Disqualified Capital Stock);
(3) the redemption or retirement of Indebtedness of the Company
subordinate in right of payment to the Notes in exchange for, by
conversion into, or out of the Net Proceeds of a substantially
concurrent sale or incurrence of, Indebtedness of the Company (other
than any Indebtedness owed to a Subsidiary) that is Refinancing
Indebtedness;
(4) distributions to SW Acquisition, L.P. by the Company for the
purpose of (a) enabling the partners of SW Acquisition, L.P. to pay
their tax liabilities and (b) enabling SW Acquisition, L.P. to pay
management, consulting and financial advisory fees and reimburse
expenses in an amount in the case of this clause (b) not to exceed
$2.0 million in the aggregate in any fiscal year;
(5) the repurchase, redemption or other acquisition or
retirement of any shares of Disqualified Capital Stock out of the Net
Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Disqualified Capital
Stock; provided, however, that the amounts of the redemption
obligations of the Disqualified Capital Stock being issued shall not
exceed the amounts of the redemption obligations of, and such
Disqualified Capital Stock shall have redemption obligations no
earlier than those required by, the Disqualified Capital Stock being
refinanced;
(6) the repurchase, redemption, retirement or acquisition of
Capital Stock of the Company from employees or directors of the
Company upon such employees' or directors' death, retirement or
termination of employment or otherwise in accordance with any
employment agreement, employee or director stock option plan or
agreement or employee or director equity subscription agreement, in an
aggregate amount not to exceed $2.0 million in any calendar year, plus
the aggregate cash proceeds received by the Company during such
calendar year from any issuance of such Capital Stock to employees or
directors of the Company, plus the portion of such $2.0 million which
remains unused at the end of the prior calendar year, but in no event
to exceed $3.0 million in any calendar year; provided, that the
cancellation of Indebtedness owing to the Company from employees or
directors in connection with a repurchase of Capital Stock of the
Company will not be deemed to constitute a Restricted Payment; and
(7) investments constituting Restricted Payments made as a
result of the receipt of non-cash consideration from any Asset Sale.
<PAGE>
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In calculating the aggregate amount of Restricted Payments made
subsequent to the Issue Date for purposes of clause (A)(3) above, amounts
expended pursuant to clauses (1), (2) and (6) of the immediately preceding
paragraph shall be included in such calculation.
(C) Not later than the date of making any Restricted Payment, the
Company will deliver to the Trustee an officers' certificate stating that
(1) such Restricted Payment is permitted and setting forth the
basis upon which the calculations required by the covenant described
above were computed, which calculations may be based upon the
Company's latest available financial statements, and
(2) no Default or Event of Default has occurred and is
continuing and no Default or Event of Default will occur immediately
after giving effect to any such Restricted Payment.
Section 4.12. Limitation on Other Senior Subordinated Indebtedness.
-----------------------------------------------------
The Company shall not, directly or indirectly, incur, contingently or
otherwise, any Indebtedness (other than the Notes) that is both
(1) subordinate in right of payment to any Senior Indebtedness
of the Company, and
(2) senior in right of payment to the Notes.
For purposes of this Section 4.12, Indebtedness is deemed to be senior in right
of payment to the Notes if it is not explicitly subordinated in right of payment
to Senior Indebtedness of the Company at least to the same extent as the Notes
are subordinated to such Senior Indebtedness.
Section 4.13. Limitation on Asset Sales.
-------------------------
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries (other than any Regulated Restricted Subsidiary) to, consummate an
Asset Sale (excluding any sale of interests in an Unrestricted Subsidiary)
unless
(1) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such sale or other
disposition at least equal to the fair market value of the assets sold
or otherwise disposed of; and
(2) not less than 75% of the consideration received by the
Company or such Restricted Subsidiary, as the case may be, is in the
form of cash and Cash Equivalents other than in the case where the
Company is undertaking a Permitted Asset Swap; provided that the
following shall be deemed to be cash for purposes of this clause (2):
(a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet), of the
Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinate
in right of payment to the Notes) that are assumed by the
transferee of any such assets
<PAGE>
-51-
pursuant to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such
transferee that are contemporaneously (subject to ordinary
settlement periods) converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that
conversion).
(B) The Asset Sale Proceeds received by the Company or any Restricted
Subsidiary may be applied to one or more of the following purposes in such
combination as the Company or the applicable Restricted Subsidiary shall elect:
(1) to the extent the Company or any such Restricted Subsidiary,
as the case may be, elects, or is required, to prepay, repay or
purchase Indebtedness under any then existing Senior Indebtedness of
the Company or any such Restricted Subsidiary within 270 days
following the receipt of the Asset Sale Proceeds from any Asset Sale;
provided that any such repayment shall result in a permanent reduction
of the commitments thereunder in an amount equal to the principal
amount so repaid; an d
(2) (i) to an Investment in Property or other assets (including
Capital Stock or other securities purchased in connection with the
acquisition of Capital Stock or Property of another Person) or (ii) to
the cash collateralization of letters of credit or bankers acceptances
designed to facilitate the purchase of property and services; provided
that any cash collateral released to the Company or such Restricted
Subsidiary upon the expiration of such letters of credit, bankers
acceptances or other instruments or arrangements shall be deemed Asset
Sale Proceeds received on the date of such release; provided, however,
that in the case of clauses (i) and (ii) above, such applications of
Asset Sale Proceeds must be made in compliance with Section 4.18 below
within 270 days following the receipt of such Asset Sale Proceeds; and
(3) to the reimbursement of the Company or any such Restricted
Subsidiary within 270 days following the receipt of insurance proceeds
for expenditures made, and costs incurred, to repair, rebuild, replace
or restore property subject to loss, damage or taking to the extent
that the Asset Sale Proceeds consist of insurance proceeds received on
account of such loss, damage or taking.
The aggregate Asset Sale Proceeds from any Asset Sale made by the
Company or any of its Restricted Subsidiaries (other than any such Asset Sale
Proceeds received by any Regulated Restricted Subsidiary that are not paid as a
dividend to the Company) that have not been applied in accordance with the
preceding paragraph, and that have not yet been the basis for an Excess Proceeds
Offer in accordance with the following paragraph, are referred to herein as
"Available Asset Sale Proceeds."
If the Available Asset Sale Proceeds exceed $10.0 million, the Company
or such Restricted Subsidiary, as the case may be, must apply an amount equal to
the Available Asset Sale Proceeds to an offer to repurchase the Notes, at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the purchase date (an "Excess Proceeds
Offer").
(C) If the Company is required to make an Excess Proceeds Offer, the
Company shall mail, within 30 days following the date specified in clause (B)(2)
above, a notice to the Holders. Such notice
<PAGE>
-52-
shall be sent by first-class mail, postage prepaid, to the Trustee and to each
Holder, at the address appearing in the register maintained by the Registrar of
the Notes, and shall state:
(1) that the Excess Proceeds Offer is being made by the Company
or such Restricted Subsidiary pursuant to this Section 4.13;
(2) that such Holders have the right to require the Company or
such Restricted Subsidiary to apply the Available Asset Sale Proceeds
to repurchase such Notes at a purchase price in cash equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any,
to the purchase date which shall be no earlier than 30 days and not
later than 60 days from the date such notice is mailed (the "Excess
------
Proceeds Payment Date");
---------------------
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that any Notes accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest after the Excess
Proceeds Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to an Excess Proceeds Offer will be required to
surrender the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day preceding the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their acceptance
of the Excess Proceeds Offer if the Paying Agent receives, not later
than the close of business on the third Business Day preceding the
Excess Proceeds Payment Date, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(7) that if the aggregate principal amount of Notes surrendered
by Holders exceeds the amount of Excess Proceeds, Company shall select
the Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or integral multiples thereof, shall be
purchased);
(8) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, provided that each Note purchased
and each such new Note issued shall be in an original principal amount
in denominations of $1,000 and integral multiples thereof;
(9) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the purchase of such
Notes;
(10) any other procedures that a Holder must follow to accept an
Excess Proceeds Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent.
<PAGE>
-53-
On the Excess Proceeds Payment Date, the Company or such Restricted
Subsidiary shall, to the extent lawful, (1) accept for payment, on a pro rata
basis to the extent necessary, Notes or portions thereof tendered pursuant to
the Excess Proceeds Offer, (2) deposit with the Paying Agent U.S. legal tender
sufficient to pay the purchase price plus accrued and unpaid interest, if any,
on the Notes to be purchased or portions thereof, (3) deliver or cause to be
delivered to the Trustee Notes so accepted together with an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.13. The
Paying Agent shall promptly mail to each Holder so accepted payment in an amount
equal to the purchase price for such Notes, and the Company shall execute and
issue, and the Trustee shall promptly authenticate and make available for
delivery to such Holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof. The Company shall publicly announce the results of the
Excess Proceeds Offer on the Excess Proceeds Payment Date.
If an Excess Proceeds Offer is not fully subscribed, the Company or
such Restricted Subsidiary may retain the portion of the Available Asset
Proceeds not required to repurchase Notes.
(D) In the event of the transfer of substantially all of the Property
and assets of the Company and its Restricted Subsidiaries as an entirety to a
Person in a transaction permitted under Section 5.01 of this Indenture, the
successor Person shall be deemed to have sold the Properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
Section 4.13, and shall comply with the provisions of this Section 4.13 with
respect to such deemed sale as if it were an Asset Sale.
(E) The Company and any such Restricted Subsidiary shall comply with
the requirements of Rule 14e-1 under the Exchange Act and other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes pursuant to an Excess
Proceeds Offer. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.13, the Company or such Restricted
Subsidiary shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.13 by
virtue thereof.
Section 4.14. Limitation on Transactions with Affiliates.
------------------------------------------
(A) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, Property or services) with or for the benefit of
any Affiliate (each an "Affiliate Transaction") or extend, renew, waive or
---------------------
otherwise modify the terms of any Affiliate Transaction entered into prior to
the Issue Date unless
(1) such Affiliate Transaction is between or among the Company
and one or more of its Wholly Owned Subsidiaries, or
(2) the terms of such Affiliate Transaction are at least as
favorable as the terms which could be obtained by the Company or such
Restricted Subsidiary, as the case may be, in a comparable transaction
made on an arm's-length basis between unaffiliated parties.
In any Affiliate Transaction (or any series of related Affiliate
Transactions which are similar or part of a common plan) involving an amount or
having a fair market value in excess of $2.0 million which is not permitted
under clause (1) above, the Company must obtain a board resolution of the Board
of Directors of the Company (and approved by at least a majority of the
disinterested director) certifying that such Affiliate
<PAGE>
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Transaction complies with clause (2) above. In any Affiliate Transaction (or any
series of related Affiliate Transactions which are similar or part of a common
plan) involving an amount or having a fair market value in excess of $5.0
million which is not permitted under clause (1) above, the Company must obtain a
favorable written opinion as to the fairness of such transaction or
transactions, as the case may be, from an Independent Financial Advisor.
(B) The foregoing provisions shall not apply to
(1) any Restricted Payment that is not prohibited by the
provisions described under Section 4.11 of this Indenture;
(2) fees and compensation paid to, and indemnity provided on
behalf of, and employee benefit arrangement for, officers, directors
or employees of the Company or any Restricted Subsidiary of the
Company, as determined in good faith by the Company's Board of
Directors or senior management;
(3) any transactions with and any reasonable fees paid to Laurel
Hill Capital Partners LLC and its Affiliates and CIBC World Markets
Corp. and its Affiliates relating to advisory, banking and investment
banking services provided to the Company or any Restricted Subsidiary
of the Company, subject to approval by the Company's Board of
Directors;
(4) distributions to SW Acquisition, L.P. by the Company for the
purpose of (a) enabling the partners of SW Acquisition, L.P. to pay
their tax liabilities and (b) enabling SW Acquisition, L.P. to pay
management, consulting and financial advisory fees and reimburse
expenses in an amount in the case of this clause (b) not to exceed
$2.0 million in the aggregate in any fiscal year;
(5) loans or advances to employees of the Company or any
Restricted Subsidiary in the ordinary course of business, but in any
event not to exceed $2.0 million in the aggregate outstanding at any
time;
(6) any employment agreement entered into by the Company or any
of its Restricted Subsidiaries in the ordinary course of business
approved in good faith by the Company's Board of Directors; or
(7) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement
thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the
original agreement as in effect on the Issue Date.
Section 4.15. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries (other than any Regulated Restricted Subsidiary) to, create, incur
or otherwise cause or suffer to exist or become effective any Liens of any kind
(other than Permitted Liens) upon any Property or asset of the Company or any of
its Restricted Subsidiaries or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary of the Company
<PAGE>
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which owns Property or assets, now owned or hereafter acquired, without making,
or causing the Restricted Subsidiary to make, effective provision for securing
the Notes; and:
(1) if such Lien secures Indebtedness which is subordinate in
right of payment to the Notes, such Lien shall be subordinate to the
Lien granted to Holders to the same extent as such Indebtedness is
subordinate in right of payment to the Notes; and
(2) in all other cases, the Notes are equally and ratably
secured.
Section 4.16. Change of Control.
-----------------
(A) If a Change of Control occurs, the Company shall be obligated to
make an offer to purchase (the "Change of Control Offer") each Holder's
-----------------------
outstanding Notes at a purchase price (the "Change of Control Purchase Price")
--------------------------------
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the Change of Control Payment Date in accordance with the procedures
set forth below.
(B) Within 30 days of the occurrence of a Change of Control, the
Company shall send by first-class mail, postage prepaid, to the Trustee and to
each Holder, at the address appearing in the register maintained by the
Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.16 and that all Notes tendered will be accepted for
payment;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days nor later than
60 days from the date such notice is mailed (the "Change of Control
-----------------
Payment Date"));
------------
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(5) that Holders accepting the offer to have their Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes, with the form entitled "Option of the Holder to
Elect Purchase" on the reverse of the Note completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the Business Day preceding the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw their acceptance
if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment Date, a
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such
Notes purchased;
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered;
<PAGE>
-56-
(8) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall (1) accept
for payment Notes or portions thereof tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent U.S. legal tender sufficient to pay the
purchase price of all Notes or portions thereof so tendered and (3) deliver or
cause to be delivered to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each Holder so accepted
payment in an amount equal to the purchase price for such Notes, and the Company
shall execute and issue, and the Trustee shall promptly authenticate and mail to
such Holder, a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered; provided that each such new Note shall be issued in an
original principal amount in denominations of $1,000 and integral multiples
thereof.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth above applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(C) Prior to the mailing of the notice to Holders described in clause
(B) above, the Company covenants to
(1) repay in full all obligations and terminate all commitments
under or in respect of all Senior Indebtedness the terms of which
prohibit the purchase by the Company of the Notes upon a Change of
Control in compliance with the terms of this Section 4.16 or offer to
repay in full all obligations and terminate all commitments under or
in respect of all such Senior Indebtedness and repay the Senior
Indebtedness owed to each such lender who has accepted such offer; or
(2) obtain the requisite consents under all such Senior
Indebtedness to permit the repurchase of the Notes pursuant to this
Section 4.16.
