<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
Form 10-Q
----------------
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-12954
----------------
CADMUS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1274108
(I.R.S. Employer
(State or other jurisdiction of Identification Number)
incorporation or organization)
6620 West Broad Street, Suite 240
Richmond, Virginia 23230
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code:
(804) 287-5680
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1999.
<TABLE>
<CAPTION>
Outstanding at
Class April 30, 1999
----- --------------
<S> <C>
Common Stock, $.50 Par Value................................ 9,007,848
</TABLE>
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<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<C> <C> <S> <C>
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets--March 31, 1999
(unaudited) and June 30, 1998........................ 3
Condensed Consolidated Statements of Income
(unaudited)--Three and Nine Month Periods Ended March
31, 1999 and 1998.................................... 4
Condensed Consolidated Statements of Cash Flows
(unaudited)--Nine Month Period Ended March 31, 1999
and 1998............................................. 5
Notes to Condensed Consolidated Financial Statements
(unaudited).......................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 9
Item 3. Quantitative and Qualitative Disclosures about Market
Risk................................................. 15
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds............ 16
Item 6. Exhibits and Reports on Form 8K...................... 16
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
March 31, June 30,
1999 1998
----------- --------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................... $ 281 $ --
Accounts receivable, less allowance for doubtful
accounts............................................... 65,454 70,571
Inventories............................................. 27,978 25,610
Deferred income taxes................................... 5,210 3,832
Prepaid expenses and other.............................. 3,892 4,107
-------- --------
Total current assets.................................. 102,815 104,120
Property, plant, and equipment (net of accumulated
depreciation of $111,896 at March 31, 1999, and $107,269
at June 30, 1998)........................................ 126,907 133,836
Goodwill and other intangibles, net....................... 50,646 48,158
Other assets.............................................. 4,861 5,638
-------- --------
TOTAL ASSETS.............................................. $285,229 $291,752
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings................................... $ 12,170 $ 2,100
Current maturities of long-term debt.................... 6,089 6,431
Accounts payable........................................ 35,577 41,981
Accrued expenses........................................ 20,202 18,293
Restructuring reserve................................... 1,136 4,378
-------- --------
Total current liabilities............................. 75,174 73,183
Long-term debt, less current maturities................... 65,214 93,224
Other long-term liabilities............................... 10,510 8,867
Deferred income taxes..................................... 13,788 6,662
Shareholders' equity:
Common stock ($.50 par value; authorized shares--
16,000,000 shares; issued and outstanding shares--
7,846,000 at March 31, 1999, and 7,921,000 at June 30,
1998) ................................................. 3,923 3,961
Capital in excess of par value.......................... 52,292 53,532
Retained earnings....................................... 64,328 52,323
-------- --------
Total shareholders' equity............................ 120,543 109,816
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................ $285,229 $291,752
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months Ended
Ended March 31, March 31,
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales................................ $100,001 $101,234 $308,596 $289,644
-------- -------- -------- --------
Operating expenses:
Cost of sales.......................... 80,595 77,512 246,994 223,706
Selling and administrative............. 14,073 16,207 42,221 45,933
Net gain on divestitures............... (9,521) -- (9,521) --
-------- -------- -------- --------
85,147 93,719 279,694 269,639
-------- -------- -------- --------
Operating income......................... 14,854 7,515 28,902 20,005
-------- -------- -------- --------
Interest and other expenses:
Interest............................... 1,878 1,771 6,085 5,564
Other, net............................. 737 419 1,387 1,060
-------- -------- -------- --------
2,615 2,190 7,472 6,624
-------- -------- -------- --------
Income before income taxes............... 12,239 5,325 21,430 13,381
Income taxes............................. 4,712 2,050 8,251 5,152
-------- -------- -------- --------
Net income............................... $ 7,527 $ 3,275 $ 13,179 $ 8,229
======== ======== ======== ========
Earnings per share--basic:
Net income per share................... $ .96 $ .42 $ 1.67 $ 1.05
======== ======== ======== ========
Weighted-average common shares out-
standing.............................. 7,835 7,859 7,872 7,841
======== ======== ======== ========
Earnings per share--diluted:
Net income per share................... $ .94 $ .40 $ 1.63 $ 1.01
======== ======== ======== ========
Weighted-average common shares out-
standing.............................. 7,968 8,176 8,073 8,140
======== ======== ======== ========
Cash dividends per common share.......... $ .05 $ .05 $ .15 $ .15
======== ======== ======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Operating Activities
Net income................................................ $ 13,179 $ 8,229
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 14,326 13,608
Net gain on divestitures................................ (9,521) --
Other, net.............................................. 6,461 3,152
-------- --------
24,445 24,989
-------- --------
Changes in assets and liabilities, excluding debt and
effects of acquisitions and dispositions:
Accounts receivable, net................................ (4,523) 655
Inventories............................................. (4,846) (4,555)
Accounts payable and accrued expenses................... (8,928) 11,511
Restructuring reserve (due to cash payments)............ (1,236) (3,648)
Other current assets and liabilities.................... (142) 115
Other long-term liabilities (due to pension plan
payments).............................................. -- (1,148)
Other, net.............................................. (1,252) (668)
-------- --------
(20,927) 2,262
-------- --------
Net cash provided by operating activities................. 3,518 27,251
-------- --------
Investing Activities
Purchases of property, plant and equipment................ (12,340) (28,582)
Proceeds from sale of property, plant and equipment....... 962 4,557
Payments for business acquired............................ (5,192) --
Proceeds from divested businesses......................... 34,971 --
Other, net................................................ (295) --
-------- --------
Net cash provided by (used in) investing activities....... 18,106 (24,025)
-------- --------
Financing Activities
Proceeds from short-term borrowings....................... 10,070 3,445
Repayment of long-term revolving credit facility.......... (23,500) (2,500)
Repayment of long-term borrowings......................... (4,852) (3,423)
Dividends paid............................................ (1,183) (1,176)
Repurchase and retirement of common stock................. (3,864) (118)
Issuance of stock......................................... 1,986 --
Proceeds from exercise of stock options................... -- 581
-------- --------
Net cash used in financing activities .................... (21,343) (3,191)
-------- --------
Increase in cash and cash equivalents..................... 281 35
Cash and cash equivalents at beginning of period.......... -- 184
-------- --------
Cash and cash equivalents at end of period................ $ 281 $ 219
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited condensed consolidated financial statements of
Cadmus Communications Corporation and Subsidiaries have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting, and with applicable quarterly reporting regulations of the
Securities and Exchange Commission. They do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements and, accordingly, should be read in conjunction
with the consolidated financial statements and related footnotes included in
the Company's annual report on Form 10-K for the fiscal year ended June 30,
1998.
In the opinion of management, all adjustments (consisting of only normal
recurring adjustments) considered necessary for a fair presentation of interim
financial information have been included. The results of operations for the
period ended March 31, 1999, are not necessarily indicative of results for the
entire fiscal year.
2. Basic earnings per share is computed on the basis of weighted-average
common shares outstanding from the date of issue. Diluted earnings per share
is computed on the basis of weighted-average common shares outstanding plus
common shares contingently issuable upon exercise of dilutive stock options.
Incremental shares for dilutive stock options, computed under the treasury
stock method, were 133,000 and 317,000 for the quarters ended March 31, 1999
and 1998, respectively.
3. In August 1998, the Board of Directors approved an extension to August
31, 1999, of its fiscal 1997 stock repurchase plan. Under the plan, the
Company is authorized to repurchase up to 750,000 shares of its common stock.
As of March 31, 1999, approximately 297,000 shares have been repurchased under
this plan, including approximately 202,000 shares repurchased during fiscal
1999.
4. Components of inventories at March 31, 1999, and June 30, 1998, were as
follows (in thousands):
<TABLE>
<CAPTION>
March 31, June 30,
1999 1998
--------- --------
<S> <C> <C>
Raw materials and supplies................................ $ 5,967 $ 4,841
Work in process:
Materials............................................... 9,974 6,567
Other manufacturing costs............................... 9,168 11,331
Finished Goods............................................ 2,869 2,871
------- -------
Inventories............................................... $27,978 $25,610
======= =======
</TABLE>
5. On March 1, 1999, the Company consummated the sale of certain assets and
liabilities related to the Company's Financial Communications ("CFC") product
line. Pursuant to the terms of the Asset Purchase Agreement dated February 20,
1999, between the Company and R.R. Donnelley & Sons Company, the Company sold
certain of the assets and was relieved of certain of the liabilities which
were employed by the Company in operating CFC. The assets sold were specific
to CFC's business of marketing, selling and distribution of financial printing
services, mutual fund printing services, shareholder communications printing
services, and activities related thereto.
The Company recorded a gain on the sale of CFC of approximately $12.3
million ($7.5 million or $.94 per diluted share, after taxes). The initial
purchase price for the business was $35 million in cash. The net book value of
CFC was approximately $14.4 million. In connection with the sale, the Company
recorded liabilities for certain purchase price adjustments (approximately
$1.9 million), severance payments, and other transaction costs and recorded
impairments of certain long lived assets as a result of the sale ($2.3
million).
6
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The purchase price was established through arms-length negotiations among
the parties. The funds received in the sale were used to pay down debt.
6. On February 26, 1999, the Company completed the sale of its Custom
Publishing product line ("Custom") to Pohly & Partners, Inc. The sales price
was approximately $2.1 million comprised of cash and a note. The Company
recorded a loss on the sale of approximately $2.8 million (approximately $1.7
million or $.22 per share, after taxes).
7. On April 1, 1999, the Company consummated the purchase of all of the
outstanding stock of Melham Holdings, Inc. ("Melham"), a Delaware corporation.
The purchase was pursuant to the terms of a Stock Purchase Agreement dated
April 1, 1999, (the "Melham Agreement"), by and among Cadmus Communications
Corporation, Melham U.S. Inc., Purico (IOM) Limited, and Paul F. Mack.
Immediately prior to consummation of the transactions contemplated by the
Melham Agreement, Melham U.S. Inc., Purico (IOM) Limited, and Paul F. Mack
(collectively the "Sellers") owned 100% of Melham Holdings Inc.
The principal operating subsidiary of Melham is Mack Printing Company
("Mack"), a full-service printer that produces a wide variety of short-to
medium-run magazines and journals generally for customers in the mid-Atlantic
and northeast regions of the United States. Melham indirectly owns 100% of
Mack through Melham, Inc., a Delaware corporation. In connection with the
consummation of the transactions contemplated by the Melham Agreement, Mack
repurchased approximately 15% of its then-outstanding equity securities from
other securityholders and repaid certain indebtedness to such securityholders.
The purchase price was approximately $201 million and consisted of the
following: $70.0 million in bridge financing notes issued to the Sellers,
$40.0 million in bridge financing notes issued to affiliates of J. P. Morgan
and First Union National Bank, approximately $66 million in cash,
approximately $6.4 million of newly issued junior subordinated notes of the
Company and approximately 1.2 million shares of the Company's common stock
(valued at approximately $18.6 million). The Company expects to repay in full
$110 million in bridge financing notes with the proceeds of $125 million of
senior subordinated notes that the Company plans to issue in its fiscal fourth
quarter. The senior subordinated notes are anticipated to have a 10 year term.
In order to satisfy a condition to closing under the Melham Agreement, the
Company elected Mr. Nathu R. Puri, a majority shareholder of Melham U.S. Inc.
and Purico (IOM) Limited, to the Board of Directors of the Company to serve
until the next annual meeting of shareholders of the Company.
The purchase price was established through arms-length negotiations among
the parties.
The facilities of Mack include its headquarters in Easton, Pennsylvania with
manufacturing facilities located in Easton, Ephrata, and East Stroudsburg,
Pennsylvania, and Baltimore, Maryland. The Company intends to continue to use
these facilities for the same or similar purposes.
8. On April 1, 1999, the Company entered into a new $200 million senior
credit facility ("senior credit facility") with various banks and financial
institutions, including Wachovia Bank, N. A., NationsBank, N. A., and First
Union National Bank. The senior facility consists of a $145 million, five-year
revolving credit facility and a $55 million, five-year amortizing term loan
facility.
The proceeds of the loans under the senior credit facility have been and
will be used (1) to refinance indebtedness under the former senior credit
facility and certain other indebtedness, (2) to finance a portion of the
Melham acquisition and related transaction expenses, (3) to finance permitted
acquisitions and (4) for general corporate purposes, including working
capital.
7
<PAGE>
CADMUS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The senior credit facility is jointly and severally guaranteed by each of
the Company's present and future significant subsidiaries and is secured by a
pledge of all of the capital stock of present and future significant
subsidiaries.
The revolving credit facility under the senior credit facility will
terminate on March 31, 2004. The term loan facility under the senior credit
facility will be amortized in quarterly installments beginning June 30, 1999
and will also mature on March 31, 2004.
Interest on the senior credit facility will be a function of LIBOR. The
senior credit facility requires the Company to pay unused commitment fees with
respect to the revolving credit facility. The unused commitment fee for an
initial period of approximately seven and one-half months is 0.50%.
Thereafter, the unused commitment fee will be determined by reference to total
debt to EBITDA ratio as it exists from time to time.
The senior credit facility contains certain covenants regarding debt to
EBITDA (as defined), fixed charged coverage and net worth, and contains other
restrictions including limitations on additional borrowings, and the
acquisition, disposition and securitization of assets.
9. On April 1, 1998, the Company acquired Germersheim, Inc., an Atlanta-
based national point of purchase marketing service provider, for $13.7
million. Of $11 million in cash payments made during fiscal 1998, $2 million
were held in escrow at June 30, 1998, as contingent consideration only to be
released if specified performance levels are met during each of the next two
years. On August 31, 1998, the Company, the seller and the Escrow Agent
amended certain terms and conditions of the purchase and escrow agreements
related to this acquisition. Pursuant to these amendments, the Company issued,
in the name of the seller, 93,500 shares of the Company's common stock, at an
aggregate market value of $2 million, and delivered these shares to the Escrow
Agent in exchange for the $2 million of cash held in escrow. These "Escrow
Shares" are subject to certain terms and restrictions, as outlined in the
amended purchase and escrow agreements, and are held in escrow as of March 31,
1999, as contingent consideration, to be released only if specified
performance levels are met during each of the next two years.