The Company must first comply with the covenant described in the preceding
sentence before it will be required to purchase Notes in the event of a Change
of Control; provided that the Company's failure to comply with the covenant
described in the preceding sentence will constitute an Event of Default
described in clause (3) of Section 6.01 of this Indenture.
(D) (1) If the Company or any of its Restricted Subsidiaries has
outstanding Indebtedness that is subordinated in right of payment to the Notes
or Preferred Stock, and the Company or such Restricted Subsidiary is required to
make a change of control offer or to make a distribution with respect to such
subordinated Indebtedness or Preferred Stock in the event of a Change of
Control, the Company shall not consummate any such offer or distribution with
respect to such subordinated Indebtedness or Preferred Stock until such time as
the Company shall have paid the Change of Control Purchase Price in full to the
Holders that have accepted the Company's Change of Control Offer and shall
otherwise have consummated the Change of Control Offer made to Holders and (2)
the Company will not issue Indebtedness that is subordinated in right of payment
to the Notes or Preferred Stock with change of control provisions requiring the
payment of such Indebtedness or Pre-
<PAGE>
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ferred Stock prior to the payment of the Notes tendered pursuant to a Change of
Control Offer in the event of a Change in Control under this Indenture.
(E) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
Section 4.17. Limitation on Dividend and Other Payment Restrictions Affecting
---------------------------------------------------------------
Restricted Subsidiaries.
------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to
(1) pay dividends or make any other distributions to the Company
or any Restricted Subsidiary of the Company
(a) on its Capital Stock or
(b) with respect to any other interest or participation in,
or measured by, its profits;
(2) repay any Indebtedness or any other obligation owed to the
Company or any Restricted Subsidiary of the Company;
(3) make loans or advances or capital contributions to the
Company or any of its Restricted Subsidiaries; or
(4) transfer any of its Properties or assets to the Company or
any of its Restricted Subsidiaries;
except for such encumbrances or restrictions existing under or by reason of
(1) encumbrances or restrictions existing or entered into on
the Issue Date to the extent and in the manner such encumbrances and
restrictions are in effect on the Issue Date, including, without
limitation, the stipulation agreements entered into with the hearings
held by the New Mexico Public Regulation Commission and the Public
Utility Commission of Texas, the restrictions to be included in the
amended and restated articles of incorporation of TNP Enterprises,
Inc. and Texas-New Mexico Power Company that will become effective on
the date of the closing of the Merger, and any amendments, extensions
or renewals thereof that are no more restrictive in any material
respect with regard to the interests of the Holders of Notes than the
restrictions and encumbrances in effect on the Issue Date;
(2) any instrument governing Indebtedness of Regulated
Restricted Subsidiaries; provided that such restrictions or
encumbrances are no more restrictive in the aggregate than
<PAGE>
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those contained in the instruments governing Indebtedness of Regulated
Restricted Subsidiaries on the Issue Date;
(3) any instrument governing Indebtedness of any Restricted
Subsidiary that was a Regulated Restricted Subsidiary at any time
after such Restricted Subsidiary ceases to be a Regulated Restricted
Subsidiary, to the extent and in the manner such encumbrances and
restrictions are in effect on the date such Restricted Subsidiary
ceases to be a Regulated Restricted Subsidiary; provided that such
encumbrances and restrictions (together with encumbrances and
restrictions that apply to all Regulated Restricted Subsidiaries and
Restricted Subsidiaries that were Regulated Restricted Subsidiaries)
are no more restrictive in the aggregate than those contained in the
instruments governing Indebtedness of Regulated Restricted
Subsidiaries on the Issue Date;
(4) financial maintenance covenants;
(5) this Indenture and the Notes;
(6) applicable law or regulation;
(7) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
Property or assets of any Person, other than the Person, or the
Property or assets of the Person (including any Subsidiary of the
Person), so acquired;
(8) customary net worth or non-assignment provisions in leases
or other agreements entered in the ordinary course of business and
consistent with past practices;
(9) Refinancing Indebtedness; provided that such restrictions,
including restricted payment baskets, are no more restrictive than
those contained in the agreements governing the Indebtedness being
refunded, refinanced or extended;
(10) customary restrictions in security agreements or mortgages
securing Indebtedness of the Company or a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the Property subject
to such security agreements and mortgages;
(11) customary restrictions with respect to a Restricted
Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary;
(12) the Senior Redeemable Preferred Stock issued on the Issue
Date (the "Senior Preferred Stock"); or
(13) any Preferred Stock that refinances the Senior Preferred
Stock; provided that such restrictions, including restricted payment
baskets, are no more restrictive than those that apply to the Senior
Preferred Stock.
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Section 4.18. Limitation on Conduct of Business.
---------------------------------
The Company and its Restricted Subsidiaries shall not engage in any
businesses which are not the same, similar, ancillary or related to the
businesses in which the Company and its Restricted Subsidiaries are engaged in
on the Issue Date. No Regulated Restricted Subsidiary will own any capital
stock of any Restricted Subsidiary that is not a Regulated Restricted
Subsidiary.
Section 4.19. Limitation on Preferred Stock of Restricted Subsidiaries.
--------------------------------------------------------
The Company shall not permit any of its Restricted Subsidiaries (other
than any Regulated Restricted Subsidiary) to issue any Preferred Stock (except
Preferred Stock issued to the Company or a Wholly Owned Subsidiary of the
Company) or permit any Person (other than the Company or a Wholly Owned
Subsidiary of the Company) to hold any such Preferred Stock unless such
Restricted Subsidiary would be entitled to incur or assume Indebtedness under
Section 4.10 (other than Permitted Indebtedness) in the aggregate principal
amount equal to the aggregate liquidation value as of the date of issuance
thereof of the Preferred Stock to be issued.
Section 4.20. Limitation on Capital Stock of Restricted Subsidiaries
------------------------------------------------------
The Company shall not
(1) sell, pledge, hypothecate or otherwise convey or dispose of
any Capital Stock of a Restricted Subsidiary of the Company (other
than any such transaction resulting in a Lien which constitutes a
Permitted Lien); or
(2) permit any of its Restricted Subsidiaries to issue any
Capital Stock, other than to the Company or a Wholly Owned Subsidiary
of the Company.
The foregoing restrictions shall not apply to (i) an Asset Sale made in
compliance with Section 4.13 of this Indenture (provided that if such Asset Sale
is for less than all of the outstanding Capital Stock of any Restricted
Subsidiary held by the Company or any of its Restricted Subsidiaries, such Asset
Sale must also comply with Section 4.11 of this Indenture), (ii) the issuance of
Preferred Stock in compliance with Section 4.19 of this Indenture or (iii) if,
immediately after giving effect to such issuance, sale or other disposition,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto would
have been permitted to be made under Section 4.11 above if made on the date of
such issuance, sale or other disposition.
Section 4.21. Limitation on Transfer of Assets to Certain Subsidiaries
--------------------------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of
its assets or property to any Subsidiary that is not a Wholly Owned Subsidiary.
Section 4.22. Limitation on Guarantees by Restricted Subsidiaries
---------------------------------------------------
The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to guarantee any Indebtedness of the Company or any
<PAGE>
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other Restricted Subsidiary of the Company (other than the guarantee of
Indebtedness of a Regulated Restricted Subsidiary by another Regulated
Restricted Subsidiary), unless, in any such case,
(1) such Restricted Subsidiary executes and delivers a
supplemental indenture to this Indenture providing a guarantee of
payment of the Notes by such Restricted Subsidiary (the "Guarantee");
and
(2) if any such Guarantee of such Restricted Subsidiary is
provided in respect of:
(a) Senior Indebtedness, the Guarantee or other instrument
provided by such Restricted Subsidiary in respect of such Senior
Indebtedness may be superior to the guarantee pursuant to
subordination provisions no less favorable to the Holders of the Notes
than those contained in this Indenture; and
(b) Indebtedness that is expressly subordinated to the Notes,
the Guarantee or other instrument provided by such Restricted
Subsidiary in respect of such subordinated Indebtedness shall be
subordinated to the guarantee pursuant to subordination provisions no
less favorable to the Holders of the Notes than those contained in
this Indenture.
Notwithstanding the foregoing, any such guarantee by a Restricted
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon:
(1) the unconditional release of such Restricted Subsidiary from
its liability in respect of the Indebtedness in connection with which
such guarantee was executed and delivered pursuant to the preceding
paragraph; or
(2) any sale or other disposition (by merger or otherwise) to
any Person which is not a Restricted Subsidiary of the Company of all
of the Company's Capital Stock in, or all or substantially all of the
assets of, such Restricted Subsidiary; provided that
(a) such sale or disposition of such Capital Stock or assets
is otherwise in compliance with the terms of this Indenture; and
(b) such assumption, Guarantee or other liability of such
Restricted Subsidiary has been released by the holders of the other
Indebtedness so guaranteed.
Section 4.23. Limitation on Sale and Lease-Back Transactions.
----------------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries (other than any Regulated Restricted Subsidiary) to, enter into any
Sale and Lease-Back Transaction; provided that the Company may enter into a Sale
and Lease-Back Transaction if:
(1) the Company could have
<PAGE>
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(a) incurred Indebtedness (other than Permitted
Indebtedness) in an amount equal to the Attributable Indebtedness
relating to such Sale and Lease-Back Transaction under Section
4.10 of this Indenture; and
(b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.15 of this Indenture;
(2) the gross cash proceeds of that Sale and Lease-Back
Transaction are at least equal to the fair market value of the
Property sold; and
(3) the transfer of assets in that Sale and Lease-Back
Transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with Section 4.13 of this Indenture.
Section 4.24. Payments for Consent.
--------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, 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 Notes unless such consideration is offered to be paid or agreed
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
amendment.
Section 4.25. Suspension of Certain Covenants if Securities Rated Investment
--------------------------------------------------------------
Grade.
-----
Notwithstanding the foregoing, during any period of time that (i) the
ratings assigned to the Notes by both of the Rating Agencies are Investment
Grade Ratings and (ii) no Default has occurred and is continuing hereunder, the
Company and its Restricted Subsidiaries will not be subject to the provisions of
Sections 4.10, 4.11, 4.13, 4.14 and clause (c) of 5.01 (collectively, the
"Suspended Covenants"). In the event that the Company and its Restricted
-------------------
Subsidiaries are not subject to the Suspended Covenants with respect to the
Notes for any period of time as a result of the preceding sentence and,
subsequently, one or both Rating Agencies withdraw their ratings or downgrade
the ratings assigned to such Notes below the required Investment Grade Ratings,
then the Company and each of its Restricted Subsidiaries (except to the extent
that any such Restricted Subsidiary is not subject to such covenant pursuant to
the terms thereof) will thereafter again be subject to the Suspended Covenants
for the benefit of such Notes and compliance with the Suspended Covenants with
respect to Restricted Payments made after the time of such withdrawal or
downgrade will be calculated in accordance with the terms of Section 4.11 as if
such section had been in effect during the entire period of time from the date
of this Indenture.
<PAGE>
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ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation, Merger and Sale of Assets.
------------------------------------------------------
The Company shall not (1) consolidate or merge with or into
another Person (whether or not the Company shall be the continuing Person), or
(2) sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets (as an entirety or substantially as an entirety
in one transaction or a series of related transactions) to any Person unless:
(a) the Company is the continuing Person, or the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or to which the assets of the Company are sold, assigned,
transferred, leased, conveyed or otherwise disposed of shall be a
corporation organized and existing under the laws of the United States or
any State thereof or the District of Columbia and shall expressly assume,
by a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company under
this Indenture and the Notes, and the obligations thereunder shall remain
in full force and effect;
(b) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and
(c) immediately after giving effect to such transaction on a pro
forma basis the Company or such Person shall be able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
Section 4.10 of this Indenture;
provided, however, that any such transaction effected solely for the purpose of
changing the Company's jurisdiction of incorporation need not comply with the
foregoing clauses (b) and (c).
In connection with any consolidation, merger or transfer of
assets contemplated by this provision, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Opinion of Counsel, stating that such consolidation, merger or
transfer and the supplemental indenture in respect thereto comply with this
provision and that all conditions precedent herein provided for relating to such
transaction or transactions have been complied with.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of related
transactions) of all or substantially all of the Property and assets of one or
more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the Property and assets of the Company,
shall be deemed to be the transfer of all or substantially all of the Property
and assets of the Company.
Section 5.02. Successor Person Substituted.
----------------------------
Upon any consolidation, merger, conveyance or any transfer of all
or substantially all of the assets of the Company in accordance with Section
5.01 above, the successor entity formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such
<PAGE>
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successor entity had been named as the Company and thereafter the predecessor
entity shall be relieved of all obligations and covenants under this Indenture
and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
-----------------
An "Event of Default" occurs if
(a) there is a default in the payment of any principal of, or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption, required purchase or otherwise, whether or not
such payment is prohibited by the provisions of Article 12 hereof;
(b) there is a default in the payment of any interest on any Note
when the same becomes due and payable and the default continues for a
period of 30 days, whether or not such payment is prohibited by the
provisions of Article 12 hereof;
(c) there is a default by the Company or any Restricted
Subsidiary in the observance or performance of any other covenant in the
Notes or this Indenture for 30 days after written notice from the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Notes then outstanding (except in the case of a default with respect to
Sections 4.16 or 5.01 which shall constitute an Event of Default with such
notice requirement but without such passage of time requirement);
(d) there is a failure to pay at final maturity (giving effect to
any waiver or extension thereof) principal of any Indebtedness of the
Company or any Restricted Subsidiary thereof or the acceleration of any
such Indebtedness, if the aggregate amount of such Indebtedness, together
with the amount of any other such Indebtedness in default for failure to
pay principal at final maturity or which has been accelerated, aggregates
$10.0 million or more at any time;
(e) any final judgment or judgments which can no longer be
appealed for the payment of money in excess of $10.0 million shall be
rendered against the Company or any Restricted Subsidiary thereof, and
shall not be discharged for any period of 60 consecutive calendar days
during which a stay of enforcement shall not be in effect;
(f) 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
all or substantially all of its Property,
<PAGE>
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(D) makes a general assignment for t he benefit of its
creditors,
(E) generally is not able to pay its debts as they become
due, or
(F) takes any corporate action to authorize or effect any of
the foregoing ;
(g) 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 all or substantially all of the Property of the
Company or any Restricted Subsidiary, or
(C) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days; and
(h) any of the Guarantees ceases to be in full force and effect
or any of the Guarantees is declared to be null and void and unenforceable
or any of the Guarantees is found to be invalid or any of the Guarantors
denies its liability under its Guarantee (in each case other than by reason
of release of a Guarantor in accordance with the terms of this Indenture).
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
Section 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default of the
type described in Section 6.01(f) or (g)) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued and unpaid interest, if any, to the date of acceleration and (1) the
same shall become immediately due and payable or (2) if there are any amounts
outstanding under the Senior Credit Facility, shall become immediately due and
payable upon the first to occur of an acceleration under the Senior Credit
Facility or five Business Days after receipt by the Company and the
representative under the Senior Credit Facility of a notice of acceleration;
provided, however, that after such acceleration but before a judgment or decree
based on such acceleration is obtained by the Trustee, the Holders of a majority
in aggregate principal amount of outstanding Notes may rescind and annul such
acceleration if
(1) all Events of Default, other than nonpayment of
principal, premium, if any, or interest that has become due solely because
of the acceleration, have been cured or waived;
(2) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which
has become due otherwise than by such declaration of acceleration, has been
paid;
<PAGE>
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(3) the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances;
and
(4) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(f) or (g) above, the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel that such Event
of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto. In case an Event of Default of the type described in Section
6.01(f) or (g) above shall occur, the principal, premium and interest amount
with respect to all of the Notes shall be due and payable immediately without
any declaration or other act on the part of the Trustee or the Holders.
Section 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or premium, if any, and interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture and may
take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
Section 6.04. Waiver of Past Defaults and Events of Default.
---------------------------------------------
Subject to Sections 2.09, 6.02, 6.07 and 8.02 hereof, the Holders
of a majority in principal amount of the Notes then outstanding have the right
to waive past Defaults under this Indenture except a Default in the payment of
the principal of, or interest or premium, if any, on any Note as specified in
clauses (a) and (b) of Section 6.10 or in respect of a covenant or a provision
which cannot be modified or amended without the consent of all Holders as
provided for in Section 8.02. The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 6.05. Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee by this Indenture. The Trustee,
however, may
<PAGE>
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refuse to follow any direction that conflicts with law or this Indenture or that
the Trustee determines may be unduly prejudicial to the rights of another Holder
not taking part in such direction, and the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken or if the
Trustee in good faith shall, by a Trust Officer, determine that the proceedings
so directed may involve it in personal liability; provided that the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction. In the event the Trustee takes any action or follows any
direction pursuant to this Indenture, the Trustee shall be entitled to
indemnification reasonably satisfactory to it against any loss or expense caused
by taking such action or following such direction. This Section 6.05 shall be in
lieu of Section 316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as permitted
by the TIA.
Section 6.06. Limitation on Suits.
-------------------
Subject to Section 6.07 below, no Holder shall have any right to
institute any proceeding with respect to this Indenture or any remedy thereunder
unless:
(1) such Holder has given the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of
the outstanding Notes have made a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or
expense which may be incurred in compliance with such request;
(4) the Trustee fails to institute such proceeding within 60
calendar days after receipt of such notice and the offer of indemnity; and
(5) the Trustee has not received directions inconsistent with
such written request during such 60-day period by the Holders of a majority
in aggregate principal amount of the outstanding Notes.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 6.07. Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of, or premium, if any, or accrued
interest of any Note held by such Holder on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, is absolute and unconditional and shall not
be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default 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 unpaid principal, premium and accrued interest
remaining unpaid, together with, to the extent that payment of such interest is
lawful, interest on overdue principal and interest on overdue installments of
interest, in each case at the rate set forth in Sec-
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tion 4.01, and such further amounts as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
or reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceedings.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: if the Holders are forced to proceed against the Company
or any Guarantor directly without the Trustee, to Holders for their
collection costs;
THIRD: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
FOURTH: to the Company or, to the extent the Trustee collects any
amounts from any Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit,
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having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more
than 10% in principal amount of the Notes then outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations
shall be implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
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 be under a duty to examine the same 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) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
reasonably satisfactory to it against such risk, liability, loss, fee or expense
which might be incurred by it in compliance with such request or direction.
<PAGE>
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(e) Whether or not herein expressly provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
Section 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01 hereof:
(a) The Trustee may conclusively rely on any document reasonably
believed by it to be genuine and to have been signed or presented by the
proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting with respect
to any matters contemplated by this Indenture or the Notes it may consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, or both, which shall conform to the provisions of
Section 13.05 hereof. The Trustee shall be protected and shall not be
liable for any action it takes or omits to take in good faith in reliance
on such certificate or opinion or the advice of such counsel.
(c) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent (other than an agent who is an employee of the Trustee) so long as
the appointment of such agent was made with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel as to matters of law shall be full
and complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(g) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
<PAGE>
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(h) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered to the Trustee and not superseded.
Section 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may make loans to, accept deposits from,
perform services for or otherwise deal with the Company, or any Affiliates
thereof, with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, shall be subject to
Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the sale of
Notes or any money paid to the Company pursuant to the terms of this Indenture
and it shall not be responsible for any statement of the Company in this
Indenture or the Notes other than the Trustee's certificate of authentication.
Section 7.05. Notice of Defaults.
------------------
If a Default or an Event of Default occurs and is continuing and
if the Trustee has actual knowledge of such Default or Event of Default, the
Trustee shall mail to each Holder notice of the uncured Default or Event of
Default within 90 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of principal of, premium
or interest on, any Note, including an accelerated payment and the failure to
make payment on the Change of Control Payment Date pursuant to a Change of
Control Offer or on the Excess Proceeds Payment Date pursuant to an Excess
Proceeds Offer and, except in the case of a failure to comply with Article 5
hereof, the Trustee may withhold the notice if and so long as its Board of
Directors, the executive committee of its Board of Directors or a committee of
its directors and/or Trust Officers in good faith determines that withholding
the notice is in the interest of the Holders. This Section 7.05 shall be in lieu
of the proviso to Section 315(b) of the TIA, and such proviso of Section 315(b)
of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
Section 7.06. Reports by Trustee to Holders.
-----------------------------
If required by TIA Section 313(a), within 60 days after March 15
of any year, commencing the March 15 following the date of this Indenture, the
Trustee shall mail to each Holder a brief report dated as of such March 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b), (c) and (d).
<PAGE>
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Reports pursuant to this Section 7.06 shall be transmitted by
mail:
(1) to all registered Holders, as the names and addresses of such
Holders appear on the Registrar's books; and
(2) to such Holder as have, within the two years preceding such
transmission, filed their names and addresses with the Trustee for that
purpose.
A copy of each report at the time of its mailing to Holders shall
be filed with the Commission and each stock exchange, if any, on which the Notes
are listed. The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange or of any delisting thereof.
Section 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for the Trustee's services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture or in connection with the
collection of any funds. Such expenses shall include the reasonable fees and
expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and its agents,
employees, stockholders and directors and officers for, and hold them harmless
against, any and all loss, liability, damage, claim or expense, including taxes
(other than taxes based on the income of the Trustee) incurred by them except
for such actions to the extent caused by any negligence, bad faith or willful
misconduct on their part, arising out of or in connection with the acceptance or
administration of this trust including the reasonable costs and expenses of
defending themselves against any claim (whether asserted by the Company, a
Holder or any other Person) or liability in connection with the exercise or
performance of any of their rights, powers or duties hereunder. The Trustee
shall notify the Company promptly, in writing, of any claim asserted against the
Trustee for which it may seek indemnity. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; provided that any settlement of a claim shall be
approved in writing by the Trustee. The Company need not pay for any settlement
made without its written consent, which consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee through its negligence,
bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of, premium or interest on particular Notes.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) occurs, such expenses and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligation of the Company under this Section 7.07 shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.
<PAGE>
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Section 7.08. Replacement of Trustee.
----------------------
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing
and may appoint a successor Trustee. The Company may remove the Trustee at its
election if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Notes may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.
--------------------------------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, subject to this Article 7, the successor corporation without any
further act shall be the successor Trustee.
<PAGE>
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Section 7.10. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). 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. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of TIA
Section 310(b), the Trustee and the Company shall comply with the provisions of
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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, the Trustee
shall resign immediately in the manner and with the effect hereinbefore
specified in this Article 7.
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
therein. The provisions of TIA Section 311 shall apply to the Company as
obligors of the Notes.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
--------------------------
The Company and the Guarantors, if any, when authorized by a
Board Resolution, and the Trustee may amend or supplement this Indenture, the
Notes or the Guarantees, if any, without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to provide for uncertificated Notes in addition to or in
place of Certificated Notes;
(3) to comply with Article 5;
(4) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit
or rights to the Holders;
(6) to add to the covenants of the Company or a Guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or any Guarantor;
<PAGE>
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(7) to secure the Notes pursuant to the requirements of Section
4.15 or otherwise;
(8) to reflect the release of a Guarantor from its obligations
with respect to its Guarantee pursuant to Section 10.06 or to add a
Guarantor pursuant to Section 4.21; or
(9) to make any other change that does not materially and
adversely affect the rights of any Holder under this Indenture.
Section 8.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, and the Guarantors, if any,
when each is authorized by a Board Resolution of their respective Boards of
Directors, and the Trustee may amend or supplement this Indenture or the Notes
or the Guarantees, if any, with the written consent of the Holders of at least a
majority in principal amount of the outstanding Notes. Subject to Section 6.07,
the Holders of a majority in principal amount of the outstanding Notes may waive
compliance by the Company, or any Guarantor with any provision of this
Indenture, the Notes, or any Guarantees. However, without the consent of each
Holder affected, an amendment, supplement or waiver, including a waiver pursuant
to Section 6.04, may not:
(1) reduce the percentage of the principal amount of outstanding
Notes whose Holders must consent to an amendment, supplement or waiver, or
consent to take any action under this Indenture or the Notes;
(2) reduce the rate of or change the time for payment of interest
(including defaulted interest or Additional Interest) on any Note;
(3) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on which any
Notes may be subject to redemption or repurchase, or reduce the redemption
or repurchase price therefor;
(4) make any Note payable in money other than that stated in the
Note or change the place of payment from New York, New York;
(5) waive a Default in the payment of the principal of, or
interest or premium on, or any redemption payment with respect to, any Note
(except a rescission of acceleration of the Notes by the Holders as
provided in Section 6.02 and a waiver of the payment default that resulted
from such acceleration);
(6) make any changes in Sections 6.04 or 6.07 hereof or this
sentence of Section 8.02;
(7) affect the subordination or ranking of the Notes or any
Guarantee in a manner adverse to the Holders;
(8) after such obligation has arisen, amend, change or modify in
any material respect, any obligation of the Company to make and consummate
a Change of Control Offer in the event of a Change of Control or, make and
consummate an Excess Proceeds Offer with respect to any Asset Sale that has
been consummated or modify any of the provisions or definitions with
respect thereto; or
<PAGE>
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(9) release any Guarantor from any of its obligations under any
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture.
After an amendment, supplement or waiver under this Section 8.02
becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the receipt by the Trustee of evidence reasonably satisfactory to the
Trustee of the consent of the Holders as aforesaid and upon receipt by the
Trustee of the documents described in Section 8.06 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under
this Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
Section 8.03. Compliance with TIA.
-------------------
Every amendment to or supplement of this Indenture, the Notes or
any Guarantees shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(1) through (9) of Section 8.02, in which case, the amendment, supplement or
waiver shall bind only each Holder who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a
<PAGE>
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Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
Section 8.05. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement, or waiver changes the terms of a
Note, the Trustee may request the Holder to deliver it to the Trustee. In such
case, the Trustee shall place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determine, in exchange for the Note the Company shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment supplement or waiver.
Section 8.06. Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel, stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article 8 is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
any Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall be discharged and shall cease to be of
further effect (except those obligations referred to in the penultimate
paragraph of this Section 9.01) as to all outstanding Notes and the Trustee, on
written demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
either:
(a) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 hereof and (ii) Notes for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for
cancellation; or
(b) (i) either (A) pursuant to Article 3, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Notes under arrangements
satisfactory to the Trustee for the giving of such notice or (B) all Notes
not theretofore delivered to the Trustee for cancellation have become due
and payable; (ii) the Company has irrevocably deposited or caused to be
deposited with the Trustee in trust an amount of U.S. legal tender or U.S.
Government Obligations sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest
<PAGE>
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on the Notes to the date of such deposit; (iii) no Default or Event of
Default with respect to this Indenture or the Notes shall have occurred and
be continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation of,
or constitute a default under, any other instrument to which the Company is
a party or by which it is bound; (iv) the Company has paid or caused to be
paid all other sums payable hereunder by the Company; (v) the Company has
delivered to the Trustee (A) irrevocable instructions to apply the
deposited money toward payment of the Notes at the maturity or redemption
thereof, and (B) an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
that such satisfaction and discharge does not result in a default under the
Senior Credit Facility (if then in effect) or any other agreement or
instrument then known to such counsel which binds or affects the Company;
and (vi) that from and after the time of deposit, the money deposited shall
not be subject to the rights of holders of Senior Indebtedness pursuant to
the provisions of Article 12 or to the rights of holders of Guarantor
Senior Indebtedness pursuant to the provisions of Article 11.
Notwithstanding the foregoing paragraph, the Company's obligations in
Article 2 and Sections 4.01, 4.07, 7.07 and 8.06 shall survive until the Notes
are no longer outstanding pursuant to the last paragraph of Section 2.08. After
the Notes are no longer outstanding, the Company's obligations in Sections 7.07,
8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and any Guarantor's
obligations under any Notes, any Guarantees and this Indenture except for those
surviving obligations specified above.
Section 9.02. Legal Defeasance.
----------------
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, elect to have this section
be applied to all outstanding Notes upon compliance with the conditions set
forth in Section 9.04.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.04, be deemed to have
been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the
-----------------
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 9.05 hereof and the other
Sections of this Indenture referred to in (i) and (ii) below, and to have
satisfied all their other respective obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), and Holders and
any amounts deposited under Section 9.04 hereof shall cease to be subject
to any obligations to, or the rights of, any holder of Senior Indebtedness
under Article 12 or otherwise, except for the following provisions, which
shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive solely from the trust
fund described in Section 9.05 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (ii) the Company's
obligations with respect to such Notes under Article 2 and Section 4.07
hereof, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and
(iv) this Article 9. Subject to compliance with this Article 9, the
Company
<PAGE>
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may exercise its option under this Section 9.02 notwithstanding the prior
exercise of its option under Section 9.03 below with respect to the Notes.