10. During the fourth quarter of fiscal 1998, the Company recorded a one-
time restructuring charge of $4.0 million ($2.5 million net of tax) related to
the integration of Germersheim, Inc. with its existing point of purchase
operations. The charge included costs to consolidate facilities, eliminate
duplicate assets and provide severance costs. These actions were initiated in
fiscal 1998 and are substantially complete. The restructuring reserve balance
remaining at March 31, 1999, totaled $0.9 million, and relates to lease
termination costs and excess rent payments. Management believes that the
remaining restructuring reserve is adequate to complete the restructuring
plan.
During the fourth quarter of fiscal 1997, the Company adopted a
restructuring plan that impacted a number of its operations. The plan included
the closure of certain facilities; realignment of certain management,
production and administrative personnel; write-down of certain tangible and
intangible assets; and exiting certain nonstrategic customer relationships and
product lines. All restructuring actions were taken by the end of fiscal 1998.
The restructuring reserve balance remaining at March 31, 1999, totaled $0.3
million, and relates primarily to continuing excess rent and lease termination
costs related to the restructuring. Management believes the remaining
restructuring reserve is adequate to cover such costs.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
Cadmus Communications Corporation is a leading printer and producer of
scientific, technical and medical (STM) journals, special interest magazines,
point-of-purchase materials and specialty packaging materials. The Company is
organized around two business sectors: Professional Communications, serving
customers that publish information, and Marketing Communications, serving
customers who convey marketing messages. In the third quarter of its fiscal
year 1999, Cadmus divested its Financial Communications and Custom Publishing
businesses.
Organizational Structure
Our current organizational structure was effected during fiscal 1997 when we
announced a major restructuring plan. The plan enabled us to exit or reshape
our businesses that were not performing or were not core to our strategy, and
to create a more efficient and cost effective organizational structure. In
conjunction with the restructuring, we reorganized our organizational and
operational structure to form two sectors: Cadmus Professional Communications
and Cadmus Marketing Communications. Our previous organizational structure
consisted of the Periodicals, Graphic Communications, Marketing, and
Publishing groups.
r Cadmus Professional Communications provides a full range of composition,
editorial, production, distribution, and related services for publishers of
STM journals, magazines, association publications and other commercial
publications. Cadmus Marketing Communications provides commercial printing,
graphic solutions, print and broadcast advertising, direct marketing, catalog
and collateral design, point of purchase, specialty packaging, promotional
printing, fulfillment, software duplication and distribution, and interactive
services to customers who convey marketing messages.
Results of Operations
The following table presents the major components from the Condensed
Consolidated Statements of Income as a percent of net sales for the three and
nine month periods ended March 31, 1999 and 1998:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- ------------------
1999 1998 1999 1998
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Net sales.......................... 100.0% 100.0% 100.0% 100.0%
Cost of sales...................... 80.6 76.6 80.0 77.2
--------- --------- -------- --------
Gross profit....................... 19.4 23.4 20.0 22.8
Selling and administrative......... 14.1 16.0 13.7 15.9
Net gain on divestitures........... (9.5) -- (3.1) --
--------- --------- -------- --------
Operating income................... 14.8 7.4 9.4 6.9
Interest expense................... 1.9 1.7 2.0 1.9
Other expenses, net................ 0.7 0.4 0.4 0.4
--------- --------- -------- --------
Income before taxes................ 12.2 5.3 7.0 4.6
Income taxes....................... 4.7 2.0 2.7 1.8
--------- --------- -------- --------
Net income......................... 7.5% 3.3% 4.3% 2.8%
========= ========= ======== ========
</TABLE>
9
<PAGE>
Comparison of Third Fiscal Quarter of 1999 with Third Fiscal Quarter of 1998
Net Sales
Net sales for the third quarter of fiscal 1999 were $100.0 million, down
1.2% from sales of $101.2 million in the third quarter of fiscal 1998. The
decline in third quarter sales was driven primarily by lower sales from our
financial communications and custom publishing product lines which were
divested on March 1, 1999, and February 26, 1999, respectively. Net sales
declines from divested operations more than offset the addition of Germershiem
and strong growth in our packaging and promotional printing and graphic
solutions product lines. Adjusted for the acquisition of Germersheim, Inc.,
the divestitures of our financial communications and custom publishing product
lines and the estimated impact of paper price changes, net sales growth was
approximately 4.7% for the quarter ended March 31, 1999.
In the Professional Communications sector, fiscal third quarter net sales
rose by 3.3%. Adjusted for lower paper prices, third quarter net sales rose
5.0% compared to the same period last year. This increase was primarily
attributable to net sales growth of 8.6% in the third quarter of fiscal 1999
in our STM journal markets, when adjusted for lower paper prices. This growth
was partially offset by an 8.3% decline in special interest magazine net
sales, due principally to our decision to discontinue servicing certain non-
strategic magazine accounts in fiscal 1998.
Net sales for the Marketing Communications sector declined 5.7% for the
third quarter of fiscal 1999. This reduction was due principally to lower
sales in our financial communications and custom publishing businesses, which
we divested in the third quarter of fiscal year 1999. Adjusted for the
acquisition of Germersheim and the divestitures of our financial
communications and custom publishing product lines, net sales for the
Marketing Communications sector increased by 4.1% for the third quarter of
fiscal 1999. This increase was led by sales growth of 33.8% and 4.8%,
respectively, for our graphic solutions and specialty packaging and
promotional printing product lines. These increases were generally
attributable to the addition of new clients, increased work from existing
clients, and the enhancement of manufacturing and sales capacity within these
businesses. The acquisition of certain assets from Beacon Press in October
1998 also contributed to the increase in this year's third quarter results.
Gross Profit
Our gross profit margin declined to 19.4% of net sales for the third quarter
of fiscal 1999 compared to 23.4% for the same period of fiscal 1998. This
decrease was primarily attributable to several factors including: (1) the
impact of lower margins in our financial communication product line; (2) lower
net sales in our custom publishing product line, and (3) higher costs and
certain production inefficiencies associated with the integration of
Germersheim into our existing point-of-purchase product line. Adjusted for the
divested financial communications and custom publishing product lines, our
gross profit margin was 20.4% in the third quarter compared to 21.8% for the
prior year.
Selling and Administrative Expenses
Selling and administrative expenses expressed as a percentage of net sales
declined to 14.1% in the third quarter of fiscal 1999 compared to 16.0% for
the same period of fiscal 1998. This improvement was largely attributable to
better leverage from top-line sales growth, continued aggressive cost
containment, lower sales and administrative costs in our point of purchase
product line resulting from the integration of Germersheim and lower incentive
compensation and discretionary benefits reflecting lower than anticipated
quarterly performance.
Operating Income
Operating income rose 97.6% to $14.9 million in the third quarter of fiscal
1999 compared to $7.5 million in the same period of fiscal 1998. Adjusted for
the $9.5 million net pre-tax gain from the divestitures of our
10
<PAGE>
financial communications and custom publishing businesses, and the results of
operations of the divested businesses, operating income rose 22.9% to $6.8
million for the third quarter of fiscal 1999.
Interest Expense and Income Taxes
Interest expense increased $0.1 million for the third quarter of fiscal 1999
compared to the same period last year due to higher interim debt levels
resulting primarily from acquisitions and additional working capital
requirements.
The effective income tax rate was 38.5% for the third quarter of fiscal 1999
and fiscal 1998.
Comparison of Nine Months Ended March 31, 1999 with Nine Months Ended March
31, 1998
Net Sales
Net sales for the first nine months of fiscal 1999 increased 6.5% to $308.6
million from $289.6 million for the same period in fiscal 1998. The increase
for the nine-month period was driven primarily by growth from our STM journal,
graphic solutions and specialty packaging and promotional printing product
lines and the inclusion of Germersheim's point-of-purchase operations in the
first nine months of fiscal 1999. Adjusted for the acquisition of Germersheim
and the divestitures of our financial communications and custom publishing
product lines, net sales growth was 5.8% for the nine-month period ended March
31, 1999.
Professional Communications sector net sales rose 2.4% to $154.3 million
during the first nine months of fiscal 1999. This increase was primarily
attributable to net sales growth in our STM journal product line, which was
partially offset by lower magazine net sales. This decline was due principally
to our decision to discontinue serving certain non-strategic magazine accounts
in fiscal 1998.
Net sales for the Marketing Communications sector increased by 11.7% for the
first nine months of fiscal 1999, from $138.9 million to $155.1 million. This
increase was primarily driven by sales growth of 28.5% and 19.4% in our
graphic solutions and specialty packaging and promotional printing product
lines, respectively, and the inclusion of Germersheim's point-of-purchase
operations in the first nine months of fiscal 1999. These increases in net
sales were generally attributable to the addition of new clients, increased
work from existing clients and the expansion of manufacturing and selling
capacity within these businesses. The acquisition of certain assets from
Beacon Press in October 1998 also contributed to the growth in our graphic
solutions product line. These increases were partially offset by lower net
sales from our financial communications and custom publishing product lines,
which were divested in the third quarter of fiscal 1999.
Gross Profit
Our gross profit margin declined to 20.0% for the first nine months of
fiscal 1999, compared to 22.8% for the same period of fiscal 1998. This
decline was attributable to several factors, including: (1) the impact of
lower margins in our financial communications product line; (2) lower net
sales in our custom publishing product line; and (3) higher costs and certain
production inefficiencies associated with the integration of Germersheim into
our existing point-of-purchase product line. Adjusted for the divestitures of
our financial communications and custom publishing product lines, gross profit
margin was 20.3% for the first nine months of fiscal 1999 compared to 21.2%
for the same period last year.
Selling and Administrative Expenses
Selling and administrative expenses expressed as a percentage of net sales
declined to 13.7% in the first nine months of fiscal 1999 from 15.9% for the
same period of fiscal 1998. This improvement was largely attributable to net
sales growth, continued aggressive cost containment, lower sales and
administrative costs in our point-of-purchase product line resulting from the
integration of Germersheim and lower incentive compensation and discretionary
benefits reflecting lower than anticipated year-to-date performance.
11
<PAGE>
Operating Income
Operating income rose 44.5% for the first nine months of fiscal 1999 to
$28.9 million compared to $20.0 million in the same period of fiscal 1998.
Adjusted for the $9.5 million net pre-tax gain on the divestitures of our
financial communications and custom publishing product lines, and the
operating results of these product lines, our operating income rose 33.5% to
$20.6 million for the first nine months of fiscal 1999 compared to the same
period last year.
Interest Expense and Income Taxes
Interest expense increased $0.5 million for the first nine months of fiscal
1999 over the same period last year due to higher interim debt levels
resulting primarily from acquisitions and additional working capital
requirements.
The effective income tax rate remained unchanged at 38.5% for the first nine
months of fiscal 1999 and fiscal 1998.
Liquidity and Capital Resources
Operating Activities
Net cash provided by operating activities was $3.5 million for the first
nine months of fiscal 1999, as compared to $27.3 million for the first nine
months of 1998, representing a $23.8 million reduction in cash provided by
operating activities. This change was primarily due to an increase in working
capital demands in the first half of fiscal 1999, which included: (1) seasonal
increases in receivables due to higher net sales over the prior quarter and
pre-billings to customers; (2) seasonal increases to work in process and paper
inventory levels; (3) final payments on certain production equipment purchased
in late fiscal 1998; and (4) the payment of fiscal year 1998 sales and
management incentives. The decrease in cash provided by operating activities
as compared to the prior year was partially offset by a reduction in cash
outflows related to our restructuring plans announced in the fourth quarters
of fiscal years 1998 and 1997 and by a decrease in the required cash
contribution to fund our pension plan.
Investing Activities
Net cash provided by (used in) investing activities was $18.1 million for
the first nine months of fiscal 1999, compared to $(24.0) million in the first
nine months of 1998. This increase was due primarily to the receipt of $35.0
million in proceeds from the sale of the financial communications product
line, offset by an aggregate of $5.2 million paid for the purchase of certain
printing assets of Beacon Press and the acquisition of Dynamic Diagrams, Inc.,
a web information architecture firm. Capital expenditures for the first nine
months of fiscal 1999 were $12.3 million compared to $28.6 million in the
prior period, and primarily consisted of investments in new presses and new
business and manufacturing systems.
Financing Activities
Net cash used in financing activities was $21.3 million for the first nine
months of fiscal 1999 compared to $3.2 million for the same period of the
prior year. We reduced borrowings by $18.3 million in the first nine months of
fiscal 1999. Additional uses of funds include the repurchase of shares of our
common stock for $3.9 million, and dividend payments of $1.2 million.
Total debt at March 31, 1999 was $83.5 million, down from $101.8 million at
June 30, 1998, as proceeds from the sale of the financial communications
product line partially offset an increase in working capital requirements
described above. As a result of the decreased debt level, our debt to total
capital ratio decreased to 40.9% at March 31, 1999, from 48.1% at June 30,
1998.
12
<PAGE>
On April 1, 1999, we entered into a new five year, $200.0 million senior
credit facility. Initial borrowings under this facility totaled approximately
$145.0 million and were used to pay off borrowings under our former senior
credit facility, to repay certain indebtedness of Mack and to pay the cash
purchase price to the former shareholders of Mack.
Our primary cash requirements will be for debt service, capital expenditures
and working capital. Our primary sources of liquidity will be cash flow
provided by operations and borrowings under our senior credit facility. We
believe that these funds will provide us with sufficient liquidity and capital
resources to meet our anticipated debt service requirements, capital
expenditures and working capital needs through fiscal 2000. We cannot assure
you, however, that our business will generate sufficient cash flow from
operations or that future borrowings will be available under our senior credit
facility or otherwise to enable us to do so. Our future operating performance
and our ability to service or refinance the Notes or to service, extend or
refinance our senior credit facility depends on our ability to implement our
business strategy and on general economic, financial, competitive,
legislative, regulatory and other factors, many of which are beyond our
control.