Section 9.03. Covenant Defeasance.
-------------------
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, elect to have this Section
be applied to all outstanding Notes upon compliance with the conditions set
forth in Sectio n 9.04.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.04 hereof, be
released from its obligations under the covenants contained in Sections
4.05, 4.08, 4.09 and 4.10 through 4.24, inclusive, and Article 5 hereof
with respect to the outstanding Notes on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
-------------------
Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder and
Holders and any amounts deposited under Section 9.04 hereof shall cease to
be subject to any obligations to the rights of, any holder of Senior
Indebtedness under Article 12 or otherwise. For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event or Default under Section 6.01(c)
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. In addition, upon the Company's
exercise under paragraph (a) hereof of the option applicable to this
paragraph (b), subject to the satisfaction of the conditions set forth in
Section 9.04 hereof, Sections 6.01(c), 6.01(d) and 6.01(e) shall not
constitute Events of Default.
Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance.
-----------------------------------------------------
The following shall be the conditions to the application of either
Section 9.02 or 9.03 hereof to the outstanding Notes and the guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee (or other
qualifying trustee), in trust, for the benefit of the Holders, U.S. legal
tender or U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, and interest on the Notes on the scheduled due dates or on the
applicable Redemption Date, as the case may be, provided that the Trustee
shall have received an irrevocable written order from the Company
instructing the Trustee to apply such U.S. legal tender or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Notes;
(b) in the case of an election under Section 9.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or
<PAGE>
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(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 Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such deposit, Legal Defeasance and discharge 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 deposit, Legal Defeasance
and discharge had not occurred;
(c) in the case of an election under Section 9.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, Covenant Defeasance and discharge 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 deposit,
Covenant Defeasance and discharge had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 6.01(f) and
6.01(g) hereof are concerned, at any time in the period ending on the 91st
day after the date of such deposit or, if longer, ending on the day
following the expiration of the longest preference period under any
Bankruptcy Law (it being understood that this condition shall not be deemed
to be satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of or constitute a default under this Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with;
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Senior Indebtedness of the Company, including,
without limitation, those arising under this Indenture, and (ii) assuming
no intervening event of the type described in Sections 6.01(f) and 6.01(g)
between the date of deposit and the 91st day following the deposit or, if
longer, ending on the day following the expiration of the longest
preference period under any Bankruptcy Law (it being understood that this
condition should not be deemed to be satisfied until the expiration of such
period) and further assuming that no Holder is an insider of the Company,
after the 91st day following the deposit or, if longer, ending on the day
following the expiration of the longest preference period under any
Bankruptcy Law (it being understood that this condition should not be
deemed to be satisfied until the expiration of such period), the trust
funds will not be subject to the effect of any applicable Bankruptcy Law;
(i) such Legal Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest for purposes of the TIA with respect
to any securities of the Company; and
<PAGE>
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(j) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance or Covenant
Defeasance, neither the trust nor the Trustee will be required to register
as an investment company under the Investment Company Act of 1940, as
amended.
Section 9.05. Application of Trust Money.
--------------------------
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 9.01 or 9.04 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes, of all sums due and to become due
thereon in respect of principal, premium, if any, and accrued interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company and the Guarantors shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 9.01 or 9.04 hereof or
the principal, premium, if any, and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon a written
request of the Company in the form of an Officers' Certificate any money or U.S.
Government Obligations held by it as provided in Section 9.01 or 9.04 hereof
which, in the opinion of a nationally-recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06. Repayment to the Company.
------------------------
Subject to Sections 9.01, 9.,02, 9.03, 9.04, 9.05 and 9.07, the
Trustee and the Paying Agent shall promptly pay to the Company upon request any
excess U.S. legal tender or U.S. Government Obligations held by them at any time
and thereupon shall be relieved from all liability with respect to such money.
The Trustee and the Paying Agent shall pay to the Company upon written request
any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; provided that the Trustee or such
Paying Agent, before being required to make any payment, shall at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York or mail to each Holder entitled to such money notice that
such money remains unclaimed, and that after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid, upon written
request, to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
Section 9.07. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and each Guarantor's obligations under this
Indenture, the Notes and the guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 9 until such time as the
Trustee
<PAGE>
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or Paying Agent is permitted to apply all such U.S. legal tender or
U.S.Government Obligations in accordance with Section 9.01 hereof; provided,
however, that if the Company or the Guarantors have made any payment of
principal of, premium, if any, or accrued interest on any Notes because of the
reinstatement of their obligations, the Company and each such Guarantor shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 10
GUARANTEE
Section 10.01. Unconditional Guarantee.
-----------------------
Each Guarantor, if any, that executes a supplemental indenture
pursuant to Section 4.22, hereby unconditionally, jointly and severally,
guarantees to each Holder of a Note authenticated by the Trustee and to the
Trustee and its successors and assigns that the principal of, premium thereon
(if any) and interest on the Notes and any other amounts owed hereunder will be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Notes and all other obligations of
the Company to the Holders or the Trustee hereunder or under the Notes will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; subject, however, to the limitations set forth in Section 10.03. Each
Guarantor, if any, hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor, if any, hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that the Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor, any amount paid by
the Company or any Guarantor to the Trustee or such Holder, each Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between a Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations Guaranteed hereby may be accelerated as provided in Article 6 for
the purpose of each Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6, such obligations (whether or not due and payable)
shall become due and payable by each Guarantor for the purpose of each
Guarantee.
Each Guarantor, if any, also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Article 10.
<PAGE>
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Section 10.02. Severability.
------------
In case any provision of this Article 10 shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 10.03. Limitation on Guarantor's Liability; Contribution.
-------------------------------------------------
Each Guarantor, if any, and by its acceptance hereof, each Holder
and the Trustee, hereby confirm that it is the intention of all such parties
that the Guarantee does not constitute a fraudulent transfer or conveyance for
purposes of Title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. federal or state or other applicable law. To effectuate the foregoing
intention, each Holder and each Guarantor, if any, hereby irrevocably agree that
the obligations of a Guarantor under its Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor, and after giving effect to any collections from
or payments made by or on behalf of such Guarantor in respect of the obligations
of such Guarantor pursuant to the second paragraph of Section 10.03, result in
the obligations of such Guarantor not constituting such a fraudulent transfer or
conveyance.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors, if any, agree, inter se, that in the event any
payment or distribution is made by any Guarantor (a "Funding Guarantor") under a
Guarantee such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor), determined in accordance with GAAP,
subject to the first paragraph of this Section 10.03, for all payments, damages
and expenses incurred by such Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Guarantor's obligations under
a Guarantee.
Section 10.04. Successors and Assigns.
----------------------
This Article 10 shall be binding upon each Guarantor, if any, and
its successors and assigns and shall ensure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions of this Indenture.
Section 10.05. No Waiver.
---------
Neither a failure nor a delay on the part of either the Trustee
or the Holders in exercising any right, power or privilege under this Article 10
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or privilege.
The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 10 at law, in
equity, by statute or otherwise.
Section 10.06. Release of Guarantor.
--------------------
A Guarantor shall be released from all of its obligations under
its Guarantee if:
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(i) the Guarantor has sold all of its assets or the Company and
its Subsidiaries have sold all of the Capital Stock of the Guarantor owned
by them, in each case in a transaction in compliance with Section 4.13
hereof;
(ii) the Guarantor merges with or into or consolidates with, or
transfers all or substantially all of its assets to, the Company or another
Guarantor in a transaction in compliance with Section 5.01 hereof; or
(iii) such Guarantor is designated an Unrestricted Subsidiary in
compliance with Section 4.11 hereof;
and in each such case, the Company have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with.
Section 10.07. Execution of Supplemental Indenture for Future Guarantors.
---------------------------------------------------------
Each Subsidiary which is required to become a Guarantor pursuant
to Section 4.22 shall, and the Company shall cause each such Subsidiary to,
promptly execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit F hereto pursuant to which such Subsidiary
shall become a Guarantor under this Article 10 and shall guarantee the
obligations of the Company under the Notes and this Indenture. Concurrently with
the execution and delivery of such supplemental indenture, the Company shall
deliver to the Trustee an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer and other similar laws relating to
creditors' rights generally and to the principles of equity, whether considered
in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
Section 10.08. Subordination of Subrogation and Other Rights.
---------------------------------------------
Each Guarantor, if any, hereby agrees that any claim against the
Company that arises from the payment, performance or enforcement of such
Guarantor's obligations under the Guarantee or this Indenture, including,
without limitation, any right of subrogation, shall be subject and subordinate
to, and no payment with respect to any such claim of such Guarantor shall be
made before, the payment in full in cash of all outstanding Notes in accordance
with the provisions provided therefor in this Indenture.
ARTICLE 11
SUBORDINATION OF GUARANTEE
Section 11.01. Guarantee Obligations Subordinated to Guarantor Senior
------------------------------------------------------
Indebtedness.
------------
Each Guarantor, if any, covenants and agrees, and the Trustee and
each Holder, by its acceptance of the Notes, likewise covenants and agrees, that
to the extent and in the manner hereinafter set forth in this Article 11, the
Indebtedness represented by the Guarantee and the payment of all obligations on
the Notes
<PAGE>
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pursuant to the Guarantee by such Guarantor are hereby expressly made
subordinate and subject in right of payment as provided in this Article 11 to
the prior indefeasible payment in full in cash of all Guarantor Senior
Indebtedness of such Guarantor whether outstanding on the Issue Date or
thereafter incurred.
This Section 11.01 and the following Sections 11.02 through 11.11
shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of or continue to hold Guarantor Senior Indebtedness
of any Guarantor; such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness of each Guarantor; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
Section 11.02. Payment Over of Proceeds upon Dissolution, etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Guarantor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any general assignment for the benefit of creditors or any other
marshalling of assets or liabilities of any Guarantor, then and in any such
event:
(1) the holders of all Guarantor Senior Indebtedness of such
Guarantor shall be entitled to receive indefeasible payment in full in cash
of all amounts due on or in respect of all such Guarantor Senior
Indebtedness (including interest after the commencement of any such
proceeding at the rate specified on the applicable Guarantor Senior
Indebtedness whether or not such interest constitutes an allowed claim in
such proceeding) before the Holders are entitled to receive, pursuant to
the Guarantee of such Guarantor, any payment or distribution of any kind or
character (other than a payment or distribution from the trust described in
Section 9.01 or Section 9.04) by such Guarantor on account of any of the
obligations of such Guarantor under its Guarantee; and
(2) any payment or distribution of assets of such Guarantor of
any kind or character, whether in cash, property or securities, by set-off
or otherwise, to which the Holders or the Trustee would be entitled but for
the subordination provisions of this Article 11 (other than a payment or
distribution from the trust described in Section 9.01 or Section 9.04)
shall be paid by the liquidating trustee or agent or other Person making
such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Guarantor
Senior Indebtedness of such Guarantor or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Guarantor Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Guarantor Senior Indebtedness held or represented
by each, to the extent necessary to make payment in full in cash of all
such Guarantor Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Guarantor
Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions
of this Section 11.02, the Trustee or any Holder shall have received any
payment or distribution of assets of such Guarantor of any kind or
character, whether in cash, Property or securities, including, without
limitation, by way of set-off or otherwise, in respect of any of the
obligations of any Guarantor pursuant to its Guarantee (other than a
payment or distribution in the form of Permitted Junior Securities or from
the trust described in Section 9.01 or Section 9.04) before all Guarantor
Senior Indebtedness of such Guarantor is indefeasibly paid in full, then
and in such event such payment or distribution shall be paid over or de-
<PAGE>
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livered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of such Guarantor for application to the payment of
all such Guarantor Senior Indebtedness remaining unpaid, to the extent
necessary to pay all of such Guarantor Senior Indebtedness in full in cash
or, as acceptable to the holders of such Guarantor Senior Indebtedness, any
other manner, after giving effect to any concurrent payment or distribution
to or for the holders of such Guarantor Senior Indebtedness.
The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another Person or the liquidation or dissolution of a Guarantor
following the conveyance, transfer or lease of its Properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of such Guarantor for the purposes of this
Article 11 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by conveyance, transfer or lease such
Properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in such Article 5 hereof.
Section 11.03. Suspension of Guaranteed Obligations When Guarantor Senior
----------------------------------------------------------
Indebtedness in Default.
-----------------------
(a) Unless Section 11.02 hereof shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness of any
Guarantor no payment or distribution (other than a payment or distribution from
the trust described in Section 9.01 or Section 9.04) of any assets or securities
of a Guarantor of any kind or character (including, without limitation, cash,
Property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to its obligations under its Guarantee) shall be made by such
Guarantor, including, without limitation, by way of set-off or otherwise, for or
on account of its obligations under its Guarantee, or for or on account of the
purchase, redemption or other acquisition of the Notes and neither the Trustee
nor any Holder shall take or receive from any Guarantor, directly or indirectly
in any manner, payment in respect of all or any portion of its obligations under
its Guarantee commencing on the date of receipt by the Trustee of a written
notice from the representative of the holders of such Guarantor Senior
Indebtedness (the "Guarantor Representative") of the occurrence of a Payment
Default, and in any such event, such prohibition shall continue until such
Payment Default is cured, waived in writing or otherwise ceases to exist. At
such time as the prohibition set forth in the preceding sentence shall no longer
be in effect, subject to the provisions of the following paragraph (b), such
Guarantor shall resume making any and all required payments in respect of its
obligations under its Guarantee, including any missed payments.
(b) Unless Section 11.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Default on Designated Senior Indebtedness of any
Guarantor, no payment or distribution (other than a payment or distribution from
the trust described in Section 9.01 or Section 9.04) of any assets of such
Guarantor of any kind or character (including, without limitation, cash,
Property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to its obligations under its Guarantee) shall be made by such
Guarantor, including, without limitation, by way of set-off or otherwise, on
account of any of its obligations under its Guarantee, or on account of the
purchase, redemption, defeasance or other acquisition of the Notes and neither
the Trustee nor any Holder shall take or receive from any Guarantor, directly or
indirectly in any manner, payment in respect of all or any portion of its
obligations under its Guarantee for a period (the "Guarantee Payment Blockage
--------------------------
Period") commencing on
- ------
<PAGE>
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the date of receipt by the Trustee of written notice from the Guarantor
Representative of such Non-Payment Default, unless and until (subject to any
blockage of payments that may then be in effect under the preceding paragraph
(a)) the earliest to occur of the following events: (w) more than 179 days shall
have elapsed since the date of receipt of such written notice by the Trustee,
(x) such Non-Payment Default shall have been cured or waived in writing or shall
have ceased to exist, (y) such Designated Senior Indebtedness shall have been
discharged or indefeasibly paid in full in cash or (z) such Guarantee Payment
Blockage Period shall have been terminated by written notice to such Guarantor
or the Trustee from the Guarantor Representative initiating such Guarantee
Payment Blockage Period, or the holders of at least a majority in principal
amount of such issue of Designated Senior Indebtedness, after which, in the case
of clause (w), (x), (y) or (z), such Guarantor shall resume making any and all
required payments in respect of its obligations under its Guarantee, including
any missed payments. Notwithstanding any other provisions of this Indenture, no
Non-Payment Default with respect to Designated Senior Indebtedness which existed
or was continuing on the date of the commencement of any Guarantee Payment
Blockage Period initiated by the Guarantor Representative shall be, or be made,
the basis for the commencement of a second Guarantee Payment Blockage Period
initiated by the Guarantor Representative unless such Non-Payment Event of
Default shall have been waived for a period of not less than 90 consecutive
days. In no event shall a Guarantee Payment Blockage Period extend beyond 179
days from the date of the receipt by the Trustee of the notice referred to in
this Section 11.03(b) or, in the event of a Non-Payment Event of Default which
formed the basis for a Payment Blockage Period under Section 12.03(b) hereof,
179 days from the date of the receipt by the Trustee of the notice referred to
in Section 12.03(b) (the "Initial Guarantee Blockage Period"). Any number of
additional Guarantee Payment Blockage Periods may be commenced during the
Initial Guarantee Blockage Period; provided, however, that no such additional
Guarantee Payment Blockage Period shall extend beyond the Initial Guarantee
Blockage Period. After the expiration of the Initial Guarantee Blockage Period,
no Guarantee Payment Blockage Period may be commenced under this Section
11.03(b) and no Payment Blockage Period may be commenced under Section 12.03(b)
hereof until at least 360 consecutive days have elapsed from the day of
commencement of the Initial Guarantee Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
any Holder shall have received any payment from a Guarantor prohibited by the
foregoing provisions of this Section 11.03, then and in such event such payment
shall be paid over and delivered forthwith to the Guarantor Representative
initiating the Guarantee Payment Blockage Period, in trust for distribution to
the holders of Guarantor Senior Indebtedness or, if no amounts are then due in
respect of Guarantor Senior Indebtedness, promptly returned to the Guarantor, or
as a court of competent jurisdiction shall direct.
Section 11.04. Trustee's Relation to Guarantor Senior Indebtedness.
---------------------------------------------------
The Trustee and any agent of any Guarantor or the Trustee shall
be entitled to all the rights set forth in this Article 11 with respect to any
Guarantor Senior Indebtedness which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Guarantor Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee or any such agent of any of its rights as such holder.
Nothing in this Article 11 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 11, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebt-
<PAGE>
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edness and the Trustee shall not be liable to any holder of Guarantor Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders, such
Guarantor or any other Person, moneys or assets to which any holder of Guarantor
Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
Nothing in this Section 11.04 shall affect the obligation of any other such
Person receiving such payment or distribution from the Trustee or any other
Agent to hold such payment for the benefit of, and to pay such payment over to,
the holders of Guarantor Senior Indebtedness.
Section 11.05. Subrogation.
-----------
Upon the payment in full of all amounts payable under or in
respect of all Guarantor Senior Indebtedness of a Guarantor, the Holders shall
be subrogated to the rights of the holders of such Guarantor Senior Indebtedness
to receive payments and distributions of cash, property and securities of such
Guarantor made on such Guarantor Senior Indebtedness until all amounts due to be
paid under the Guarantee shall be paid in full. For the purposes of such
subrogation, no payments or distributions to holders of Guarantor Senior
Indebtedness of any cash, property or securities to which Holders or the Trustee
would be entitled except for the provisions of this Article 11, and no payments
over pursuant to the provisions of this Article 11 to holders of Guarantor
Senior Indebtedness by Holders or the Trustee, shall, as among each Guarantor,
its creditors other than holders of Guarantor Senior Indebtedness and the
Holders, be deemed to be a payment or distribution by such Guarantor to or on
account of such Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article 11 shall
have been applied, pursuant to the provisions of this Article 11, to the payment
of all amounts payable under Guarantor Senior Indebtedness, then and in such
case, the Holders shall be entitled to receive from the holders of such
Guarantor Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of Guarantor Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Guarantor Senior Indebtedness in full in cash.
Section 11.06. Guarantee Subordination Provisions Solely to Define Relative
------------------------------------------------------------
Rights.
------
The subordination provisions of this Article 11 are and are
intended solely for the purpose of defining the relative rights of the Holders
on the one hand and the holders of Guarantor Senior Indebtedness on the other
hand. Nothing contained in this Article 11 or elsewhere in this Indenture or in
the Notes is intended to or shall (a) impair, as among each Guarantor, its
creditors other than holders of its Guarantor Senior Indebtedness and the
Holders, the obligation of such Guarantor, which is absolute and unconditional,
to make payments to the Holders in respect of its obligations under its
Guarantee in accordance with its terms; or (b) affect the relative rights
against such Guarantor of the Holders and creditors of such Guarantor other than
the holders of the Guarantor Senior Indebtedness; or (c) prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon a Default or an Event of Default under this Indenture, subject to the
rights, if any, under this Article 11 of the holders of Guarantor Senior
Indebtedness (1) in any case, proceeding, dissolution, liquidation or other
winding-up, assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 11.02 hereof, to
receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder, or
(2) under the conditions specified in Section 11.03 hereof, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
11.03(c) hereof.
The failure by any Guarantor to make a payment in respect of its
obligations on its Guarantee by reason of any provision of this Article 11 shall
not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
<PAGE>
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Section 11.07. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article 11 and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of a
Guarantor whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of such Guarantor owing to such Holder in the form required in such
proceedings.
Section 11.08. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Guarantor
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of a Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by such Guarantor with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
(b) Without limiting the generality of paragraph (a) of this
Section, the holders of Guarantor Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Holders and without impairing or
releasing the subordination provided in this Article 11 or the obligations
hereunder of the Holders to the holders of Guarantor Senior Indebtedness, do any
one or more of the following: (1) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Guarantor Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Guarantor Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (3) release any Person liable in any manner for
the collection or payment of Guarantor Senior Indebtedness; and (4) exercise or
refrain from exercising any rights against a Guarantor and any other Person;
provided, however, that in no event shall any such actions limit the right of
the Holders to take any action to accelerate the maturity of the obligations
under the Guarantees pursuant to Article 6 hereof or to pursue any rights or
remedies hereunder or under applicable laws if the taking of such action does
not otherwise violate the terms of this Indenture.
Section 11.09. Notice to Trustee.
-----------------
(a) A Guarantor shall give prompt written notice to the Trustee
of any fact known to such Guarantor which would prohibit the making of any
payment to or by the Trustee at its Corporate Trust Office in respect of the
Notes. Notwithstanding the provisions of this Article 11 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the obligations under the Guarantees, unless and until
the Trustee shall have received written notice thereof from such Guarantor or a
holder of Guarantor Senior Indebtedness or from any trustee, fiduciary or agent
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of this Section 11.09, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 11.09 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose under this Indenture (including,
without limitation, the payment of the principal of, premium, if any, or
interest on any obligation under a Guarantee), then, anything herein contained
to the contrary notwithstanding but without limiting the rights and remedies of
the holders of Guarantor Senior Indebtedness or any trustee, fiduciary or agent
therefor, the Trustee shall have full power and authority to receive such money
and to apply the same to the purpose for which such money was received and shall
not be affected by any notice
<PAGE>
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to the contrary which may be received by it within two Business Days prior to
such date; nor shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition preventing any such
payment unless and until the Trustee shall have received an Officers'
Certificate to such effect.
(b) In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of a Guarantor
referred to in this Article 11, the Trustee and the Holders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Guarantor Senior Indebtedness and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
Section 11.11. No Suspension of Remedies.
-------------------------
Nothing contained in this Article 11 shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
obligations under the Guarantees pursuant to Article 6 or to pursue any rights
or remedies hereunder or under applicable law, subject to the rights, if any,
under this Article 11 of the holders, from time to time, of Guarantor Senior
Indebtedness.
ARTICLE 12
SUBORDINATION OF NOTES
Section 12.01. Notes Subordinate to Senior Indebtedness.
----------------------------------------
The Company covenants and agrees, and the Trustee and each Holder
by its acceptance of Notes likewise covenants and agrees, that to the extent and
in the manner hereinafter set forth in this Article 12; the payment of all
obligations on the Notes by the Company are hereby expressly made subordinate
and subject in right of payment as provided in this Article 12 to the prior
indefeasible payment in full in cash of all Senior Indebtedness of the Company,
whether outstanding on the Issue Date or thereafter incurred.
This Section 12.01 and the following Sections 12.02 through 12.11
shall constitute a continuing offer to all Persons who, in reliance on such
provisions, become holders of or continue to hold Senior In-
<PAGE>
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debtedness of the Company; and such provisions are made for the benefit of all
the holders of Senior Indebtedness of the Company; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
Section 12.02. Payment Over of Proceeds upon Dissolution, etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, whether voluntary or involuntary or (b)
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any general assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Company, then and in any such event:
(1) the holders of Senior Indebtedness of the Company shall be
entitled to receive indefeasible payment in full in cash of all amounts due
on or in respect of all Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified on the applicable
Senior Indebtedness whether or not such interest constitutes an allowed
claim in such proceeding) before the Holders are entitled to receive any
payment or distribution of any kind or character (other than a payment or
distribution from the trust described in Section 9.01 or Section 9.04) on
account of any obligations on the Notes; and
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, Property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article 12 (other than a payment or distribution
from the trust described in Section 9.01 or Section 9.04) shall be paid by
the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or
their representative or representatives or to the trustee or trustees under
any indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full in
cash of all Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions
of this Section 12.02, the Trustee or any Holder shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including, without limitation, by
way of set-off or otherwise, in respect of the principal of, premium, if
any, and interest on the Notes before all Senior Indebtedness is
indefeasibly paid in full, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Company for
application to the payment of all such Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in full in
cash or, as acceptable to the holders of such Senior Indebtedness, any
other manner, after giving effect to any concurrent payment or
distribution, to or for the holders of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article 5
<PAGE>
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hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Article 12 if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article 5 hereof.
Section 12.03. Suspension of Payment When Senior Indebtedness in Default.
---------------------------------------------------------
(a) Unless Section 12.02 hereof shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness of the
Company, no payment or distribution (other than a payment or distribution from
the trust described in Section 9.01 or Section 9.04) of any assets or securities
of the Company of any kind or character (including, without limitation, cash,
Property and any 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 Notes by the Company) shall be made by the
Company or any Restricted Subsidiary of the Company, including, without
limitation, by way of set-off or otherwise, for or on account of any obligations
under the Notes or this Indenture, or for or on account of the purchase,
redemption or other acquisition of the Notes, and neither the Trustee nor any
Holder shall take or receive from the Company, directly or indirectly in any
manner, payment in respect of all or any portion of Notes commencing on the date
of receipt by the Trustee of written notice from the representative of the
holders of such Designated Senior Indebtedness (the "Representative") to the
--------------
Trustee of written notice of the occurrence of a Payment Default, and in any
such event, such prohibition shall continue until such Payment Default is cured,
waived in writing or otherwise ceases to exist. At such time as the prohibition
set forth in the preceding sentence shall no longer be in effect, subject to the
provisions of the following paragraph (b), the Company shall resume making any
and all required payments in respect of the Notes, including any missed
payments.
(b) Unless Section 12.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Default on Designated Senior Indebtedness of the
Company, no payment or distribution (other than a payment or distribution from
the trust described in Section 9.01 or Section 9.04) of any assets of the
Company of any kind or character (including, without limitation, cash, property
and any 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 Notes by the Company) shall be made by the Company or any
Restricted Subsidiary of the Company, including, without limitation, by way of
set-off or otherwise, on account of any obligations under the Notes or this
Indenture or on account of the purchase, redemption, defeasance or other
acquisition of Notes and neither the Trustee nor any Holder shall take or
receive from the Company, directly or indirectly in any manner, payment in
respect of all or any portion of Notes for a period (the "Payment Blockage
----------------
Period") commencing on the date of receipt by the Trustee of written notice from
- ------
the Representative of such Non-Payment Default unless and until (subject to any
blockage of payments that may then be in effect under the preceding paragraph
(a)) the earliest to occur of the following events: (w) more than 179 days
shall have elapsed since the date of receipt of such written notice by the
Trustee, (x) such Non-Payment Default shall have been cured or waived in writing
or shall have ceased to exist, (y) such Designated Senior Indebtedness shall
have been discharged or indefeasibly paid in full in cash or (z) such Payment
Blockage Period shall have been terminated by written notice to the Company or
the Trustee from the Representative initiating such Payment Blockage Period, or
the holders of at least a majority in principal amount of such issue of
Designated Senior Indebtedness, after which, in the case of clause (w), (x), (y)
or (z), the Company shall resume making any and all required payments in respect
of the Notes, including any missed payments. Notwithstanding any other
provisions of this Indenture, no Non-Payment Default with respect to Designated
Senior Indebtedness which existed or was continuing on the date of the
commencement of any Payment Blockage Period initiated by the Representative
shall
<PAGE>
-92-
be, or be made, the basis for the commencement of a second Payment Blockage
Period initiated by the Representative unless such event of default shall have
been waived for a period of not less than 90 consecutive days. In no event shall
a Payment Blockage Period extend beyond 179 days from the date of the receipt by
the Trustee of the notice referred to in this Section 12.03(b) or in the event
of a Non-Payment Default which formed the basis of a Guarantee Payment Blockage
Period under Section 11.03(b) hereof, 179 days from the default the receipt by
the Trustee of the notice referred to in Section 11.03(b) (the "Initial Blockage
----------------
Period"). Any number of additional Payment Blockage Periods may be commenced
- ------
during the Initial Blockage Period; provided, however, that no such additional
Payment Blockage Period shall extend beyond the Initial Blockage Period. After
the expiration of the Initial Blockage Period, no Payment Blockage Period may be
commenced under this clause (b) and no Guarantee Payment Blockage Period may be
commenced under Section 11.03(b) hereof until at least 365 consecutive days have
elapsed from the day of commencement of the Initial Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
any Holder shall have received any payment prohibited by the foregoing
provisions of this Section 12.03, then and in such event such payment shall be
paid over and delivered forthwith to the Representative initiating the Payment
Blockage Period, in trust for distribution to the holders of Senior Indebtedness
or, if no amounts are then due in respect of Senior Indebtedness, promptly
returned to the Company, or otherwise as a court of competent jurisdiction shall
direct.