Year 2000 Issue
Many computer systems in use today were designed and developed using two
digits, rather than four, to specify the year. As a result, such systems will
recognize the year 2000 as "00." This could cause many computer applications
to fail completely or to create erroneous results unless corrective measures
are taken. We recognize the need to ensure that our operations will not be
adversely impacted by Year 2000 software failures and are in the process of
preparing for the Year 2000. We are engaged in an ongoing analysis and
remediation of our Year 2000 exposure. Mack, which we acquired on April 1,
1999, was engaged in its own analysis of its Year 2000 exposure at the time we
acquired them. We are actively continuing the process that they started and
are aggressively integrating Mack's Year 2000 response model into our model,
which is discussed below. Because each company's Year 2000 model has operated
separately up to this point, we have presented separate discussions of each
below.
Cadmus
In April 1998, we designated a formal Year 2000 monitoring team to
coordinate, identify, evaluate and implement changes to computer systems and
applications necessary to achieve a Year 2000 date conversion with minimal
effect on customers or disruption to business operations. Cadmus' Year 2000
response model includes the following four phases, each of which are explained
more fully below:
. problem awareness;
. inventory;
. assessment; and
. remediation, testing and implementation.
Problem Awareness: During the problem awareness phase, we held training
sessions for management on potential effects of the change to the year 2000
and notified our employees that we were aware of and addressing the problem.
This phase was completed in October 1998.
Inventory: During this phase, the monitoring team conducted site level
inventories of systems and equipment to survey assets and software for
potential compliance problems. Information technology systems and operational
systems (presses, environmental controls, telecommunications equipment, etc.)
were addressed. These continually updated inventories formed the basis of the
site level remediation, testing and implementation efforts. All formal system
inventories were completed by November 1998.
Assessment: In the assessment phase, we analyzed the results of our
inventories and concluded that our risk of having non-compliant systems was
low. The assessment phase was completed by November 1998.
13
<PAGE>
Remediation, Testing and Implementation: This phase began in January 1999.
During this phase, we are implementing planned financial and administrative
system upgrades and Year 2000 compliant replacements. In addition, our manu-
facturing systems also are being made compliant. Programming modifications are
currently being tested and will be placed back into production when the test-
ing is complete. We expect to substantially complete all remediation, testing
and implementation on or before June 30, 1999, with the exception of implemen-
tation and testing of some systems (primarily embedded components) for which
vendors are currently developing upgrades. We expect those systems to be com-
pliant by July 31, 1999.
We believe that our most reasonably likely worst case Year 2000 scenario may
involve non-compliant vendors or non-compliant customers who may experience
business outages. Accordingly, we are currently communicating with all third
parties with which we have a material relationship (including vendors,
financial institutions and customers) and identifying potentially non-
compliant parties. We then will compile a list of non-compliant parties for
the purpose of assessing the degree of exposure and risk. Contingency plans
specific to those parties (including, with respect to vendors, alternative
vendor relationships) will be developed at that time. This process is expected
to be completed by July 31, 1999.
We estimate the total cost of achieving Year 2000 compliance to be $0.4
million to $0.6 million in excess of our normal software upgrades and
replacements. Some of these costs have already been incurred during fiscal
1998. The remainder will be incurred in fiscal 1999 and will be expensed
through operations.
Mack
We have substantially completed the inventory and assessment process for the
Mack entities and have made progress in their remediation.
Prior to our acquisition of Mack, they recognized the need to ensure that
their business operations would not be adversely affected by the Year 2000 and
were aware of the time-sensitive nature of the problem. Mack has assessed and
we are completing our assessment of how Mack may be impacted by the Year 2000.
Mack had formulated and commenced a comprehensive plan to address all known
aspects of the Year 2000 problem: information systems, production and
facilities equipment, suppliers and customers. We are currently making
inquiries of Mack's customers and suppliers to assess their Year 2000
readiness. We are also in the process of testing Mack's information technology
systems, as well as all other systems and verifying that vendor-supplied or
outsourced systems will be Year 2000 compliant. Any systems that are not
compliant will be repaired or replaced. Mack executives have represented that
they have substantially completed their assessment of how Mack may be
impacted, have completed the development of plans to address the testing and
remediation of their systems and have completed more than half of their
testing and remediation activities. In collaboration with former Mack
executives, we have estimated that Mack will complete this process prior to
October 1999.
The identifiable costs of assessing and modifying Mack's computer software
and hardware and its production facilities and equipment, incurred as of March
31, 1999, were $1.8 million. The estimated costs yet to be incurred are $2.0
million. In conjunction with our purchase of Mack, $2.0 million of the
purchase price has been placed in escrow to cover the expected Year 2000
costs. The current assessment (and therefore the escrow) does not include
costs related to software and hardware replaced in the normal course of
business other than replacements accelerated due to the Year 2000 issue.
We believe that the most reasonably likely worst-case Year 2000 scenario for
Mack may involve non-compliant vendors or non-compliant customers who may
experience business outages. Accordingly, we are currently communicating with
all third parties with which Mack has a material relationship (including
vendors, financial institutions and customers) and identifying potentially
non-compliant parties. We will compile a list of non-compliant parties for the
purpose of assessing the degree of exposure and risk. Contingency plans
specific to those parties (including, with respect to vendors, alternative
vendor relationships) will be developed at that time. We expect to complete
this entire process for Mack prior to November 1999.
14
<PAGE>
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There have been no material changes to the information concerning the
Company's "Quantitative and Qualitative Disclosures about Market Risk" as
previously reported in the Company's Report on Form 10-K for the year ended
June 30, 1998.
15
<PAGE>
PART II--OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
(c) On February 1, 1999, the Company issued 16,506 shares of its common stock
to Paul Kahn and 16,506 shares of its common stock to Krzysztof Lenk. The
common stock of the Company was issued to Mr. Kahn and Mr. Lenk in
connection with the purchase by Cadmus Journal Services, Inc. ("CJS"), a
subsidiary of the Company, of a portion of the stock of Dynamic Diagrams,
Inc., a privately held company, owned by Mr. Kahn and Mr. Lenk and in
partial satisfaction of the purchase price of the stock of Dynamic
Diagrams, Inc. purchased by CJS. The Company issued these shares of its
common stock to Mr. Kahn and Mr. Lenk in reliance upon the exemption from
registration under Section 4(2) of the Securities Act of 1933, as the
issuance by the Company did not involve a public offering of such shares.
Item 6. Exhibits and Reports on Form 8-K.
(a)Exhibits:
<TABLE>
<C> <S>
Exhibit 10.1 $200,000,000 Credit Agreement dated as of April 1, 1999 among
Cadmus Communications Corporation, The Banks Listed Therein,
NationsBank, N.A., as Documentation Agent, First Union National
Bank, as Syndication Agent and Wachovia Bank, N.A, as Agent
Exhibit 10.2 Senior Subordinated Increasing Rate Notes, Series A Indenture
Dated April 1, 1999, among Cadmus Communications Corporation,
Cadmus Journal Services, Inc., Washburn Graphics, Inc.,
American Graphics, Inc., Expert Graphics, Inc., Cadmus Direct
Marketing, Inc., Three Score, Inc., Mack Printing Company, Port
City Press, Inc., Mack Printing Group, Inc., Science Craftsman
Incorporated, each of the Cadmus Communications Corporation's
Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a
Guarantor and Wilmington Trust Company
Exhibit 10.3 Senior Subordinated Increasing Rate Notes, Series B Indentures
dated April 1, 1999, among Cadmus Communications Corporation ,
Cadmus Journal Services, Inc., Washburn Graphics, Inc.,
American Graphics, Inc., Expert Graphics, Inc., Cadmus Direct
Marketing, Inc., Three Score, Inc., Mack Printing Company, Port
City Press, Inc., Mack Printing Group, Inc., Science Craftsman
Incorporated, each of the Cadmus Communications Corporation's
Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a
Guarantor and Wilmington Trust Company
Exhibit 10.4 Senior Subordinated Increasing Rate Notes, Series C Indenture
Dated April 1, 1999, among Cadmus Communications Corporation ,
Cadmus Journal Services, Inc., Washburn Graphics, Inc.,
American Graphics, Inc., Expert Graphics, Inc., Cadmus Direct
Marketing, Inc., Three Score, Inc., Mack Printing Company, Port
City Press, Inc., Mack Printing Group, Inc., Science Craftsman
Incorporated, each of the Cadmus Communications Corporation's
Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a
Guarantor and Wilmington Trust Company
Exhibit 27 Financial Data Schedule
</TABLE>
(b)Reports on Form 8-K:
On January 26, 1999, the Company filed a Form 8-K, which included the press
release dated January 26, 1999 regarding fiscal 1999 second quarter
financial results, as well as a copy of the prepared remarks made on a
conference call to analysts on the same date.
16
<PAGE>
On February 26, 1999, the Company filed a Form 8-K, which included the
press release dated February 26, 1999 regarding the Company's decision to
sell its financial communications and custom publishing divisions, as well
as a copy of the prepared remarks made on a conference call to analysts on
the same date.
On March 12, 1999, the Company filed a Form 8-K, dated March 1, 1999, which
included a copy of the Purchase Agreement by and among Washburn Graphics,
Inc., Washburn of New York, Inc., Cadmus Communications Corporation, and R.
R. Donnelley & Sons Company, related to the sale of certain assets and
liabilities of the Company's Financial Communications division to R. R.
Donnelley & Sons Company.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Cadmus Communications Corporation
Date: May 13, 1999 /s/ C. Stephenson Gillispie, Jr.
_____________________________________
C. Stephenson Gillispie, Jr.
Chairman, President, and Chief
Executive Officer
Date: May 13, 1999 /s/ Bruce V. Thomas
_____________________________________
Bruce V. Thomas
Senior Vice President and Chief
Financial Officer
18
Exhibit 10.1
$200,000,000
CREDIT AGREEMENT
dated as of
April 1, 1999
among
CADMUS COMMUNICATIONS CORPORATION,
The Banks Listed Herein,
NATIONSBANK, N.A.,
as Documentation Agent,
FIRST UNION NATIONAL BANK,
as Syndication Agent
and
WACHOVIA BANK, N.A.,
as Agent
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of April 1, 1999 among CADMUS COMMUNICATIONS
CORPORATION, the BANKS listed on the signature pages hereof, NATIONSBANK, N.A.,
as Documentation Agent, FIRST UNION NATIONAL BANK, as Syndication Agent, and
WACHOVIA BANK, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section
1.01 shall, for all purposes of this Agreement and any amendment hereto (except
as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Acquired Entity" means Melham Holdings, Inc., a Delaware
corporation.
"Acquired Entity Group" means the Acquired Entity and each Person
that is a Subsidiary of the Acquired Entity. For the purpose of this definition
only, the definition of "Subsidiary" set forth in this Section shall be deemed
to refer to a Subsidiary of the Acquired Entity instead of the Borrower.
"Acquisition Agreement" means that certain Stock Purchase
Agreement by and among the Borrower, Melham U.S. Inc., Purico (IOM) Limited and
Paul F. Mack dated as of April 1, 1999, relating to the acquisition of the
Acquired Entity together with all agreements, exhibits, schedules, annexes and
documents executed or delivered in connection therewith.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.05(c).
"Affiliate" of any Person means (i) any other Person which
directly, or indirectly through one or more intermediaries, controls such
Person, (ii) any other Person which directly, or indirectly through one or more
intermediaries, is controlled by or is under common control with such Person, or
(iii) any other Person of which such Person owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means Wachovia Bank, N.A., a national banking association
organized under the laws of the United States of America, in its capacity as
agent for the Banks hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means, collectively, (i) that certain
letter agreement, dated as of February 5, 1999, between the Borrower and the
Agent relating to the structure of the Term Loans, Swing Line Loans and
Revolving Credit Loans, and certain fees from time to time payable by the
Borrower to the Agent, and (ii) that certain letter agreement, dated as of
February 5, 1999, between the Borrower and the Agent relating to certain fees
from time to time payable by the Borrower to the Agent, as such letter
agreements shall be modified, amended, supplemented or restated and in effect
from time to time.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Commitment Fee Rate" has the meaning set forth in
Section 2.06(a).
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit H.
"Authority" has the meaning set forth in Section 8.02.
"Automatic Collateral Rights Event" means the occurrence of any
of the following events at any time prior to the date on which Rating Level is
Level 1: (1) the Cadmus Corporate Rating is: (a) B+ or lower from S&P; or (b) B1
or lower from Moody's; or (2) the Take Out Subordinated Debt shall have received
a rating: (a) lower than "B" from S&P, or (b) lower than "B-2" from Moody's.
"Bank" means each bank listed on the signature pages hereof as
having a Term Loan Commitment and Revolving Credit Commitment, and its
successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate and the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Borrowing" means: (i) a Term Loan Borrowing if the
advances under such borrowing bear or are to bear interest calculated by
reference to the Base Rate; and (ii) a Revolving Credit Borrowing if the
advances under such borrowing bear or are to bear interest calculated by
reference to the Base Rate.
"Base Rate Loan" means: (i) the Term Loans during periods in
which the Term Loans bear or are to bear interest calculated by reference to the
Base Rate; and (ii) Revolving Credit Loans which bear or are to bear interest
calculated by reference to the Base Rate.
"Borrower" means Cadmus Communications Corporation, a corporation
incorporated under the laws of the Commonwealth of Virginia, and its successors
and permitted assigns.
"Bridge Subordinated Debt" means any and all indebtedness,
liabilities and obligations of the Borrower or any Subsidiary of the Borrower
under the Bridge Subordinated Indentures, the Bridge Subordinated Notes and all
amendments and modifications thereto and substitutions and replacements thereof.
"Bridge Subordinated Indentures" means the Indentures dated as of
April 1, 1999, among the Borrower or Mack Printing Company, as the case may be,
the Guarantors (as defined therein) and Wilmington Trust Company, as trustee, as
the same may be modified, amended, supplemented or restated from time to time in
compliance with the provisions of Section 5.26.