Section 12.04. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to any
Senior Indebtedness which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
Nothing in this Article 12 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly pay
over or deliver to Holders, the Company or any other Person, moneys or assets to
which any holder of Senior Indebtedness shall be entitled by virtue of this
Article 12 or otherwise. Nothing in this Section 12.04 shall affect the
obligation of any other such Person receiving such payment or distribution from
the Trustee or any other Agent to hold such payment for the benefit of, and to
pay such payment over to, the holders of Senior Indebtedness.
Section 12.05. Subrogation.
-----------
Upon the payment in full of all Senior Indebtedness, the Holders shall
be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of, premium, if any and interest
on the Notes shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article 12, and no payments over pursuant to
the provisions of this Article 12 to the holders of Senior Indebtedness by
Holders or the Trustee, shall, as among the Company, its creditors other than
<PAGE>
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holders of Senior Indebtedness and the Holders, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 12 shall have been
applied, pursuant to the provisions of this Article 12, to the payment of all
amounts payable under the Senior Indebtedness of the Company, then and in such
case the Holders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in full
in cash.
Section 12.06. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article 12 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article 12 or elsewhere in this Indenture or in the Notes is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest on the Notes as and when the same shall become due and payable
in accordance with their terms; or (b) affect the relative rights against the
Company of the Holders and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
12 of the holders of Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company referred
to in Section 12.02 hereof, to receive, pursuant to and in accordance with such
section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 12.03,
to prevent any payment prohibited by such section or enforce their rights
pursuant to Section 12.03(c) hereof.
The failure to make a payment on account of principal of, premium, if
any, or interest on the Notes by reason of any provision of this Article 12
shall not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
Section 12.07. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article 12 and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of the Company owing to such Holder in the form required in such
proceedings.
Section 12.08. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
<PAGE>
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(b) Without limiting the generality of paragraph (a) of this Section,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 12 or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against the
Company and any other Person; provided, however, that in no event shall any such
actions limit the right of the Holders to take any action to accelerate the
maturity of the Notes pursuant to Article 6 hereof or to pursue any rights or
remedies hereunder or under applicable laws if the taking of such action does
not otherwise violate the terms of this Indenture.
Section 12.09. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee at its Corporate Trust Office in respect of the Notes.
Notwithstanding the provisions of this Article 12 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Notes, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Indebtedness or from any
trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of this Section 12.09,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 12.09 at least two Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose under this
Indenture (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Note), then, anything herein contained to
the contrary notwithstanding but without limiting the rights and remedies of the
holders of Senior Indebtedness or any trustee, fiduciary or agent therefor, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of the act or
condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 12, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 12.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article 12, the Trustee and the Holders shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
wind-
<PAGE>
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ing-up or similar case or proceeding is pending, or a certificate of the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or 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 12.
Section 12.11. No Suspension of Remedies.
-------------------------
Nothing contained in this Article 12 shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article 12 of
the holders, from time to time, of Senior Indebtedness.
ARTICLE 13
MISCELLANEOUS
Section 13.01. TIA Controls.
------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 13.02. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Company or any Guarantor:
ST Acquisition Corp.
c/o Laurel Hill Capital Partners LLC
2 Robbins Lane
Suite 201
Jericho, New York 11753
Attention: Kathleen Marion
Tel: (516) 933-3100
Fax: (516) 933-3108
<PAGE>
-96-
Copy to:
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005-1413
Attention: M. Douglas Dunn, Esq.
Tel: (212) 530-5062
Fax: (212) 530-5219
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 100286
Attention: Corporate Trust Trustee Administration
Fax: (212) 815-5915
The Company, any Guarantor or the Trustee by written notice to the
others may designate additional or different addresses for subsequent notices or
communications. Any notice or communication to the Company, any Guarantor or
the Trustee, shall be deemed to have been given or made as of the date so
delivered if personally delivered; when receipt is acknowledged, if telecopied;
and five (5) calendar days after mailing if sent by registered or certified
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first-class mail, postage prepaid, at his address shown on the register kept
by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication to a Holder is mailed in the manner provided above, it shall be
deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 13.03. Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, any Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or any such
Guarantor, as the case may be, shall furnish to the Trustee:
<PAGE>
-97-
(1) an Officers' Certificate (which shall include the statements set
forth in Section 13.05 below) 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 (which shall include the statements set
forth in Section 13.05 below) stating that, in the opinion of such counsel,
all such conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with.
Section 13.05. Statements Required in Certificate and Opinion.
----------------------------------------------
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, it or he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such covenant or condition has been complied with.
Section 13.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at meetings of
Holders. The Registrar and Paying Agent may make reasonable rules for their
functions.
Section 13.07. Business Days; Legal Holidays.
-----------------------------
A "Business Day" is a day that is not a Legal Holiday. A "Legal
Holiday" is a Saturday, a Sunday, a federally-recognized holiday 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 at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
Section 13.08. Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
<PAGE>
-98-
Section 13.09. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 13.10. No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or incorporator, as such,
of the Company or any Guarantor shall not have any liability for any obligations
of the Company or any Guarantor under the Notes, any Guarantees or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creations. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
Section 13.11. Successors.
----------
All agreements of each of the Company and any Guarnators in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee, any additional trustee and any Paying Agents in this Indenture
shall bind its successor.
Section 13.12. Multiple Counterparts.
---------------------
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
Section 13.13. Table of Contents, Headings, etc.
--------------------------------
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 13.14. Separability.
------------
Each provision of this Indenture shall be considered separable and if
for any reason any provision which is not essential to the effectuation of the
basic purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed all as of the date and year first written above.
ST ACQUISITION CORP.
By: _______________________________
Name:
Title:
<PAGE>
THE BANK OF NEW YORK,
as Trustee
By: _____________________________
Name:
Title:
<PAGE>
EXHIBIT A
---------
CUSIP No.:
ST ACQUISITION CORP.
10.25% SENIOR SUBORDINATED NOTE DUE 2010
No. $
ST ACQUISITION CORP., a Texas corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of [ ]
DOLLARS on April 1, 2010.
Interest Payment Dates: April 1 and October 1, commencing October 1,
2000.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually by its duly authorized officers and a facsimile of its corporate seal
to be affixed hereto or imprinted hereon.
ST ACQUISITION CORP.
By: ____________________________
Name:
Title:
By: ___________________________
Name:
Title:
A-1
<PAGE>
Certificate of Authentication
This is one of the 10.25% Senior Subordinated Notes due 2010 referred
to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: ____________________________
Authorized Signatory
Date of Authentication:
A-2
<PAGE>
(REVERSE OF SECURITY)
10.25% SENIOR SUBORDINATED NOTE DUE 2010
1. Interest. ST ACQUISITION CORP., a Texas corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
-------
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
October 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on March 15 or September 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Company may pay principal, premium,
if any, and interest by check payable in such money. The Company may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York, a
--------------------------
New York banking corporation (the "Trustee"), will act as Paying Agent and
-------
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Neither the Company nor any of its Subsidiaries
or Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture,
---------
date as of April 7, 2000 (the "Indenture"), by and between the Company and the
---------
Trustee. This Note is one of a duly authorized issue of Initial Notes of the
Company designated as its 10.25% Senior Subordinated Notes due 2010 (the
"Notes"). The Notes are limited in aggregate principal amount to $275,000,000.
-----
The Notes include the Initial Notes and the Exchange Notes (as defined below)
issued in exchange for the Initial Notes pursuant to the Indenture. The Initial
Notes and the Exchange Notes are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in
---
effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Notes are general unsecured
obligations of the Company.
5. Subordination. The Notes are unsecured obligations of the
-------------
Company and subordinated in right of payment, in the manner and to the extent
set forth in the Indenture, to the prior payment in full in cash of all Senior
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
A-3
<PAGE>
6. Redemption.
----------
(a) Optional Redemption. The Company may redeem the Notes, at its
-------------------
option, in whole at any time or in part from time to time, on and after April 1,
2005 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on April 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
Year Percentage
---- ----------
2005..................................... 105.125%
2006..................................... 103.417%
2007..................................... 101.708%
2008 and thereafter...................... 100.000%
(b) Optional Redemption Upon Equity Offerings. Notwithstanding the
-----------------------------------------
foregoing, the Company may redeem in the aggregate up to 35% of the original
principal amount of Notes at any time and from time to time prior to April 1,
2003 at a Redemption Price equal to 110.25% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest, if any, to the Redemption Date out
of the Net Proceeds of one or more Public Equity Offerings; provided that
(1) at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
(2) any such redemption occurs within 90 days following the closing
of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption under paragraphs 6(a)
--------------------
and (b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. The Indenture provides that, after certain
------------------
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement by and among the Company and the Initial Purchasers, the Company will
be obligated to consummate an exchange offer pursuant to which the Holder of
this Note shall have the right to exchange this Note for the Company's Series B
10.25% Senior Subordinated Notes due 2010 (the "Exchange Notes"), which have
--------------
been registered under the Securities Act, in like principal amount and having
terms identical in all material respects to the Initial Notes. The Holders of
the Initial Notes shall be entitled to receive certain Additional Interest
payments in the event such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.
A-4
<PAGE>
10. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples
thereof. A Holder shall register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
11. Persons Deemed Owners. The registered holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company upon written request. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
13. Legal Defeasance and Covenant Defeasance. If the Company at any
----------------------------------------
time deposits with the Trustee U.S. legal tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating to
defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. Amendments, Supplements, and Waivers. Subject to certain
------------------------------------
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder.
15. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Restricted Subsidiaries, sell assets, create liens, issue capital
stock, enter into sale and lease-back transactions, make certain Investments,
merge or consolidate with any other Person, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must report quarterly to the Trustee on compliance with such
limitations.
16. Successor Entity. When a successor entity assumes, in accordance
----------------
with the Indenture, all the obligations of its predecessor under the Notes and
the Indenture, and immediately before and thereafter no Default or Event of
Default exists and certain other conditions are satisfied, the predecessor
entity will be released from those obligations.
17. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
A-5
<PAGE>
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders.
18. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company, and may otherwise deal with the
Company, its Subsidiaries or their respective Affiliates as if it were not the
Trustee.
19. No Recourse Against Others. As more fully described in the
--------------------------
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
22. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: ST Acquisition Corp., c/o Laurel Hill
Capital Partners LLC, 2 Robbins Lane, Suite 201, Jericho, New York 11753,
Attention: Kathleen Marion.
A-6
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: ____________________ Signed:_________________________________________
(Sign exactly as your name appears
on the other side of this Note)
Medallion Guarantee: ___________________
A-7
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ __________________
Date:__________________ ______________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Medallion Guarantee:____________________
A-8
<PAGE>
EXHIBIT B
---------
CUSIP No.:
ST ACQUISITION CORP.
SERIES B 10.25% SENIOR SUBORDINATED NOTE DUE 2010
No. $
ST ACQUISITION CORP., a Texas corporation (the "Company," which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of [ ] DOLLARS on April 1, 2010.
Interest Payment Dates: April 1 and October 1, commencing October 1,
2000.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually by its duly authorized officers and a facsimile of its corporate seal
to be affixed hereto or imprinted hereon.
ST ACQUISITION CORP.
By: ____________________________
Name:
Title:
By: ___________________________
Name:
Title:
B-1
<PAGE>
Certificate of Authentication
This is one of the Series B 10.25% Senior Subordinated Notes due 2010
referred to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: ____________________________
Authorized Signatory
Date of Authentication:
B-2
<PAGE>
(REVERSE OF SECURITY)
10.25% SENIOR SUBORDINATED NOTE DUE 2010
1. Interest. ST ACQUISITION CORP., a Texas corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
-------
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
October 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on March 15 or September 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Company may pay principal, premium,
if any, and interest by check payable in such money. The Company may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York, a
--------------------------
New York banking corporation (the "Trustee"), will act as Paying Agent and
-------
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Neither the Company nor any of its Subsidiaries
or Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture, dated
---------
as of April 7, 2000 (the "Indenture"), by and between the Company and the
---------
Trustee. This Note is one of a duly authorized issue of Notes of the Company
designated as its Series B 10.25% Senior Subordinated Notes due 2010 (the
"Exchange Notes") issued in exchange for the initial 10.25% Senior Subordinated
--------------
Notes due 2010 (the "Initial Notes" and, together with the Exchange Notes, the
-------------
"Notes"). The Notes are limited in aggregate principal amount to $275,000,000.
-----
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of
---
the Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company.
5. Subordination. The Notes are unsecured obligations of the Company
-------------
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full in cash of all Senior
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
B-3
<PAGE>
6. Redemption.
----------
(a) Optional Redemption. The Company may redeem the Notes, at its
-------------------
option, in whole at any time or in part from time to time, on and after April 1,
2005 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on April 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
Year Percentage
---- ----------
2005................................................. 105.125%
2006................................................. 103.417%
2007................................................. 101.708%
2008 and thereafter.................................. 100.000%
(b) Optional Redemption Upon Equity Offerings. Notwithstanding the
-----------------------------------------
foregoing, the Company may redeem in the aggregate up to 35% of the original
principal amount of Notes at any time and from time to time prior to April 1,
2003 at a Redemption Price equal to 110.25% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest, if any, to the Redemption Date out
of the Net Proceeds of one or more Public Equity Offerings; provided that
(1) at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
(2) any such redemption occurs within 90 days following the closing
of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption under paragraphs 6(a)
--------------------
and (b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. The Indenture provides that, after certain
------------------
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples
thereof. A Holder shall register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
B-4
<PAGE>
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company upon written request. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
12. Legal Defeasance and Covenant Defeasance. If the Company at any
----------------------------------------
time deposits with the Trustee U.S. legal tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating to
defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. Amendments, Supplements, and Waivers. Subject to certain
------------------------------------
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Restricted Subsidiaries, sell assets, create liens, issue capital
stock, enter into sale and lease-back transactions, make certain Investments,
merge or consolidate with any other Person, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
15. Successor Entity. When a successor entity assumes, in accordance
----------------
with the Indenture, all the obligations of its predecessor under the Notes and
the Indenture, and immediately before and thereafter no Default or Event of
Default exists and certain other conditions are satisfied, the predecessor
entity will be released from those obligations.
16. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company, and may otherwise deal with the
Company, its Subsidiaries or their respective Affiliates as if it were not the
Trustee.