"Bridge Subordinated Notes" means the Borrower's or Mack Printing
Company's, as the case may be, promissory notes and other evidences of
indebtedness issued pursuant to the Bridge Subordinated Indentures and
containing terms, conditions and other provisions substantially identical to the
terms, conditions and other provisions of the form of Bridge Subordinated Notes
approved by the Agent and the Lenders as contemplated by Section 3.01(p).
"Cadmus Corporate Rating" means the corporate credit rating
assigned by Moody's and S&P to the Borrower by private letter or on a similar
confidential basis.
"Capital Expenditures" means, for any period, the sum of all
capital expenditures incurred during such period by the Borrower and its
Consolidated Subsidiaries (other than capitalized interest), as determined in
accordance with GAAP.
"Capital Stock" means any nonredeemable capital stock of the
Borrower or any Consolidated Subsidiary (to the extent issued to a Person other
than the Borrower), whether common or preferred.
"Cash Equivalents" means: (1) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (2) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's; (3) commercial paper
maturing no more than one year from the date of creation thereof and, at the
time of acquisition, having a rating of at least A-1 from S&P or at least P-1
from Moody's; (4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $250.0
million; (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.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Information System established pursuant to CERCLA.
"CFC Sale" means the sale by Washburn Graphics, Inc. and Washburn
of New York, Inc. of the Cadmus Financial Communications' business unit which
markets, sells and distributes financial printing services, mutual fund printing
services, shareholder communications printing services and activities related
thereto pursuant to the Sale Agreement.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means April 1, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Collateral" means, collectively, all of the property (including
capital stock) in which Liens are purported to be granted pursuant to the Pledge
Agreement as security for the Obligations.
"Collateral Agency Agreement " means the Collateral Agency
Agreement dated as of even date herewith among the Collateral Agent, the Banks,
the Borrower, the Guarantors and the Pledgor Subsidiaries, substantially in the
form attached hereto as Exhibit M.
"Collateral Agent" means Wachovia Bank, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as collateral agent for the Secured Parties under the Pledge Agreement,
the Guaranty, and the Collateral Agency Agreement.
"Commitment Fee Determination Date" has the meaning set forth in
Section 2.06(a).
"Commitment Fee Payment Date" means each March 31, June 30,
September 30 and December 31.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, (b) taxes on income of the Borrower and
its Consolidated Subsidiaries for such period to the extent deducted in
determining Consolidated Net Income for such period, (c) Consolidated Interest
Expense for such period, (d) book depreciation expenses of the Borrower and its
Consolidated Subsidiaries for such period, and (e) amortization of intangible
assets of the Borrower and its Consolidated Subsidiaries for such period, all
determined with respect to the Borrower and its Consolidated Subsidiaries on a
consolidated basis for such period and in accordance with GAAP. In determining
Consolidated EBITDA for any period, (i) any Consolidated Subsidiary acquired
during such period by the Borrower or any other Consolidated Subsidiary shall be
included on a pro forma, historical basis as if it had been a Consolidated
Subsidiary during such entire period, (ii) any amounts which would be included
in a determination of Consolidated EBITDA for such period with respect to assets
acquired during such period by the Borrower or any Consolidated Subsidiary shall
be included in the determination of Consolidated EBITDA for such period and the
amount thereof shall be calculated on a pro forma, historical basis as if such
assets had been acquired by the Borrower or such Consolidated Subsidiary prior
to the first day of such period, (iii) any Consolidated Subsidiary sold during
such period by the Borrower or any other Consolidated Subsidiary shall be
excluded as if it had not been a Consolidated Subsidiary at any time during such
period, and (iv) any amounts which would be otherwise included in a
determination of Consolidated EBITDA for such period with respect to assets sold
or otherwise disposed of during such period by the Borrower or any Consolidated
Subsidiary shall be excluded in the determination of Consolidated EBITDA for
such period and the amount excluded shall be calculated as if such assets had
been sold or otherwise disposed of by the Borrower or such Consolidated
Subsidiary prior to the first day of such period; provided that for each Fiscal
Quarter ending June 30, 1999, September 30, 1999 and December 31, 1999,
Consolidated EBITDA shall be increased by the amount of the Net EBITDA
Adjustment for such Fiscal Quarter.
"Consolidated Fixed Charges" for any period means the sum of (i)
Consolidated Interest Expense for such period, and (ii) all scheduled principal
payments due in respect of any Consolidated Total Debt for such period.
"Consolidated Interest Expense" for any period means interest
expensed in respect of Debt of the Borrower or any of its Consolidated
Subsidiaries outstanding during such period; provided that there shall be
excluded from Consolidated Interest Expense any amount that would otherwise be
included therein with respect to the non-cash amortization of deferred financing
costs.
"Consolidated Net Income" means, for any period, the Net Income
of the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis, but excluding (i) any non-cash restructuring and/or integration charges
taken by the Borrower in connection with the transactions described in the
Acquisition Agreement up to an aggregate amount of $12,000,000, (ii)
extraordinary items and (iii) any equity interests of the Borrower or any
Subsidiary in the unremitted earnings of any Person that is not a Subsidiary.
"Consolidated Net Worth" means, at any time, Stockholders'
Equity.
"Consolidated Senior Debt" means, at any date, the Debt of the
Borrower and its Consolidated Subsidiaries plus all Securitization Facility
Attributed Debt, determined on a consolidated basis as of such date, but
excluding Subordinated Debt.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated financial statements
as of such date.
"Consolidated Total Assets" means, at any time, the total assets
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Consolidated Total Debt" means, at any date, the Debt
(including, without limitation, Subordinated Debt) of the Borrower and its
Consolidated Subsidiaries plus all Securitization Facility Attributed Debt,
determined on a consolidated basis as of such date.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services (except trade accounts payable arising in the ordinary course of
business that are not overdue by 90 days or more or are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted),
(iv) all obligations of such Person as lessee under capital leases, (v) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance, (vi) all Redeemable Preferred Stock
of such Person (in the event such Person is a corporation), (vii) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (viii) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, and (ix) all Debt of others Guaranteed by such
Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived in writing, become an Event of Default.
"Default Rate" means, with respect to any Revolving Credit Loan,
Swing Line Loan or Term Loan, on any day, the sum of 2% plus the then highest
interest rate (including the Applicable Margin) which may be applicable to any
EuroDollar Loan or Base Rate Loan hereunder (irrespective of whether any such
type of loans are actually outstanding hereunder).
"Description of Take Out Notes" shall mean the document entitled
"Description of Notes" attached hereto as Exhibit N.
"Dollars" or "$" means dollars in lawful currency of the United
States of America.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in Georgia and New York, New York are
authorized or required by law to close.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment, including, without limitation, ambient air, surface water,
groundwater or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged noncompliance
with or liability under any Environmental Requirement, including without
limitation any complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of any violation of
any Environmental Requirement or any investigations concerning any violation of
any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or
under any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating
to health, safety or the environment and applicable to the Borrower, any
Subsidiary or the Properties, including but not limited to any such requirement
under CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law and the regulations
promulgated and rulings issued thereunder. Any reference to any provision of
ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Borrowing" means: (i) a Term Loan Borrowing if the
advances under such borrowing bear or are to bear interest at a rate based upon
the London Interbank Offered Rate; and (ii) a Revolving Credit Borrowing if the
advances under such borrowing bear or are to bear interest at a rate based upon
the London Interbank Offered Rate.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means: (i) the Term Loans during periods in
which the Term Loans bear interest at a rate based upon the London Interbank
Offered Rate; and (ii) Revolving Credit Loans which bear or are to bear interest
at a rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Executive Officer" means, with respect to any Person, the
president, any vice president, the treasurer or the chief financial officer of
such Person.
"Existing Credit Agreement" means that certain Credit Agreement
dated as of October 15, 1996 by and between the Borrower, the Agent,
NationsBank, N.A., as Co-Agent and a bank, First Union National Bank of
Virginia, as Co-Agent and a bank, and the other banks party thereto.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to Wachovia on such day on
such transactions as determined by the Agent.
"First Ratings Adjustment Date" shall mean the earlier of: (1)
June 15, 1999; or (2) the date that the condition or conditions set forth in
clause (1) or clause (2) of the definition of "Rating Level is Level 1" is or
are satisfied.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" means the ratio, measured as of the
last day of each Fiscal Quarter, of (a) (i) Consolidated EBITDA for the Fiscal
Quarter then ended and the immediately preceding three Fiscal Quarters, less
(ii) Capital Expenditures for the Fiscal Quarter then ended and the immediately
preceding three Fiscal Quarters to (b) Consolidated Fixed Charges for the Fiscal
Quarter then ended and the immediately preceding three Fiscal Quarters.
"GAAP" means generally accepted accounting principles applied on
a basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" means the Significant Subsidiaries from time to time
party to the Guaranty.
"Guaranty" means the Guaranty Agreement executed by each of the
Guarantors substantially in the form of Exhibit J hereto, either as originally
executed or as it may be from time to time supplemented, modified, amended,
renewed, extended or restated from time to time.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss.6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement to be entered into among the
Borrower, the Guarantors, the Pledgor Subsidiaries and the Collateral Agent,
substantially in the form attached hereto as Exhibit K, as modified, amended,
supplemented or restated from time to time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to clause (c) below) which would
otherwise end on a day which is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall, subject
to clause (c) below, end on the last Euro-Dollar Business Day of the appropriate
subsequent calendar month; and
(c) (i) any Interest Period applicable to the Term Loans which begins
before the Term Loan Maturity Date and would otherwise end after the Term Loan
Maturity Date shall end on the Term Loan Maturity Date; and (ii) any Interest
Period applicable to a Revolving Credit Loan which begins before the Revolving
Credit Maturity Date and would otherwise end after the Revolving Credit Maturity
Date shall end on the Revolving Credit Maturity Date; and
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be extended to
the next succeeding Domestic Business Day; and
(b) (i)any Interest Period applicable to the Term Loans which begins
before the Term Loan Maturity Date and would otherwise end after the Term Loan
Maturity Date shall end on the Term Loan Maturity Date; and (ii) any Interest
Period applicable to a Revolving Credit Loan which begins before the Revolving
Credit Maturity Date and would otherwise end after the Revolving Credit Maturity
Date shall end on the Revolving Credit Maturity Date.
(3) with respect to each Swing Line Borrowing, the period commencing on the date
of such borrowing and ending 1 to 14 days thereafter, as the Borrower may
request in the applicable Swing Line Loan Request; provided that:
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be extended to
the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins before the Revolving
Credit Maturity Date and would otherwise end after the Revolving Credit Maturity
Date.
"Investment" means any investment in any Person, whether by means
of purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, servitude or encumbrance of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan Documents" means this Agreement, the Notes, the Guaranty,
the Pledge Agreement, the Indemnity, Subrogation and Contribution Agreement, the
Collateral Agency Agreement, any other document evidencing, relating to or
securing the Term Loans, the Swing Line Loans or the Revolving Credit Loans, and
any other document or instrument delivered from time to time in connection with
this Agreement, the Notes, the Guaranty, the Pledge Agreement, the Indemnity,
Subrogation and Contribution Agreement, the Collateral Agency Agreement, or the
Term Loans, the Swing Line Loans or the Revolving Credit Loans, as such
documents and instruments may be amended or supplemented from time to time.
"Loan Parties" means collectively the Borrower and each
Subsidiary of the Borrower that is now or hereafter a party to any of the Loan
Documents.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Mack/Seller Promissory Notes" means the three (3) 11.5%
Subordinated Promissory Notes due March 31, 2010, in a principal amount not to
exceed $6,415,000, issued by the Borrower to the Sellers (as defined in the
Acquisition Agreement) under and pursuant to the Acquisition Agreement.
"Margin Stock" means "margin stock" as defined in Regulation T, U
or X of the Board of Governors of the Federal Reserve System, as in effect from
time to time, together with all official rulings and interpretations issued
thereunder.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, properties or prospects of the
Borrower and its Consolidated Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or the Banks under the Loan Documents, or the ability of
the Borrower to perform its obligations under the Loan Documents to which it is
a party, as applicable, or (c) the legality, validity or enforceability of this
Agreement, any Note, the Guaranty or the Pledge Agreement.
"Moody's" means Moody's Investors Service, Inc., and its
successors and assigns.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Disposition Proceeds" means the aggregate proceeds received
by the Borrower or a Subsidiary, in cash or any Cash Equivalent (including
payments in respect of deferred payment obligations when received in form of
cash or Cash Equivalents), upon the disposition of any property (whether real,
personal, mixed, tangible or intangible, including any Stock), after deducting
from the amount of such proceeds the sum of:
(a) all reasonable costs and expenses of such disposition;
(b) all amounts actually set aside as a reserve, in accordance
with GAAP, against any liabilities under any indemnification obligations
associated with such disposition;
(c) all taxes actually paid or payable by the Borrower or such
Subsidiary as a result of gain recognized in connection with the sale of such
property; and
(d) any amount actually paid by the Borrower or such Subsidiary
to discharge, or cause the discharge of, any Lien on such property;
provided, however: (1) that if at any time any non-cash consideration received
by the Borrower or any Subsidiary of the Borrower, as the case may be, in
connection with any disposition of any property is converted into or sold or
otherwise disposed of for cash (other than interest received with respect to any
such non-cash consideration), then such conversion or disposition shall be
deemed to constitute a disposition of assets hereunder and the Net Disposition
Proceeds thereof shall be applied in accordance with this Agreement; and (2) so
long as the Subordinated Debt is outstanding, the term "Net Disposition
Proceeds" shall include, without limitation, the "Net Cash Proceeds" as defined
in the Description of Take Out Notes.
"Net EBITDA Adjustment" means, for any period, solely for
calculating Consolidated EBITDA for any four-quarter period ending on or before
the first anniversary of the Closing Date, an amount (up to a maximum amount of
$3,034,000 for any such four-Fiscal Quarter period) equal to any quantifiable
cost savings which the Borrower demonstrates in reasonable detail to the Agent
as having been realized by the Borrower and its Subsidiaries as a result of or
in connection with the Pending Acquisition, such cost savings in each case to be
given pro forma effect as if they had been realized commencing as of the
beginning of the third Fiscal Quarter immediately preceding the Fiscal Quarter
in which the Borrower demonstrates such cost savings to the Agent (in each case
without duplication of any amounts already included in Consolidated EBITDA for
the relevant period or any portion thereof).
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Net Proceeds of Capital Stock" means any and all proceeds
(whether cash or non-cash) or other consideration received by the Borrower or a
Consolidated Subsidiary in respect of the issuance of Capital Stock (including,
without limitation, the aggregate amount of any and all Debt converted into
Capital Stock), from a Person other than the Borrower or a Consolidated
Subsidiary, after deducting therefrom all reasonable and customary costs and
expenses incurred by the Borrower or such Consolidated Subsidiary directly in
connection with the issuance of such Capital Stock.
"Net Proceeds of Debt" means any cash proceeds received by the
Borrower or a Subsidiary in respect of the incurrence of Debt (other than
Subordinated Debt and Debt permitted under Section 5.10, without giving effect
to any amendment to or waiver of Section 5.10) of the Borrower or such
Subsidiary, after deducting therefrom all reasonable and customary costs and
expenses incurred by the Borrower or such Subsidiary directly in connection with
the issuance of such Debt.
"Net Proceeds of Stock" means any cash proceeds received by the
Borrower or a Subsidiary in respect of the private or public issuance of Stock
of the Borrower or such Subsidiary, after deducting therefrom all reasonable and
customary costs and expenses incurred by the Borrower or such Subsidiary
directly in connection with the issuance of such Stock.
"Net Take Out Proceeds" has the meaning set forth in Section
5.30(a).
"Note" means a Term Loan Note, the Swing Line Note or a Revolving
Credit Note and "Notes" means the Term Loan Notes, Swing Line Notes and the
Revolving Credit Notes or any or all of them, as the context shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Obligations" means the collective reference to all indebtedness,
obligations and liabilities to the Banks, the Swing Line Lender, the Agent or
the Collateral Agent existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, of the Loan Parties under this
Agreement or any other Loan Document.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Participant" has the meaning set forth in Section 9.07(b).
"Participating Subsidiary" means any Subsidiary of the Borrower
that is a participant in a Permitted Securitization.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Pending Acquisition" means the acquisition by the Borrower of
all of the issued and outstanding capital stock and warrants of the Acquired
Entity from Melham U.S. Inc., Purico (IOM) Limited and Paul F. Mack pursuant to
the Acquisition Agreement.
"Permitted Acquisition" means the acquisition of shares of
capital stock or other equity interests of any Person by the Borrower or any
Subsidiary of the Borrower if: (A) immediately after giving effect to such
acquisition (i) such Person is a Consolidated Subsidiary; (ii) the Borrower
controls such Person directly or indirectly through a Subsidiary; and (iii) no
Default shall have occurred and be continuing; (B) the line or lines of business
engaged in by such Person are related to the lines of business engaged in by the
Borrower and its Subsidiaries on the Closing Date; (C) such acquisition is made
on a negotiated basis with the approval of the Board of Directors of the Person
to be acquired; and (D) such acquisition is permitted under Section 5.24.
"Permitted Sale/Leaseback Transaction" means with respect to any
Fiscal Year, one or more Sale/Leaseback Transactions entered into during such
Fiscal Year provided the aggregate fair market value of the real and personal
property subject to such transactions has an aggregate fair market value of
$10,000,000 or less.
"Permitted Securitization" means any financing program providing
for the sale or transfer of Securitization Assets by the Borrower or its
Participating Subsidiaries, in transactions purporting to be sales (and treated
as sales for GAAP purposes): (1) to one or more limited purpose financing
companies, special purpose entities and/or other financial institutions; (2) in
each case, on a nonrecourse basis as to the Borrower and the Participating
Subsidiaries subject to Standard Securitization Undertakings; and (3) in each
case, for the fair market value of the Securitization Assets sold or
transferred, including cash in an amount at least equal to 75% of the fair
market value thereof, as determined in accordance with GAAP.
"Person" means an individual, a corporation, a limited liability
company, a partnership (including without limitation, a joint venture), an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Pledge Agreement" means the Pledge Agreement dated as of even
date herewith executed by the Borrower and the other Loan Parties thereto in
favor of the Collateral Agent, for the ratable benefit of the Banks,
substantially in the form attached hereto as Exhibit L, as modified, amended,
supplemented or restated from time to time.
"Pledgor Subsidiary" has the meaning set forth in Section 5.23.
Without limiting the terms of Section 5.23, on the Closing Date, the term
Pledgor Subsidiaries includes: Cadmus Printing Group, Inc., Cadmus Marketing
Group, Inc., Melham, Inc. and Mack Printing Company.
"Prime Rate" refers to that interest rate so denominated and set
by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or otherwise
used or occupied by the Borrower or any Subsidiary, wherever located.
"Purchase Money Note" means a promissory note of a Receivables
Subsidiary evidencing a line of credit, which may be irrevocable, from the
Borrower or any Subsidiary of the Borrower in connection with a Permitted
Securitization to a Receivables Subsidiary which note shall be repaid from cash
available to the Receivables Subsidiary, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of newly generated receivables.
"Rate Determination Date" has the meaning set forth in Section
2.05(a).
"Rating Level is Level 1" means that, on the First Ratings
Adjustment Date or the Second Ratings Adjustment Date, as applicable, either:
(1) the Cadmus Corporate Rating is: (a) "Ba2" or higher from Moody's and (b)
"BB" or higher from S&P; or (2) the Borrower shall have issued pursuant to a
public offering or an offering under Rule 144A promulgated under the Securities
Act of 1933, the Take Out Subordinated Debt in accordance with Section 5.30 and
which Take Out Subordinated Debt shall have received ratings of "B+" or higher
from S&P, and of "B1" or higher from Moody's.
"Rating Level is Level 2" means that neither the conditions
described in clause (1) of the definition of Rating Level is Level 1 nor the
condition described in clause (2) of the definition of Rating Level is Level 1
have been satisfied.
"Receivables Subsidiary" means a special purpose, bankruptcy
remote Wholly Owned Subsidiary of the Borrower which may be formed for the sole
and exclusive purpose of engaging in activities in connection with the purchase,
sale and financing of Securitization Assets in connection with and pursuant to a
Permitted Securitization.
"Redeemable Preferred Stock" of any Person means any preferred
stock or equivalent issued by such Person which is at any time prior to the Term
Loan Maturity Date either (i) mandatorily redeemable (by sinking fund or similar
payments or otherwise) or (ii) redeemable at the option of the holder thereof.
"Reported Net Income" means, for any period, the Net Income of
the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis.
"Requesting Banks" means at any time (1) Banks having at least
33?% of the aggregate amount of the sum of: (i) Revolving Credit Commitments;
and (ii) Term Loan Commitments; or, (2) if the Revolving Credit Commitments and
Term Loan Commitments are no longer in effect, Banks holding at least 33?% of
the aggregate outstanding principal amount of the Notes.
"Required Banks" means: (A) at any time Wachovia holds more than
22 1/2% of the aggregate sum of the Revolving Credit Commitments and Term Loan
Commitments or if the Revolving Credit Commitments and Term Loan Commitments are
no longer in effect, at any time Wachovia holds more than 22 1/2% of the
aggregate outstanding principal amount of the Notes: (1) Banks having at least
55% of the aggregate amount of the sum of: (i) Revolving Credit Commitments; and
(ii) Term Loan Commitments; or, (2) if the Revolving Credit Commitments and Term
Loan Commitments are no longer in effect, Banks holding at least 55% of the
aggregate outstanding principal amount of the Notes; and (B) at any time
Wachovia holds an amount less than or equal to 22 1/2% of the aggregate sum of
the Revolving Credit Commitments and Term Loan Commitments or if the Revolving
Credit Commitments and Term Loan Commitments are no longer in effect, at any
time Wachovia holds an amount less than or equal to 22 1/2% of the aggregate
outstanding principal amount of the Notes: (1) Banks having at least 66 2/3% of
the aggregate amount of the sum of: (i) Revolving Credit Commitments; and (ii)
Term Loan Commitments; or, (2) if the Revolving Credit Commitments and Term Loan
Commitments are no longer in effect, Banks holding at least 66 2/3% of the
aggregate outstanding principal amount of the Notes.
"Restricted Payment" means (i) any dividend or other distribution
on any shares of the Borrower's capital stock (except dividends payable solely
in shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock (except shares acquired upon the conversion thereof into other
shares of its capital stock) or (b) any option, warrant or other right to
acquire shares of the Borrower's capital stock.
"Revolving Credit Borrowing" shall mean a borrowing under the
Revolving Credit Commitments consisting of Revolving Credit Loans made to the
Borrower at the same time by the Banks pursuant to Article II. A Revolving
Credit Borrowing is a "Euro-Dollar Borrowing" if such Revolving Credit Loans are
made as Euro-Dollar Loans and a "Base Rate Borrowing" if such Revolving Credit
Loans are made as Base Rate Loans.
"Revolving Credit Commitment" means with respect to each Bank,
(i) the amount designated as the Revolving Credit Commitment set forth opposite
the name of such Bank on the signature pages hereof, or (ii) as to any Bank
which enters into an Assignment and Acceptance (whether as transferor Bank or as
Assignee thereunder), the amount of such Bank's Revolving Credit Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.07 and 2.08.
"Revolving Credit Loan" means a Base Rate Loan or a Euro-Dollar
Loan made under the Revolving Credit Commitment and Revolving Credit Loans means
Base Rate Loans or Euro-Dollar Loans made under the Revolving Credit
Commitments, or any or all of them, as the context shall require.
"Revolving Credit Maturity Date" shall mean March 31, 2004.
"Revolving Credit Notes" means promissory notes of the Borrower,
each substantially in the form of Exhibit A hereto, evidencing the obligation of
the Borrower to repay the Revolving Credit Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto and "Revolving
Credit Note" means any one of such Revolving Credit Notes.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors and assigns.
"Sale Agreement" means that certain Asset Purchase Agreement by
and among Washburn Graphics, Inc., Washburn of New York, Inc., the Borrower and
R.R. Donnelley & Sons Company dated as of March 20, 1999, together with all
agreements, exhibits, schedules, annexes and documents executed or delivered in
connection therewith.
"Sale/Leaseback Transaction" means any arrangement with any
Person providing, directly or indirectly, for the leasing by the Borrower or any
of its Subsidiaries of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
"Second Ratings Adjustment Date" shall mean, the earlier of: (1)
July 31, 1999; (2) the date that the condition or conditions set forth in clause
(1) or clause (2) of the definition of "Rating Level is Level 1" is or are
satisfied; or (3) the date that the Borrower has notified the Agent and Banks
that the conditions set forth in the definition of "Rating Level is Level 1"
will not be satisfied.
"Section 5.31 Collateral" means, collectively, any and all of the
property (real, personal or other) in which the Collateral Agent, on behalf of
the Secured Parties, is provided a security interest pursuant to Section 5.31.
"Section 5.31 Security Instruments" shall have the meaning set
forth in Section 5.31.
"Secured Parties" shall have the meaning set forth in the
Collateral Agency Agreement.
"Securitization Assets" means all accounts receivable (whether
now existing or arising in the future) of the Borrower or any of its
Participating Subsidiaries which are sold or transferred pursuant to a Permitted
Securitization, and any assets related thereto, including without limitation (i)
all collateral given by any of the foregoing, (ii) all contracts and all
guarantees (but not by the Borrower or any of its Subsidiaries) or other
obligations directly related to any of the foregoing, (iii) other related assets
including those set forth in the Securitization Documents, and (iv) proceeds of
all of the foregoing.
"Securitization Documents" shall mean all documentation relating
to any Permitted Securitization.
"Securitization Facility Attributed Debt" at any time shall mean,
without duplication, the aggregate net outstanding amount theretofore paid to
the Receivables Subsidiary, the Borrower or Participating Subsidiaries in
respect of the Securitization Assets sold or transferred by it in connection
with a Permitted Securitization (it being the intent of the parties that the
amount of Securitization Facility Attributed Debt at any time outstanding
approximate as closely as possible the principal amount of Debt which would be
outstanding at such time under the Permitted Securitization if the same were
structured as a secured lending agreement rather than a purchase agreement).
"Security" has the meaning assigned to such term in Section 2(l)
of the Securities Act of 1933, as amended.
"Seller Securities" means collectively: (i) the shares of common
stock issued by the Borrower and delivered to the Sellers (as defined in the
Acquisition Agreement) in connection with the Pending Acquisition; and (ii) that
certain Registration Rights Agreement dated April 1, 1999, by and between the
Borrower and the Sellers (as defined in the Acquisition Agreement).
"Senior Leverage Ratio" means, as of any date, the ratio of (i)
Consolidated Senior Debt as of such date to (ii) Consolidated EBITDA for the
period of four consecutive Fiscal Quarters most recently ended on or prior to
such date.
"Significant Subsidiary" means collectively: (A) each Subsidiary
that is a member of the Significant Subsidiary Group; and (B) in addition to the
Subsidiaries described in (A), each Subsidiary that at any time Guarantees, all
or any part, of the Subordinated Debt. As used herein, "Significant Subsidiary
Group" as at any date means one or more Subsidiaries which account for (or in
the case of a recently formed or acquired Subsidiary would so account for on a
pro forma historical basis) at least (A)90% of Consolidated Total Assets as
measured as at the end of the then most recently ended Fiscal Year or (B)90% of
Consolidated EBITDA for either of the two most recently ended Fiscal Years. A
Subsidiary shall be a "Significant Subsidiary" if such Subsidiary is included in
the group of Subsidiaries, determined in accordance with the terms of the
following sentence, accounting for either: (1) the Consolidated Total Assets
measured under part (A) of the preceding sentence, but not the Consolidated
EBITDA measured under part (B) of the preceding sentence; or (2) the
Consolidated EBITDA measured under part (B) of the preceding sentence, but not
the Consolidated Total Assets measured under part (A) of the preceding sentence;
or (3) the Consolidated EBITDA measured under part (B) of the preceding sentence
and the Consolidated Total Assets measured under part (A) of the preceding
sentence. The determination of the Significant Subsidiary or the Significant
Subsidiaries comprising the Significant Subsidiary Group as of any date shall be
made on the basis of a group consisting of the smallest number of Subsidiaries
necessary to comprise the Significant Subsidiary Group as of such date.