B-5
<PAGE>
18. No Recourse Against Others. As more fully described in the
--------------------------
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: ST Acquisition Corp., c/o Laurel Hill
Capital Partners LLC, 2 Robbins Lane, Suite 201, Jericho, New York 11753,
Attention: Kathleen Marion.
B-6
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:__________________ Signed:___________________________________________
(Sign exactly as your name appears on the other
side of this Note)
Medallion Guarantee:__________________________
B-7
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ __________________
Date:___________________ ________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular without
alteration or enlargement or any change whatsoever
and be guaranteed by the endorser's bank or broker.
Medallion Guarantee:___________________
B-8
<PAGE>
EXHIBIT C
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: ST ACQUISITION CORP. (the "Company")
-------
10.25% Senior Subordinated Notes due 2010 (the "Notes")
-------------------------------------------------------
This Certificate relates to $_______ principal amount of Notes held in
the form of* ___ a beneficial interest in a Global Note or* _______ Certificated
Notes by ______ (the "Transferor").
----------
The Transferor:
[_] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depository a
Certificated Note or Certificated Notes in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
[_] has requested by written order that the Registrar exchange or
register the transfer of a Certificated Note or Certificated Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "Securities Act"), because*:
--------------
[_] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
[_] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act) which delivers a certificate to the Trustee in the
form of Exhibit D to the Indenture.
---------
[_] Such Note is being transferred in reliance on Regulation S under
the Securities Act and a transfer certificate for Regulation S transfers in the
form of Exhibit E to the Indenture accompanies this certification. [An Opinion
---------
of Counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this certification.]
[_] Such Note is being transferred in reliance on Rule 144 under the
Securities Act. [An Opinion of Counsel to the effect that such transfer does
not require registration under the Securities Act accompanies this
certification.]
C-1
<PAGE>
[_] Such Note is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act other
than Rule 144A or Rule 144 under the Securities Act to a person other than an
institutional "accredited investor." [An Opinion of Counsel to the effect that
such transfer does not require registration under the Securities Act accompanies
this certification.]
_____________________________________
[INSERT NAME OF TRANSFEROR]
By:___________________________________
[Authorized Signatory]
Date:______________________
*Check applicable box.
C-2
<PAGE>
EXHIBIT D
---------
Form of Transferee Letter of Representation
-------------------------------------------
THE BANK OF NEW YORK
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 10.25% Senior Subordinated Notes due 2010 of ST
ACQUISITION CORP., (the "Company") and any guarantee thereof (the "Notes").
------- -----
Upon transfer, the Notes would be registered in the name of the new beneficial
owner as follows:
Name:_________________________________________
Address:______________________________________
Taxpayer ID Number:___________________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
----------
Act")) purchasing Notes for our own account or for the account of such an
- ---
institutional "accredited investor" and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and we invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
2. We acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary.
3. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes that we will not prior to the
date (the "Resale Restriction Termination Date") that is two years after the
-----------------------------------
later of the original issuance of the Notes and the last date on which the
Company or any affiliate of the Company was the owner of such Notes (or any
predecessor thereto) offer, sell or otherwise transfer such Notes except (a) to
the Company or any subsidiary of the Company, (b) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the
Securities Act (c) inside the United States to an "institutional accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee a signed letter substantially in the form of
this letter (d) outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act (e) pursuant to any other
available exemption from the registration requirements of the Securities Act or
(f) pursuant to an effective registration statement under the Securities Act.
We acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an opinion of counsel, certification and/or other information
satisfactory to the Company and the Trustee.
We understand that the Trustee will not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that
any Notes purchased by us will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
D-1
<PAGE>
substance of paragraph 3 of this letter. We further agree to provide to any
person acquiring any of the Notes from us a notice advising such person that
transfers of such Notes are restricted as stated herein and that certificates
representing such Notes will bear a legend to that effect.
We represent that the Company and the Trustee and others are entitled
to rely upon the truth and accuracy of our acknowledgments, representations and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgments, representations or agreements herein cease to be
accurate and complete. You are also irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States" and
"U.S. person" have the respective meanings given to them in Regulation S under
the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
Dated: __________ TRANSFEREE:
By:_____________________
D-2
<PAGE>
EXHIBIT E
---------
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
THE BANK OF NEW YORK
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: ST Acquisition Corp. 10.25% Senior
Subordinated Notes due 2010 (the "Notes")
-----------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
--------------
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
E-1
<PAGE>
By:__________________________
E-2
<PAGE>
EXHIBIT F
---------
FORM OF SUPPLEMENTAL INDENTURE
------------------------------
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
, among (the "New Guarantor"), a subsidiary of ST Acquisition Corp.
-------------
(or its successor), a Texas corporation (the "Company"), the Guarantors, if any
-------
(the "Existing Guarantors"), under the Indenture referred to below, and The Bank
-------------------
of New York, as trustee under the Indenture referred to below (the "Trustee").
-------
W I T N E S S E T H:
-------------------
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (as such may be amended from time to time, the
"Indenture"), dated as of April 7, 2000, providing for the issuance of its
10.25% Senior Subordinated Notes due 2010 (the "Notes");
WHEREAS Section 4.22 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all of the Company's obligations under
the Notes pursuant to a Guarantee on the terms and conditions set forth herein;
and
WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee, the
Company and Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders as follows:
1. Definitions. (a) Capitalized terms used herein without
-----------
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
----------------------
and severally with all other Guarantors, to Guarantee the Company's obligations
under the Notes on the terms and subject to the conditions set forth in Article
10 of the Indenture and to be bound by all other applicable provisions of the
Indenture. From and after the date hereof, the New Guarantor shall be a
Guarantor for all purposes under the Indenture and the Notes.
3. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
- ---------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
C-1
<PAGE>
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
5. Trustee Makes No Representation. The Trustee shall not be
-------------------------------
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which are made solely by the Company.
6. Multiple Counterparts. The parties may sign multiple
---------------------
counterparts of this Supplemental Indenture. Each signed counterpart shall be
deemed an original, but all of them together represent one and the same
agreement.
7. Headings. The headings of this Supplemental Indenture have been
--------
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
F-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date and year first above written.
[NEW GUARANTOR]
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
ST ACQUISITION CORP.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
F-3
<PAGE>
EXISTING GUARANTORS:
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:_________________________________
Name:
Title:
F-4
<PAGE>
EXHIBIT 4(B)
TNP ENTERPRISES, INC.,
as Issuer,
and
THE BANK OF NEW YORK,
as Trustee
___________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of April 7, 2000
to
INDENTURE
Dated as of April 7, 2000
between
ST ACQUISITION CORP.,
as Issuer,
and
THE BANK OF NEW YORK,
as Trustee
___________________
$275,000,000
10.25% Senior Subordinated Notes due 2010
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of April 7, 2000, by and
between TNP ENTERPRISES, INC., a Texas corporation, as issuer (the "Company"),
and The Bank of New York, as trustee (the "Trustee").
WHEREAS, ST Acquisition Corp., a Texas corporation ("Acquisition"),
has heretofore executed and delivered to the Trustee an Indenture dated as of
April 7, 2000 (the "Indenture"), providing for the issuance of its 10.25% Senior
Subordinated Notes due 2010 in the principal amount of $275,000,000 (the
"Securities"); and
WHEREAS, Acquisition has merged with and into the Company and, in
connection herewith, the Company has assumed by operation of law all of
Acquisition's debts, liabilities, duties and obligations, including
Acquisition's obligations in respect of the Securities and under the Indenture;
and
WHEREAS, the Company desires by this First Supplemental Indenture,
pursuant to and as contemplated by Sections 5.01 and 8.01 of the Indenture, to
expressly assume the covenants, agreements and undertakings of Acquisition in
the Indenture and under the Securities; and
WHEREAS, the execution and delivery of this First Supplemental
Indenture and the notes evidencing the Securities, substantially in the form
attached hereto as Exhibit A, have been authorized by a resolution of the Board
of Directors of the Company; and
WHEREAS, the Company authorizes the Trustee to cancel the 10.25 %
Senior Subordinated Notes due 2010 of Acquisition and to authenticate
$275,000,000 principal amount of 10.25% Senior Subordinated Notes due 2010 of
the Company in replacement thereof; and
WHEREAS, all conditions and requirements necessary to make each of
this First Supplemental Indenture and the Securities a valid, binding and legal
instrument in accordance with its terms upon the Company and the Trustee have
been performed and fulfilled by the applicable parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the applicable
parties hereto.
NOW, THEREFORE, in consideration of the above premises, each party
agrees, for the benefit of the others and for the equal and ratable benefit of
the Holders of the Securities, as follows:
<PAGE>
-2-
ARTICLE ONE
ASSUMPTION OF OBLIGATIONS
SECTION 1.01. Assumption of Obligations of Acquisition.
----------------------------------------
(a) The Company hereby expressly and unconditionally assumes each and
every covenant, agreement and undertaking of Acquisition in the Indenture as if
the Company had been the original issuer of the Securities, and also hereby
expressly and unconditionally assumes each and every covenant, agreement and
undertaking in each Security outstanding on the date of this First Supplemental
Indenture.
(b) Promptly following the execution and delivery of this First
Supplemental Indenture, the Trustee shall, upon the written order of the Company
in the form of an Officers' Certificate of the Company, authenticate and deliver
Securities substantially in the form of Exhibit A hereto in replacement of the
outstanding Securities.
SECTION 1.02. Exchange of Outstanding Securities; Exhibits.
--------------------------------------------
Exhibits A, B, C, D, E and F of the Indenture are hereby deleted and
replaced in their entirety by Exhibits A, B, C, D, E and F, respectively,
hereto.
ARTICLE TWO
MISCELLANEOUS PROVISIONS
SECTION 2.01. Terms Defined.
-------------
For all purposes of this First Supplemental Indenture, except as
otherwise defined or unless the context otherwise requires, terms used in
capitalized form in this First Supplemental Indenture and defined in the
Indenture have the meanings specified in the Indenture.
SECTION 2.02. Indenture.
---------
Except as amended hereby, the Indenture and the Securities are in all
respects ratified and confirmed and all the terms shall remain in full force and
effect.
<PAGE>
-3-
SECTION 2.03. Governing Law.
-------------
THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
SECTION 2.04. Successors.
----------
All agreements of the Company in this First Supplemental Indenture and
the Securities shall bind its successors. All agreements of the Trustee in this
First Supplemental Indenture shall bind its successors.
SECTION 2.05. Duplicate Originals.
-------------------
The parties may sign any number of copies of this First Supplemental
Indenture. Each signed copy shall be an original, but all of them together
shall represent the same agreement.
SECTION 2.06. Trustee Disclaimer.
------------------
The Trustee accepts the amendment of the Indenture effected by this
First Supplemental Indenture and agrees to execute the trust created by the
Indenture as hereby amended, but only upon the terms and conditions set forth in
the Indenture, including the terms and provisions defining and limiting the
liabilities and responsibilities of the Trustee, which terms and provisions
shall in like manner define and limit its liabilities and responsibilities in
the performance of the trust created by the Indenture as hereby amended and,
without limiting the generality of the foregoing, the Trustee shall not be
responsible in any manner whatsoever for or with respect to any of the recitals
or statements contained herein, all of which recitals or statements are made
solely by the Company, or for or with respect to (i) the validity of the terms
of this First Supplemental Indenture or any of the terms or provisions hereof,
(ii) the proper authorization hereof by the Company by corporate action or
otherwise, (iii) the due execution hereof by the Company or (iv) the
consequences (direct or indirect and whether deliberate or inadvertent) of any
amendment herein provided for, and the Trustee makes no representation with
respect to any such matters.
[Signature Page Follows]
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first written above.
TNP ENTERPRISES, INC.,
as issuer
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK,
as trustee
By: ____________________________
Name:
Title:
<PAGE>
EXHIBIT A
---------
CUSIP No.:
TNP ENTERPRISES, INC.
10.25% SENIOR SUBORDINATED NOTE DUE 2010
No. $
TNP ENTERPRISES, INC., a Texas corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of [ ]
DOLLARS on April 1, 2010.
Interest Payment Dates: April 1 and October 1, commencing October 1,
2000.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually by its duly authorized officers and a facsimile of its corporate seal
to be affixed hereto or imprinted hereon.
TNP ENTERPRISES, INC.
By: ______________________
Name:
Title:
By: ______________________
Name:
Title:
A-1
<PAGE>
Certificate of Authentication
This is one of the 10.25% Senior Subordinated Notes due 2010 referred
to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: ____________________________
Authorized Signatory
Date of Authentication:
A-2
<PAGE>
(REVERSE OF SECURITY)
10.25% SENIOR SUBORDINATED NOTE DUE 2010
1. Interest. TNP ENTERPRISES, INC., a Texas corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
- --------
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
October 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on March 15 or September 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Company may pay principal, premium,
if any, and interest by check payable in such money. The Company may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York, a New
-------------------------
York banking corporation (the "Trustee"), will act as Paying Agent and
-------
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Neither the Company nor any of its Subsidiaries
or Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture, dated
---------
as of April 7, 2000 (the "Indenture"), by and between the Company and the
---------
Trustee. This Note is one of a duly authorized issue of Initial Notes of the
Company designated as its 10.25% Senior Subordinated Notes due 2010 (the
"Notes"). The Notes are limited in aggregate principal amount to $275,000,000.
-----
The Notes include the Initial Notes and the Exchange Notes (as defined below)
issued in exchange for the Initial Notes pursuant to the Indenture. The Initial
Notes and the Exchange Notes are treated as a single class of securities under
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined
A-3
<PAGE>
herein. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company.
5. Subordination. The Notes are unsecured obligations of the Company
-------------
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full in cash of all Senior
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption.
----------
(a) Optional Redemption. The Company may redeem the Notes, at its
-------------------
option, in whole at any time or in part from time to time, on and after April 1,
2005 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on April 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
Year Percentage
---- ----------
2005.................................... 105.125%
2006.................................... 103.417%
2007.................................... 101.708%
2008 and thereafter..................... 100.000%
(b) Optional Redemption Upon Equity Offerings. Notwithstanding the
-----------------------------------------
foregoing, the Company may redeem in the aggregate up to 35% of the original
principal amount of Notes at any time and from time to time prior to April 1,
2003 at a Redemption Price equal to 110.25% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest, if any, to the Redemption Date out
of the Net Proceeds of one or more Public Equity Offerings; provided that
(1) at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
(2) any such redemption occurs within 90 days following the closing
of any such Public Equity Offering.