Notwithstanding the foregoing, on the Closing Date, the Significant Subsidiary
Group shall be determined by reference to the Consolidated Total Assets and
Consolidated EBITDA as measured at and for the four quarter period ending
December 31, 1998 and shall be comprised of: (i) American Graphics, Inc; (ii)
Cadmus Journal Services, Inc.; (iii) Washburn Graphics, Inc.; (iv) Mack Printing
Company; (v) Port City Press, Inc.; (vi) Mack Printing Group, Inc.; (vii)
Science Craftsman, Incorporated; (viii) Expert Graphics, Inc.; (ix) Cadmus
Direct Marketing, Inc.; and (x) Three Score, Inc.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Borrower or any
Subsidiary of the Borrower which are reasonably customary in an accounts
receivable securitization.
"Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of capital stock, any
and all equivalent ownership interests and any and all other equity Security of
any classification, of such Person or any Subsidiary of such Person (to the
extent issued to a Person other than such Person or a wholly owned subsidiary of
such Person) and any and all warrants or options to purchase any of the
foregoing.
"Stockholders' Equity" means, at any time, the shareholders'
equity of the Borrower and its Consolidated Subsidiaries, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of the Borrower or any of its Consolidated
Subsidiaries.
"Subordinated Debt" means (i) Debt of the Borrower and Mack
Printing Company evidenced by the Bridge Subordinated Notes and the Bridge
Subordinated Documents, (ii) Debt of the Borrower evidenced by the Mack/Seller
Promissory Notes, (iii) the Take-Out Subordinated Debt incurred pursuant to and
in accordance with Section 5.30; and (iv) subordinated Guarantees of Debt
described in clause (i), (ii) or (iii) of this definition by the Borrower or any
Subsidiary pursuant to the Bridge Subordinated Indentures and any other
instruments or agreements in form and substance satisfactory to the Agent and
the Required Banks.
"Subordinated Debt Documents" means: (1) the Bridge Subordinated
Indentures, the Bridge Subordinated Notes, and each note, security instrument,
guaranty, agreement, opinion, certificate and other document executed or
delivered pursuant thereto or in connection therewith; (2) the Mack/Seller
Promissory Notes and each note, security instrument, guaranty, agreement,
opinion, certificate and other document executed or delivered pursuant to or in
connection with the Mack/Seller Promissory Notes; and (3) each note agreement,
indenture, note, security, instrument, guaranty, agreement, opinion, certificate
and other document executed or delivered pursuant to or in connection with the
Take Out Subordinated Debt.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower. For purposes of
the representations and warranties in Article IV (and the definitions of defined
terms used in Article IV) made on the Closing Date in connection with the
initial Borrowing (other than the representation and warranty contained in
Section 4.04(a)) , each Person that is a member of the Acquired Entity Group
shall be deemed to be a Subsidiary.
"Supplemental Mortgages" has the meaning set forth in Section
5.31.
"Swing Line Borrowing" means a Swing Line Loan made to the
Borrower by the Swing Line Lender pursuant to Article II.
"Swing Line Lender" means Wachovia Bank, N.A.
"Swing Line Loan" means a loan made by the Swing Line Lender
pursuant to Section 2.13 hereof.
"Swing Line Note" means the promissory note of the Borrower,
substantially in the form of Exhibit O hereto, evidencing the obligation of the
Borrower to repay the Swing Line Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Take Out Issuance Date" means the date that the proceeds of the
Take Out Subordinated Debt are disbursed to the Borrower and the Borrower has
applied the proceeds of the Take Out Subordinated Debt to repay the Bridge
Subordinated Debt.
"Take Out Subordinated Debt" means the Debt of the Borrower
incurred pursuant to and in accordance with Section 5.30 and evidenced pursuant
to instruments, agreements and other documents containing the terms and
conditions described in the Description of Take Out Notes and such other or
different terms and conditions as are permitted under Section 5.30.
"Taxes" has the meaning set forth in Section 2.11(c).
"Term Loans" means the loans made by the Banks under the Term
Loan Commitments and "Term Loan" means any one of such Term Loans. Except as may
be required pursuant to Section 2.05(f), at no time shall there be more than one
(1) Interest Period applicable to the Term Loans outstanding at the same time
(for which purpose Interest Periods described in different numbered clauses of
the definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminous).
"Term Loan Borrowing" shall mean a borrowing under the Term Loan
Commitments consisting of Term Loans made to the Borrower at the same time by
the Banks pursuant to Article II. A Term Loan Borrowing is a "Euro-Dollar
Borrowing" if such Term Loans are made as Euro-Dollar Loans and a "Base Rate
Borrowing" if such Term Loans are made as Base Rate Loans.
"Term Loan Commitment" means, with respect to each Bank, (i) the
amount designated as the Term Loan Commitment set forth opposite the name of
such Bank on the signature pages hereof, or (ii) as to any Bank which enters
into an Assignment and Acceptance (whether as transferor Bank or as Assignee
thereunder), the amount of such Bank's Term Loan Commitment after giving effect
to such Assignment and Acceptance, in each case as such amount may be reduced
from time to time pursuant to Section 2.08.
"Term Loan Commitment Reduction Date" means each March 31, June
30, September 30 and December 31, commencing on June 30, 1999, and continuing
until the Term Loan Maturity Date.
"Term Loan Maturity Date" means March 31, 2004.
"Term Loan Notes" means promissory notes of the Borrower, each
substantially in the form of Exhibit B hereto, evidencing the obligation of the
Borrower to repay the Term Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto and "Term Note" means any one of
such Term Notes.
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
"Total Assets" of any Person means, at any time, the total assets
of such Person, as set forth or reflected on the most recent balance sheet of
such Person, prepared in accordance with GAAP.
"Total Leverage Ratio" means, as of any date, the ratio of (i)
Consolidated Total Debt as of such date to (ii) Consolidated EBITDA for the
period of four consecutive Fiscal Quarters most recently ended on or prior to
such date.
"Total Unused Revolving Credit Commitments" means at any date, an
amount equal to: (A) the aggregate amount of the Revolving Credit Commitments of
all of the Banks at such time, less (B) the sum of: (i) the aggregate
outstanding principal amount of the Revolving Credit Loans of all of the Banks
at such time, plus (ii) the aggregate outstanding principal amount of the Swing
Line Loans at such time.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unused Revolving Credit Commitment" means at any date, with
respect to any Bank, an amount equal to its Revolving Credit Commitment less the
aggregate outstanding principal amount of its Revolving Credit Loans.
"Voting Stock" means capital stock in a Person, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.
"Wachovia" means Wachovia Bank, N.A., a national banking
association and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares
of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
"Y2K Plan" has the meaning set forth in Section 4.19.
"Year 2000 Compliant and Ready" as used herein means that (a) the
Borrower's and its Subsidiaries' hardware and software systems material to the
operation of its business and its general business plan will (i) handle date
information involving any and all dates before, during and/or after January 1,
2000, including accepting input, providing output and performing date
calculations in whole or in part, (ii) operate, accurately without interruption
on and in respect of any and all dates before, during and/or after January 1,
2000 and without any material change in performance, and (iii) store and provide
date input information without creating any ambiguity as to the century, and (b)
the Borrower has developed alternative plans to ensure business continuity in
the event of the failure of any or all of items (i) through (iii) above.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks, unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Agreement or any of the other Loan
Documents: (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements delivered
under Section 5.01 hereof, shall mean the financial statements referred to in
Section 4.04).
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 1.05. References. Unless otherwise indicated, references
in this Agreement to "Articles", "Exhibits", "Schedules", and "Sections" are
references to articles, exhibits, schedules and sections hereof.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.
(a) Revolving Credit Loans. Each Bank severally agrees, on the
terms and conditions set forth herein, to make Revolving Credit Loans to the
Borrower from time to time before the Revolving Credit Maturity Date; provided
that, immediately after each such Revolving Credit Loan is made, the aggregate
outstanding principal amount of Revolving Credit Loans by such Bank (together
with, in the case of the Swing Line Lender, the aggregate principal amount of
all Swing Line Loans) shall not exceed the amount of its Revolving Credit
Commitment, provided further that the aggregate principal amount of all
Revolving Credit Loans, together with the aggregate principal amount of all
Swing Line Loans, at any one time outstanding shall not exceed the aggregate
amount of the Revolving Credit Commitments of all of the Banks at such time.
Each Revolving Credit Borrowing that is a Euro-Dollar Borrowing under this
Section shall be in an aggregate principal amount of $2,500,000 or any larger
multiple of $500,000 and each Revolving Credit Borrowing that is a Base Rate
Borrowing under this Section shall be in an aggregate principal amount of
$1,000,000 or any larger multiple of $500,000 (except that any such Revolving
Credit Borrowing may be in the aggregate amount of the Total Unused Revolving
Credit Commitments) and shall be made from the several Banks ratably in
proportion to their respective Revolving Credit Commitments. Within the
foregoing limits, the Borrower may borrow under this Section 2.01(a), repay or,
to the extent permitted by Section 2.09, prepay Revolving Credit Loans and
reborrow under this Section 2.01(a) at any time before the Revolving Credit
Maturity Date.
(b) The Term Loans. (i) Each Bank severally agrees, on the terms
and conditions set forth herein, to make Term Loans to the Borrower from time to
time before the Term Loan Maturity Date; provided that, except as may be
required pursuant to Section 2.05(f), at no time shall any Bank have more than
one Term Loan outstanding and immediately after each such Term Loan is made, the
aggregate outstanding principal amount of Term Loans by such Bank shall not
exceed such Bank's Term Loan Commitment; and provided further that the aggregate
principal amount of all Term Loans at any one time outstanding shall not exceed
the aggregate amount of the Term Loan Commitments of all of the Banks at such
time. Each Term Loan Borrowing under this Section shall be made from the several
Banks ratably in proportion to their respective Term Loan Commitments. Within
the foregoing limits, the Borrower may borrow under this Section 2.01(b), repay
or to the extent permitted by Section 2.09, prepay Term Loans and reborrow under
this Section 2.01(b) at any time before the Term Loan Maturity Date; provided,
however, (y) the proceeds of any Term Loan Borrowing, other than the initial
Term Loan Borrowing, shall be used exclusively for the purpose of repaying Term
Loans maturing on the date of such Term Loan Borrowing and for no other purpose;
and (z) the ability to reborrow may be limited by the provisions of Section 2.08
hereof.
(ii) On the Closing Date: (y) the initial Term Loan
Borrowing shall be made by the Banks to the Borrower; and (z) in
connection with the initial Term Loan Borrowing, each Bank shall make a
Term Loan to the Borrower in an amount equal to such Bank's Term Loan
Commitment. The Term Loans comprising the initial Term Loan Borrowing
shall be Euro-Dollar Loans bearing interest at a rate per annum equal to
the sum of the Applicable Margin plus the Adjusted London Interbank
Offered Rate for an Interest Period of one month. The Term Loans shall
at all times be either Euro-Dollar Loans or Base Rate Loans; provided
that if the Borrower is otherwise entitled under this Agreement to repay
any Term Loans maturing at the end of an Interest Period applicable
thereto with the proceeds of a new Term Loan Borrowing and the Borrower
fails to repay such Term Loans using its own moneys and fails to give a
Notice of Borrowing in connection with a new corresponding Term Loan
Borrowing, a new Term Loan Borrowing shall be deemed to be made on the
date such Term Loans mature in an amount equal to the principal amount
of the Term Loans so maturing and such new Term Loan Borrowing shall be
comprised of Base Rate Loans with an Interest Period of 30 days.
SECTION 2.02. Method of Borrowing Revolving Credit Loans and Term
Loans . (a) The Borrower shall give the Agent notice in the form attached hereto
as Exhibit I (a "Notice of Borrowing") prior to 11:00 A.M. (Atlanta, Georgia
time) on the Domestic Business Day of each Base Rate Borrowing and at least 3
Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying:
(i) whether such borrowing constitutes a Revolving Credit
Borrowing or Term Loan Borrowing and the date of such borrowing, which
shall be a Domestic Business Day in the case of a Base Rate Borrowing or
a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of the Revolving Credit Borrowing or
Term Loan Borrowing, as the case may be; and
(iii) whether the Term Loans comprising a Term Loan Borrowing or
the Revolving Credit Loans comprising a Revolving Credit Borrowing are
to be Base Rate Loans or Euro-Dollar Loans, and the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Revolving Credit Borrowing or Term Loan Borrowing, as the case may
be, and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.
(c) Not later than 2:00 P.M. (Atlanta, Georgia time) on the date
of each Revolving Credit Borrowing or Term Loan Borrowing, as the case may be,
referenced in the Notice of Borrowing, each Bank shall (except as provided in
subsection (d) of this Section) make available its ratable share of such
Revolving Credit Borrowing or Term Loan Borrowing, as the case may be, in
Federal or other funds immediately available in Atlanta, Georgia, to the Agent
at its address referred to in or specified pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address. Unless the Agent
receives notice from a Bank, at the Agent's address referred to in Section 9.01,
no later than: (i) 4:00 P.M. (local time at such address) on the Domestic
Business Day before the date of a Euro-Dollar Borrowing stating that such Bank
will not make the applicable Euro-Dollar Loan in connection with such Revolving
Credit Borrowing or Term Loan Borrowing, as the case may be; or (ii) 12:00 P.M.