A-4
<PAGE>
7. Notice of Redemption. Notice of redemption under paragraphs 6(a)
--------------------
and (b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. The Indenture provides that, after certain
------------------
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
-------------------
Agreement by and among the Company and the Initial Purchasers, the Company will
be obligated to consummate an exchange offer pursuant to which the Holder of
this Note shall have the right to exchange this Note for the Company's Series B
10.25% Senior Subordinated Notes due 2010 (the "Exchange Notes"), which have
--------------
been registered under the Securities Act, in like principal amount and having
terms identical in all material respects to the Initial Notes. The Holders of
the Initial Notes shall be entitled to receive certain Additional Interest
payments in the event such exchange offer is not consummated and upon certain
other conditions, all pursuant to and in accordance with the terms of the
Registration Rights Agreement.
10. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples
thereof. A Holder shall register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
11. Persons Deemed Owners. The registered holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company upon written request. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
A-5
<PAGE>
13. Legal Defeasance and Covenant Defeasance. If the Company at any
----------------------------------------
time deposits with the Trustee U.S. legal tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating to
defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. Amendments, Supplements, and Waivers. Subject to certain
------------------------------------
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Notes in addition to or in place of certificated Notes or make any other change
that does not adversely affect in any material respect the rights of any Holder.
15. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Restricted Subsidiaries, sell assets, create liens, issue capital
stock, enter into sale and lease-back transactions, make certain Investments,
merge or consolidate with any other Person, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must quarterly report to the Trustee on compliance with such
limitations.
16. Successor Entity. When a successor entity assumes, in accordance
----------------
with the Indenture, all the obligations of its predecessor under the Notes and
the Indenture, and immediately before and thereafter no Default or Event of
Default exists and certain other conditions are satisfied, the predecessor
entity will be released from those obligations.
17. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
A-6
<PAGE>
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders.
18. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company, and may otherwise deal with the
Company, its Subsidiaries or their respective Affiliates as if it were not the
Trustee.
19. No Recourse Against Others. As more fully described in the
--------------------------
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
22. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
A-7
<PAGE>
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: TNP Enterprises, Inc., c/o Laurel Hill
Capital Partners LLC, 2 Robbins Lane, Suite 201, Jericho, New York 11753,
Attention: Kathleen Marion.
A-8
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:____________________ Signed: ____________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Medallion Guarantee: _____________________________
A-9
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ _____________
Date:__________________
________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular without
alteration or enlargement or any change whatsoever
and be guaranteed by the endorser's bank or broker.
Medallion Guarantee:_____________________
A-10
<PAGE>
EXHIBIT B
---------
CUSIP No.:
TNP ENTERPRISES, INC.
SERIES B 10.25% SENIOR SUBORDINATED NOTE DUE 2010
No. $
TNP ENTERPRISES, INC., a Texas corporation (the "Company," which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of [ ] DOLLARS on April 1, 2010.
Interest Payment Dates: April 1 and October 1, commencing October 1,
2000.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually by its duly authorized officers and a facsimile of its corporate seal
to be affixed hereto or imprinted hereon.
TNP ENTERPRISES, INC.
By: _______________________
Name:
Title:
By: _______________________
Name:
Title:
B-1
<PAGE>
Certificate of Authentication
This is one of the Series B 10.25% Senior Subordinated Notes due 2010
referred to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By: __________________________
Authorized Signatory
Date of Authentication:
B-2
<PAGE>
(REVERSE OF SECURITY)
10.25% SENIOR SUBORDINATED NOTE DUE 2010
1. Interest. TNP ENTERPRISES, INC., a Texas corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
-------
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing
October 1, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on March 15 or September 15 immediately preceding the Interest
Payment Date (whether or not such day is a Business Day) even if the Notes are
cancelled on registration of transfer or registration of exchange after such
Record Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. Payments of principal and premium, if any, will be made (on
presentation of such Notes if in certificated form) in money of the United
States that at the time of payment is legal tender for payment of public and
private debts; provided, however, that the Company may pay principal, premium,
if any, and interest by check payable in such money. The Company may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, The Bank of New York, a
--------------------------
New York banking corporation (the "Trustee"), will act as Paying Agent and
-------
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. Neither the Company nor any of its Subsidiaries
or Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.
4. Indenture. The Company issued this Note under an Indenture, dated
---------
as of April 7, 2000 (the "Indenture"), by and between the Company and the
---------
Trustee. This Note is one of a duly authorized issue of Notes of the Company
designated as its Series B 10.25% Senior Subordinated Notes due 2010 (the
"Exchange Notes") issued in exchange for the initial 10.25% Senior Subordinated
--------------
Notes due 2010 (the "Initial Notes" and, together with the Exchange Notes, the
-------------
"Notes"). The Notes are limited in aggregate principal amount to $275,000,000.
-----
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made
B-3
<PAGE>
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
---
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of them. The Notes are general unsecured obligations of the
Company.
5. Subordination. The Notes are unsecured obligations of the Company
-------------
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full in cash of all Senior
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Redemption.
----------
(a) Optional Redemption. The Company may redeem the Notes, at its
-------------------
option, in whole at any time or in part from time to time, on and after April 1,
2005 at the following Redemption Prices (expressed as percentages of the
principal amount thereof) if redeemed during the twelve-month period commencing
on April 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
Year Percentage
---- ----------
2005................................... 105.125%
2006................................... 103.417%
2007................................... 101.708%
2008 and thereafter.................... 100.000%
(b) Optional Redemption Upon Equity Offerings. Notwithstanding the
-----------------------------------------
foregoing, the Company may redeem in the aggregate up to 35% of the original
principal amount of Notes at any time and from time to time prior to April 1,
2003 at a Redemption Price equal to 110.25% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest, if any, to the Redemption Date out
of the Net Proceeds of one or more Public Equity Offerings; provided that
(1) at least 65% of the principal amount of Notes originally issued
remains outstanding immediately after the occurrence of any such redemption and
(2) any such redemption occurs within 90 days following the closing of
any such Public Equity Offering.
B-4
<PAGE>
7. Notice of Redemption. Notice of redemption under paragraphs 6(a)
--------------------
and (b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder to be redeemed at such Holder's
registered address.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
8. Offers to Purchase. The Indenture provides that, after certain
------------------
Asset Sales (as defined in the Indenture) and upon the occurrence of a Change of
Control (as defined in the Indenture), and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples
thereof. A Holder shall register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
10. Persons Deemed Owners. The registered holder of a Note shall 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 and the Paying Agent will
pay the money back to the Company upon written request. After that, Holders
entitled to money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another person.
12. Legal Defeasance and Covenant Defeasance. If the Company at any
----------------------------------------
time deposits with the Trustee U.S. legal tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating to
defeasance, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. Amendments, Supplements, and Waivers. Subject to certain
------------------------------------
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of
B-5
<PAGE>
the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or make any other change that does not adversely affect in
any material respect the rights of any Holder.
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Restricted Subsidiaries, sell assets, create liens, issue capital
stock, enter into sale and lease-back transactions, make certain Investments,
merge or consolidate with any other Person, or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its assets. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
15. Successor Entity. When a successor entity assumes, in accordance
----------------
with the Indenture, all the obligations of its predecessor under the Notes and
the Indenture, and immediately before and thereafter no Default or Event of
Default exists and certain other conditions are satisfied, the predecessor
entity will be released from those obligations.
16. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. If an Event of Default (other than an Event of Default pursuant to
Section 6.01(f) or (g) of the Indenture) shall have occurred and be continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding, may declare to be immediately due and
payable the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes may rescind and annul such acceleration and its
consequences if all existing Events of Default, other than the nonpayment of
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto. In case an Event of
Default specified in Section 6.01(f) or (g) of the Indenture occurs, such
principal amount, together with premium, if any, and interest with respect to
all of the Notes, shall be due and payable immediately without any declaration
or other act on the part of the Trustee or the Holders.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may make loans to, accept deposits
from, and perform
B-6
<PAGE>
services for the Company, and may otherwise deal with the Company, its
Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. As more fully described in the
--------------------------
Indenture, no director, officer, employee, stockholder or incorporator, as such,
of the Company shall have any liability for any obligation of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: TNP Enterprises, Inc., c/o Laurel Hill
Capital Partners LLC, 2 Robbins Lane, Suite 201, Jericho, New York 11753,
Attention: Kathleen Marion.
B-7
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: __________________ Signed: ___________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Medallion Guarantee: _____________________
B-8
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.13 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.13 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.13 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$ __________________
Date: __________________
_______________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular without
alteration or enlargement or any change whatsoever
and be guaranteed by the endorser's bank or broker.
Medallion Guarantee: _____________________
B-9
<PAGE>
EXHIBIT C
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: TNP ENTERPRISES, INC. (the "Company")
-------
10.25% Senior Subordinated Notes due 2010 (the "Notes")
-------------------------------------------------------
This Certificate relates to $_______ principal amount of Notes held in
the form of* ___ a beneficial interest in a Global Note or* _______ Certificated
Notes by ______ (the "Transferor").
----------
The Transferor:
[_] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depository a
Certificated Note or Certificated Notes in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Note (or the portion thereof indicated above); or
[_] has requested by written order that the Registrar exchange or
register the transfer of a Certificated Note or Certificated Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "Securities Act"), because*:
--------------
[_] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), in reliance on Rule
144A.
[_] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act) which delivers a certificate to the Trustee in the
form of Exhibit D to the Indenture.
---------
[_] Such Note is being transferred in reliance on Regulation S under
the Securities Act and a transfer certificate for Regulation S transfers in the
form of Exhibit E to the Indenture accompanies this certification. [An Opinion
---------
of Counsel to the effect that such transfer does not require registration under
the Securities Act accompanies this certification.]
[_] Such Note is being transferred in reliance on Rule 144 under the
Securities Act. [An Opinion of Counsel to the effect that such transfer does
not require registration under the Securities Act accompanies this
certification.]
C-1
<PAGE>
[_] Such Note is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act other
than Rule 144A or Rule 144 under the Securities Act to a person other than an
institutional "accredited investor." [An Opinion of Counsel to the effect that
such transfer does not require registration under the Securities Act accompanies
this certification.]
_________________________________
[INSERT NAME OF TRANSFEROR]
By: ____________________________
[Authorized Signatory]
Date: _________________
*Check applicable box.
C-2
<PAGE>
EXHIBIT D
---------
Form of Transferee Letter of Representation
THE BANK OF NEW YORK
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 10.25% Senior Subordinated Notes due 2010 of TNP
ENTERPRISES, INC., (the "Company") and any guarantee thereof (the "Notes").
------- -----
Upon transfer, the Notes would be registered in the name of the new beneficial
owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
----------
Act")) purchasing Notes for our own account or for the account of such an
- ---
institutional "accredited investor" and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and we invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
2. We acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary.
3. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes that we will not prior to the
date (the "Resale Restriction Termination Date") that is two years after the
-----------------------------------
later of the original issuance of the Notes and the last date on which the
Company or any affiliate of the Company was the owner of such Notes (or any
predecessor thereto) offer, sell or otherwise transfer such Notes except (a) to
the Company or any subsidiary of the Company, (b) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the
Securities Act (c) inside the United States to an "institutional accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
D-1
<PAGE>
Act that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee a signed letter substantially in the form of
this letter (d) outside the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act (e) pursuant to any other
available exemption from the registration requirements of the Securities Act or
(f) pursuant to an effective registration statement under the Securities Act.
We acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the applicable Notes pursuant to clause (c) or (e) above to require the
delivery of an opinion of counsel, certification and/or other information
satisfactory to the Company and the Trustee.
We understand that the Trustee will not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that
any Notes purchased by us will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
substance of paragraph 3 of this letter. We further agree to provide to any
person acquiring any of the Notes from us a notice advising such person that
transfers of such Notes are restricted as stated herein and that certificates
representing such Notes will bear a legend to that effect.
We represent that the Company and the Trustee and others are entitled
to rely upon the truth and accuracy of our acknowledgments, representations and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgments, representations or agreements herein cease to be
accurate and complete. You are also irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States" and
"U.S. person" have the respective meanings given to them in Regulation S under
the Securities Act.
D-2
<PAGE>
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
Dated: __________ TRANSFEREE:
By:_____________________
D-3
<PAGE>
EXHIBIT E
---------
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
THE BANK OF NEW YORK
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: TNP Enterprises, Inc. 10.25% Senior
Subordinated Notes due 2010 (the "Notes")
-----------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
--------------
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
E-1
<PAGE>
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________
E-2
<PAGE>
EXHIBIT F
---------
FORM OF SUPPLEMENTAL INDENTURE
------------------------------
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of,
among (the "New Guarantor"), a subsidiary of TNP Enterprises, Inc. (or its
-------------
successor), a Texas corporation (the "Company"), the Guarantors, if any (the
-------
"Existing Guarantors"), under the Indenture referred to below, and The Bank
-------------------
of New York, as trustee under the Indenture referred to below (the "Trustee").
-------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (as such may be amended from time to time, the
"Indenture"), dated as of April 7, 2000, providing for the issuance of its
10.25% Senior Subordinated Notes due 2010 (the "Notes");
WHEREAS Section 4.22 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all of the Company's obligations under
the Notes pursuant to a Guarantee on the terms and conditions set forth herein;
and
WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee, the
Company and Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders as follows:
1. Definitions. (a) Capitalized terms used herein without
-----------
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
C-3
<PAGE>
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
----------------------
and severally with all other Guarantors, to Guarantee the Company's obligations
under the Notes on the terms and subject to the conditions set forth in Article
10 of the Indenture and to be bound by all other applicable provisions of the
Indenture. From and after the date hereof, the New Guarantor shall be a
Guarantor for all purposes under the Indenture and the Notes.
3. Ratification of Indenture; Supplemental Indentures Part of
----------------------------------------------------------
Indenture. Except as expressly amended hereby, the Indenture is in all respects
- ---------
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder heretofore or hereafter
authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
5. Trustee Makes No Representation. The Trustee shall not be
-------------------------------
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which are made solely by the Company.
6. Multiple Counterparts. The parties may sign multiple
---------------------
counterparts of this Supplemental Indenture. Each signed counterpart shall be
deemed an original, but all of them together represent one and the same
agreement.
7. Headings. The headings of this Supplemental Indenture have been
--------
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
F-4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date and year first above written.
[NEW GUARANTOR]
By:______________________
Name:
Title:
By:______________________
Name:
Title:
TNP ENTERPRISES, INC.
By:______________________
Name:
Title:
By:______________________
Name:
Title:
F-5
<PAGE>
EXISTING GUARANTORS:
By:______________________
Name:
Title:
By:______________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:______________________
Name:
Title:
F-6