(local time at such address) on the Domestic Business Day of a Base Rate
Borrowing stating that such Bank will not make the applicable Base Rate Loan in
connection with such Revolving Credit Borrowing or Term Loan Borrowing, as the
case may be, the Agent shall be entitled to assume that such Bank will make the
Revolving Credit Loan or Term Loan in connection with such Revolving Credit
Borrowing or Term Loan Borrowing and, in reliance on such assumption, the Agent
may (but shall not be obligated to) make available such Bank's ratable share of
such Revolving Credit Borrowing or Term Loan Borrowing, as the case may be, to
the Borrower for the account of such Bank. If the Agent makes such Bank's
ratable share available to the Borrower and such Bank does not in fact make its
ratable share of such Revolving Credit Borrowing or Term Loan Borrowing, as the
case may be, available on such date, the Agent shall be entitled to recover such
Bank's ratable share from such Bank or the Borrower (and for such purpose shall
be entitled to charge such amount to any account of the Borrower with the
Agent), together with interest thereon for each day during the period from the
date of such Revolving Credit Borrowing or Term Loan Borrowing, as the case may
be, until such sum shall be paid in full at a rate per annum equal to the rate
at which the Agent determines that it obtained (or could have obtained)
overnight Federal funds to cover such amount for each such day during such
period, provided that any such payment by the Borrower of such Bank's ratable
share and interest thereon shall be without prejudice to any rights that the
Borrower may have against such Bank. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Revolving Credit Loan or Term Loan, as the case may be, included in such
borrowing for purposes of this Agreement.
(d) If any Bank makes: (i) a new Revolving Credit Loan hereunder
on a day on which the Borrower is to repay all or any part of an outstanding
Revolving Credit Loan from such Bank or (ii) a new Term Loan hereunder on a day
on which the Borrower is to repay all or any part of an outstanding Term Loan
from such Bank, such Bank shall apply the proceeds of its new Revolving Credit
Loan or Term Loan, as the case may be, to make such repayment and only an amount
equal to the difference (if any) between the amount being borrowed and the
amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (c) of this Section, or remitted by the Borrower to the
Agent as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived in writing.
(f) In the event that a Notice of Borrowing fails to specify
whether the Revolving Credit Loans comprising such Revolving Credit Borrowing
are to be Base Rate Loans or Euro-Dollar Loans, such Revolving Credit Loans
shall be made as Base Rate Loans. If the Borrower is otherwise entitled under
this Agreement to repay any Revolving Credit Loans maturing at the end of an
Interest Period applicable thereto with the proceeds of a new Revolving Credit
Borrowing and the Borrower fails to repay such Revolving Credit Loans using its
own moneys and fails to give a Notice of Borrowing in connection with a new
corresponding Revolving Credit Borrowing, a new Revolving Credit Borrowing shall
be deemed to be made on the date such Revolving Credit Loans mature in an amount
equal to the principal amount of the Revolving Credit Loans so maturing, and the
Revolving Credit Loans comprising such new Revolving Credit Borrowing shall be
Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein,
(i) there shall not be more than nine (9) different Interest Periods outstanding
at the same time (for which purpose Interest Periods described in different
numbered clauses of the definition of the term "Interest Period" shall be deemed
to be different Interest Periods even if they are coterminous) applicable to the
Revolving Credit Loans and (ii) the proceeds of any Revolving Credit Borrowing
that is a Base Rate Borrowing shall be applied first to repay the unpaid
principal amount of all Revolving Credit Borrowings that are Base Rate Loans (if
any) outstanding immediately before such Base Rate Borrowing.
SECTION 2.03. Notes. (a) The Revolving Credit Loans of each Bank
shall be evidenced by a single Revolving Credit Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to the
original principal amount of such Bank's Revolving Credit Commitment.
(b) The Term Loan of each Bank shall be evidenced by a single
Term Loan Note payable to the order of such Bank for the account of its Lending
Office in an amount equal to the original principal amount of such Bank's Term
Loan Commitment.
(c) The Swing Line Loans made by the Swing Line Lender to the
Borrower shall be evidenced by a single Swing Line Note payable to the order of
the Swing Line Lender.
(d) Upon receipt of each Bank's Notes pursuant to Section 3.01,
the Agent shall deliver such Notes to such Bank. Each Bank shall record, and
prior to any transfer of its Notes shall endorse on the schedule forming a part
thereof appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Revolving Credit Loan or Term Loan, as the
case may be, made by it, the date and amount of each payment of principal made
by the Borrower with respect thereto and whether, in the case of such Bank's
Revolving Credit Note or Term Loan Note, such Revolving Credit Loan or Term
Loan, as the case may be, is a Base Rate Loan or Euro-Dollar Loan, and such
schedule shall constitute rebuttable presumptive evidence of the principal
amount owing and unpaid on such Bank's Notes; provided that the failure of any
Bank to make, or any error in making, any such recordation or endorsement shall
not affect the obligation of the Borrower hereunder or under the Notes or the
ability of any Bank to assign its Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Notes and to attach to and make a
part of any Note a continuation of any such schedule as and when required.
SECTION 2.04. Maturity of Revolving Credit Loans and Term Loans.
(a) Revolving Credit Loans. Each Revolving Credit Loan included
in any Revolving Credit Borrowing shall mature, and the principal amount thereof
shall be due and payable, on the first to occur of: (i) the last day of the
Interest Period applicable to such Revolving Credit Borrowing; or (ii) the
Revolving Credit Maturity Date; provided, however, that the aggregate
outstanding principal amount of all Revolving Credit Loans at any one time
outstanding shall not exceed the aggregate amount of the Revolving Credit
Commitments of all of the Banks at such time.
(b) Term Loans. Each Term Loan included in any Term Loan
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the first to occur of: (i) the last day of the Interest Period
applicable to such Term Loan Borrowing; or (ii) the Term Loan Maturity Date;
provided, however, that the aggregate outstanding principal amount of all Term
Loans at any one time outstanding shall not exceed the aggregate amount of the
Term Loan Commitments of all of the Banks at such time.
SECTION 2.05. Interest Rates. (a) "Applicable Margin" shall be
determined quarterly based upon the Total Leverage Ratio (calculated as of the
last day of each Fiscal Quarter), as follows:
(I) (a) For the period from and including the First Ratings
Adjustment Date and continuing at all times thereafter, if the Rating Level is
Level 1 on the First Ratings Adjustment Date, and (b) for the period from and
including the Second Ratings Adjustment Date and continuing at all times
thereafter if the Rating Level is Level 1 on the Second Ratings Adjustment Date:
<TABLE>
<CAPTION>
Revolving Credit
If the Total Term Loans that are Loans that are
Leverage Ratio is: Base Rate Loans Euro-Dollar Loans Euro-Dollar Loans
- ------------------ --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Greater than or equal to 4.0 .75% 2.75% 2.75%
to 1.0
Greater than or equal to 3.5
to 1.0 but less than 4.0 to .50% 2.25% 2.25%
1.0
Greater than or equal to 3.0
to 1.0 but less than 3.5 to .25% 2.00% 2.00%
1.0
Greater than or equal to 2.5
to 1.0 but less than 3.0 to 0% 1.75% 1.75%
1.0
Less than 2.5 to 1.0 0% 1.50% 1.50%
</TABLE>
(II) For the period from and including the Second Ratings
Adjustment Date and continuing at all times thereafter if the Rating Level is
Level 2 on the Second Ratings Adjustment Date:
<TABLE>
<CAPTION>
Revolving Credit
If the Total Term Loans that are Loans that are
Leverage Ratio is: Base Rate Loans Euro-Dollar Loans Euro-Dollar Loans
- ------------------ --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Greater than or equal to 4.0 1.25% 3.25% 3.25%
to 1.0
Greater than or equal to 3.5
to 1.0 but less than 4.0 to 1.00% 2.75% 2.75%
1.0
Greater than or equal to 3.0
to 1.0 but less than 3.5 to .625% 2.375% 2.375%
1.0
Greater than or equal to 2.5
to 1.0 but less than 3.0 to .375% 2.125% 2.125%
1.0
Less than 2.5 to 1.0 .25% 1.75% 1.75%
</TABLE>
The Applicable Margin shall be determined effective as of the date (herein, the
"Rate Determination Date") which is 45 days after the last day of the Fiscal
Quarter as of the end of which the Total Leverage Ratio is being determined,
based on the quarterly financial statements for such Fiscal Quarter, and the
Applicable Margin so determined shall remain effective from such Rate
Determination Date until the date which is 45 days after the last day of the
Fiscal Quarter in which such Rate Determination Date falls (which latter date
shall be a new Rate Determination Date); provided that (i) for the period from
and including the Closing Date to but excluding the Rate Determination Date next
following the Fiscal Quarter ending September 30, 1999, the Applicable Margin
shall be: (I) for the periods: (1) from and including the Closing Date to but
excluding the First Ratings Adjustment Date; (2) from and including the First
Ratings Adjustment Date and continuing thereafter, if the Rating Level is Level
1 on the First Ratings Adjustment Date, to but excluding the Rate Determination
Date next following the Fiscal Quarter ending September 30, 1999; and (3) from
and including the Second Ratings Adjustment Date and continuing thereafter, if
the Rating Level is Level 1 on the Second Ratings Adjustment Date, to but
excluding the Rate Determination Date next following the Fiscal Quarter ending
September 30, 1999: (A) .50% for Base Rate Loans, and (B) (y) 2.25% for Term
Loans that are Euro-Dollar Loans; and (z) 2.25% for Revolving Credit Loans that
are Euro-Dollar Loans, and (II) for the periods: (1) from and including the
First Ratings Adjustment Date to but excluding the Second Ratings Adjustment
Date if the Rating Level is Level 2 on the First Ratings Adjustment Date; and
(2) from and including the Second Ratings Adjustment Date and continuing
thereafter if the Rating Level is Level 2 on the Second Ratings Adjustment Date,
to but excluding the Rate Determination Date next following the Fiscal Quarter
ending September 30, 1999: (A) 1.00% for Base Rate Loans, and (B) (y) 2.75% for
Term Loans that are Euro-Dollar Loans; and (z) 2.75% for Revolving Credit Loans
that are Euro-Dollar Loans, (ii) in the case of any Applicable Margin determined
for the fourth and final Fiscal Quarter of a Fiscal Year, the Rate Determination
Date shall be the date which is 90 days after the last day of such final Fiscal
Quarter and such Applicable Margin shall be determined based upon the annual
audited financial statements for the Fiscal Year ended on the last day of such
final Fiscal Quarter, and (iii) if on any Rate Determination Date the Borrower
shall have failed to deliver to the Banks the financial statements required to
be delivered pursuant to Section 5.01(b) with respect to the Fiscal Quarter most
recently ended prior to such Rate Determination Date, then for the period
beginning on such Rate Determination Date and ending on the earlier of (A) the
date on which the Borrower shall deliver to the Banks the financial statements
to be delivered pursuant to Section 5.01(b) with respect to such Fiscal Quarter
or any subsequent Fiscal Quarter, or (B) the date on which the Borrower shall
deliver to the Banks annual financial statements required to be delivered
pursuant to Section 5.01(a) with respect to the Fiscal Year which includes such
Fiscal Quarter or any subsequent Fiscal Year, the Applicable Margin shall be
determined as if the Total Leverage Ratio was greater than 4.0 to 1.0 at all
times during such period. Any change in the Applicable Margin on any Rate
Determination Date shall result in a corresponding change, effective on and as
of such Rate Determination Date, in the interest rate applicable to each
Revolving Credit Loan and Term Loan outstanding on such Rate Determination Date;
provided that (i) for Euro-Dollar Loans, changes in the Applicable Margin shall
only be effective for Interest Periods commencing on or after such Rate
Determination Date, and (ii) no Applicable Margin shall be decreased pursuant to
this Section 2.05(a) if a Default is in existence on such Rate Determination
Date, unless and until such Default shall have been cured or waived in writing.
(b) Each Term Loan and Revolving Credit Loan that is a Base Rate
Loan shall bear interest on the outstanding principal amount thereof, for each
day from the date such Base Rate Loan is made until it becomes due, at a rate
per annum equal to the Base Rate for such day plus the Applicable Margin. Such
interest shall be payable for each Interest Period on the last day thereof. Any
overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Base Rate Loan (excluding a Swing Line Loan) shall bear
interest, payable on demand, for each day until paid in full at a rate per annum
equal to the Default Rate.
(c) Each Term Loan and Revolving Credit Loan that is a
Euro-Dollar Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the sum of the Applicable Margin plus the applicable Adjusted London
Interbank Offered Rate for such Interest Period; provided that if any
Euro-Dollar Loan shall, as a result of clause (1)(c) of the definition of
Interest Period, have an Interest Period of less than one month, such
Euro-Dollar Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 3 months, at intervals of 3 months after the first day thereof. Any
overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid in full at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar
Loan means for the Interest Period of such Euro-Dollar Loan the rate per annum
determined on the basis of the rate for deposits in Dollars of amounts equal or
comparable to the principal amount of such Euro-Dollar Loan offered for a term
comparable to such Interest Period, which rate appears on the display designated
as Page "3750" of the Telerate Service (or such other page as may replace Page
3750 of that service or such other service or services as may be nominated by
the British Banker's Association for the purpose of displaying London Interbank
Offered Rates for U.S. dollar deposits) determined as of 1:00 p.m. New York City
time, 2 Euro-Dollar Business Days prior to the first day of such Interest
Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) The Agent shall determine each interest rate applicable to
the Term Loans, Swing Line Loans and Revolving Credit Loans hereunder. The Agent
shall give prompt notice to the Borrower and the Banks by telecopy of each rate
of interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
(e) After the occurrence and during the continuance of a Default,
the principal amount of the Term Loans and Revolving Credit Loans (excluding any
Swing Line Loans) (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Required Banks, bear interest at
the Default Rate; provided, however, that automatically whether or not the
Required Banks elect to do so, any overdue principal of and, to the extent
permitted by law, overdue interest on any Term Loan and on any Revolving Credit
Loan (excluding any Swing Line Loan) shall bear interest payable on demand, for
each day until paid at a rate per annum equal to the Default Rate. After the
occurrence and during the continuance of a Default, the principal amount of the
Swing Line Loans (and, to the extent permitted by applicable law, all accrued
interest thereon) may, at the election of the Swing Line Lender, bear interest
at the Default Rate.
(f) Notwithstanding anything herein to the contrary, if one or
more Term Loan Commitment Reduction Dates are scheduled to occur during an
Interest Period in which the Term Loans are Euro-Dollar Loans other than on the
last day of such Interest Period, then during such Interest Period a portion of
the outstanding balance of the Term Loans which is equal to the aggregate amount
of the principal payment due on the Term Loans on such Term Loan Commitment
Reduction Dates shall be Base Rate Loans, and only the remaining portion of the
outstanding principal of the Term Loans shall constitute Euro-Dollar Loans.
(g) Each Swing Line Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Base Rate. Such interest shall be payable for such
Interest Period on the last day thereof. Any overdue principal of and, to the
extent permitted by applicable law, overdue interest on the Swing Line Loans
may, at the election of the Swing Line Lender, bear interest, payable on demand,
for each day until paid at a rate per annum equal to the Default Rate.
SECTION 2.06. Fees. (a) The Borrower shall pay to the Agent for
the ratable account of each Bank a commitment fee equal to the product of: (i)
the aggregate of the daily average amounts of such Banks' Unused Revolving
Credit Commitments during the applicable period, times (ii) a per annum
percentage equal to the Applicable Commitment Fee Rate. Such commitment fee
shall accrue from and including the Closing Date to and including the Revolving
Credit Maturity Date. Commitment fees shall be payable quarterly in arrears on
the first Commitment Fee Payment Date following each Commitment Fee
Determination Date and on the Revolving Credit Maturity Date; provided that
should the Revolving Credit Commitments be terminated at any time prior to the
Revolving Credit Maturity Date for any reason, the entire accrued and unpaid
commitment fee through the date of termination shall be paid on the date of such
termination. The "Applicable Commitment Fee Rate" shall be determined quarterly
based upon the Total Leverage Ratio (calculated as of the last day of each
Fiscal Quarter), as follows:
(I) (a) For the period from and including the First Ratings
Adjustment Date and continuing at all times thereafter, if the Rating Level is
Level 1 on the First Ratings Adjustment Date, and (b) for the period from and
including the Second Ratings Adjustment Date and continuing at all times
thereafter if the Rating Level is Level 1 on the Second Ratings Adjustment Date:
If the Total Leverage Ratio is: Applicable Commitment Fee Rate
------------------------------- ------------------------------
Greater than or equal to 4.0 to 1.0 .50%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 .50%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 .40%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 .30%
Less than 2.5 to 1.0 .25%
(II) For the period from and including the Second Ratings
Adjustment Date and continuing at all times thereafter if the Rating Level is
Level 2 on the Second Ratings Adjustment Date:
If the Total Leverage Ratio is: Applicable Commitment Fee Rate
------------------------------- ------------------------------
Greater than or equal to 4.0 to 1.0 .625%
Greater than or equal to 3.5 to 1.0
but less than 4.0 to 1.0 .625%
Greater than or equal to 3.0 to 1.0
but less than 3.5 to 1.0 .525%
Greater than or equal to 2.5 to 1.0
but less than 3.0 to 1.0 .425%
Less than 2.5 to 1.0 .375%
The Applicable Commitment Fee Rate shall be determined effective as of the date
(herein, the "Commitment Fee Determination Date") which is 45 days after the
last day of the Fiscal Quarter as of the end of which the Total Leverage Ratio
is being determined, based on the quarterly financial statements for such Fiscal
Quarter, and the Applicable Commitment Fee Rate so determined shall remain
effective from such Commitment Fee Determination Date until the date which is 45
days after the last day of the Fiscal Quarter in which such Commitment Fee
Determination Date falls (which latter date shall be a new Commitment Fee
Determination Date); provided that (i) for the period from and including the
Closing Date to but excluding the Commitment Fee Determination Date next
following the Fiscal Quarter ending September 30, 1999, the Applicable
Commitment Fee Rate shall be: (I) for the periods: (1) from and including the
Closing Date to but excluding the First Ratings Adjustment Date; (2) from and
including the First Ratings Adjustment Date and continuing thereafter, if the
Rating Level is Level 1 on the First Ratings Adjustment Date, to but excluding
the Commitment Fee Determination Date next following the Fiscal Quarter ending
September 30, 1999; and (3) from and including the Second Ratings Adjustment
Date and continuing thereafter, if the Rating Level is Level 1 on the Second
Ratings Adjustment Date, to but excluding the Commitment Fee Determination Date
next following the Fiscal Quarter ending September 30, 1999; .50%; and (II) for
the periods: (1) from and including the First Ratings Adjustment Date to but
excluding the Second Ratings Adjustment Date if the Rating Level is Level 2 on
the First Ratings Adjustment Date; and (2) from and including the Second Ratings
Adjustment Date and continuing thereafter if the Rating Level is Level 2 on the
Second Ratings Adjustment Date, to but excluding the Commitment Fee
Determination Date next following the Fiscal Quarter ending September 30, 1999;
.625%; (ii) in the case of any Applicable Commitment Fee Rate determined for the
fourth and final Fiscal Quarter of a Fiscal Year, the Commitment Fee
Determination Date shall be the date which is 90 days after the last day of such
final Fiscal Quarter and such Applicable Commitment Fee Rate shall be determined
based upon the annual audited financial statements for the Fiscal Year ended on
the last day of such final Fiscal Quarter, and (iii) if on any Commitment Fee
Determination Date the Borrower shall have failed to deliver to the Banks the
financial statements required to be delivered pursuant to Section 5.01(b) with
respect to the Fiscal Quarter most recently ended prior to such Commitment Fee
Determination Date, then for the period beginning on such Commitment Fee
Determination Date and ending on the earlier of (A) the date on which the
Borrower shall deliver to the Banks the financial statements to be delivered
pursuant to Section 5.01(b) with respect to such Fiscal Quarter or any
subsequent Fiscal Quarter, and (B) the date on which the Borrower shall deliver
to the Banks annual financial statements required to be delivered pursuant to
Section 5.01(a) with respect to the Fiscal Year which includes such Fiscal
Quarter or any subsequent Fiscal Year, the Applicable Commitment Fee Rate shall
be determined as if the Total Leverage Ratio was greater than 4.0 to 1.0 at all
times during such period; provided that the Applicable Commitment Fee Rate shall
not be decreased pursuant to this Section 2.06(a) if a Default is in existence
on the related Commitment Fee Determination Date, unless and until such Default
shall have been cured or waived in writing.
(b) The Borrower shall pay to the Agent, for the account and sole
benefit of the Agent, such fees and other amounts at such times as set forth in
the Agent's Letter Agreement.
SECTION 2.07. Optional Termination or Reduction of Revolving
Credit Commitments. The Borrower may, upon at least 3 Domestic Business Days'
notice to the Agent, terminate at any time, or proportionately reduce from time
to time by an aggregate amount of at least $5,000,000 or any larger multiple of
$1,000,000, the Revolving Credit Commitments; provided, however, no such
termination or reduction shall be in an amount greater than the Total Unused
Revolving Credit Commitments on the date of such termination or reduction after
giving effect to any repayment or prepayment made on such date. If the Revolving
Credit Commitments are terminated in their entirety, all accrued fees (as
provided under Section 2.06(a)) shall be payable on the effective date of such
termination.
SECTION 2.08. Mandatory Reduction and Termination of Commitments.
(a) Revolving Credit Commitments. The Revolving Credit
Commitments shall terminate on the Revolving Credit Maturity Date and any
Revolving Credit Loan then outstanding (together with accrued interest thereon)
shall be due and payable in full on such date.
(b) Term Loan Commitments. (1) The Term Loan Commitments shall
terminate on the Term Loan Maturity Date and any Term Loans then outstanding
(together with accrued interest thereon) shall be due and payable in full on
such date.
(2) The aggregate amount of the Term Loan Commitments shall be
reduced as follows:
Term Loan Commitment Reduction
Date in the Month and Year Indicated Amount of Reduction
------------------------------------- -------------------
June 1999 $1,250,000
September 1999 $1,250,000
December 1999 $1,250,000
March 2000 $1,250,000
June 2000 $2,500,000
September 2000 $2,500,000
December 2000 $2,500,000
March 2001 $2,500,000
June 2001 $3,000,000
September 2001 $3,000,000
December 2001 $3,000,000
March 2002 $3,000,000
June 2002 $3,250,000
September 2002 $3,250,000
December 2002 $3,250,000
March 2003 $3,250,000
June 2003 $3,750,000
September 2003 $3,750,000
December 2003 $3,750,000
March 2004 $3,750,000
(3) If the Borrower shall repay or prepay any Term Loans other
than with the proceeds of a new Term Loan Borrowing under the Term Loan
Commitments then there shall be a mandatory reduction of the Term Loan
Commitments to an amount equal to the aggregate principal amount of all Term
Loans then outstanding (after giving effect to such repayment or prepayment).
(c) Additional Reductions to Term Loan Commitments.
(1) On each occasion that the Borrower or any of its Subsidiaries
shall issue any Stock or incur any Debt (excluding, however, Subordinated Debt
and Debt permitted under Section 5.10, without giving effect to any amendment to
or waiver of Section 5.10), the Borrower shall immediately give the notice
required by Section 2.08(d) on the date of such issuance or incurrence, and on
the date which is three Euro-Dollar Business Days after the date of the
Borrower's or Subsidiary's, as the case may be, receipt of the Net Proceeds of
Stock (in the case of issuance of stock) or Net Proceeds of Debt (in the case of
incurrence of Debt), as the case may be, the Term Loan Commitments shall be
automatically reduced, in accordance with Section 2.08(c)(4), in an amount equal
to 100% of the Net Proceeds of Stock (in the case of issuance of Stock) or 100%
of the Net Proceeds of Debt (in the case of incurrence of Debt), as the case may
be.
(2) In the event and on each occasion of a sale, lease, transfer
or other disposition by the Borrower or any Subsidiary of any real or personal
property in any Fiscal Year (including, without limitation, the sale or other
transfer of Securitization Assets but excluding a sale, lease, transfer or other
disposition of assets pursuant to a Permitted Sale/Leaseback Transaction)
resulting in Net Disposition Proceeds in excess of $250,000, or, when aggregated
with all other Net Disposition Proceeds received by the Borrower or any
Subsidiary during such Fiscal Year, are in excess of $250,000, then
simultaneously with each such sale, lease, transfer or other disposition, the
Borrower shall immediately give the notice required by Section 2.08(d), and on
the date which is three Euro-Dollar Business Days after the date of receipt of
the applicable Net Disposition Proceeds, the Term Loan Commitments shall be
automatically reduced, in accordance with Section 2.08(c)(4) in an amount equal
to the excess of (i) the sum of (A) the Net Disposition Proceeds thereof and (B)
the aggregate amount of all Net Disposition Proceeds received from all other
sales, leases, transfers or other dispositions by the Borrower and its
Subsidiaries during such Fiscal Year, over (ii) the aggregate amount of
reductions in the Term Loan Commitments previously made during such Fiscal Year
pursuant to this paragraph (2). Notwithstanding anything contained herein to the
contrary the Term Loan Commitments shall not be reduced pursuant to this Section
2.08(c)(2) by the proceeds from the sale, lease, transfer or other disposition
by the Borrower or any Subsidiary of any equipment (expressly excluding Net
Disposition Proceeds arising from the sale or other transfer of Securitization
Assets) if the entire Net Disposition Proceeds of such sold, leased, transferred
or disposed equipment are used by the Borrower or the applicable Subsidiary to
purchase equipment or other fixed assets having a market value equal to or
greater than the equipment so disposed provided such equipment or other fixed
assets are purchased within 120 days of the Borrower's or such applicable
Subsidiary's receipt of such Net Disposition Proceeds. The Borrower covenants
and agrees that: (1) 100% of the gross proceeds payable to the Borrower or any
Subsidiary in connection with any sale or other transfer of Securitization
Assets shall be in cash or a Cash Equivalent; and (2) no less than 80% of the
gross proceeds payable to the Borrower or any Subsidiary in connection with any
sale, lease, transfer or other disposition of any real or personal property
which is not permitted under Section 5.13 (but has been approved by the Required
Banks) shall be in cash or a Cash Equivalents and received at the time of such
disposition.
(3) In the event there shall occur any casualty or condemnation
with respect to any real or personal property of the Borrower or its
Subsidiaries and if pursuant to Section 5.29 and the proceeds arising from such
casualty or condemnation are required to be used to reduce the Term Loan
Commitments, then the Borrower shall immediately give the notice required by
Section 2.08 (d), and not more than three Euro-Dollar Business Days after such
notice, the Term Loan Commitments shall be automatically reduced, in accordance
with Section 2.08(c)(4) in an amount equal to 100% of such proceeds.
(4) Any reduction to the Term Loan Commitments pursuant to
Section 2.08(c) shall be applied to reduce the Term Loan Commitments of the
several Banks ratably. Any optional reduction of the Term Loan Commitments shall
reduce the amount of any subsequent mandatory reductions pursuant to paragraph
(2) of Section 2.08(b) in their inverse chronological order of maturity. No
mandatory reduction of the Term Loan Commitments pursuant to any paragraph of
Section 2.08(b) or any paragraph of this Section 2.08 (c) shall reduce the
amount of any subsequent mandatory reduction of the Term Loan Commitments
pursuant to such paragraph or any other paragraph of Section 2.08 (b) or this
Section 2.08(c).
(d) The Borrower shall give the Agent written notice of any
mandatory reduction of the Term Loan Commitments to be made pursuant to
paragraph (1), (2) or (3) of Section 2.08(c), specifying the date of such
reduction, the amount of such reduction and that such reduction is being made
pursuant to Section 2.08(c) (and specifying the paragraph of Section 2.08(c)
pursuant to which such reduction is being made). Any such notice is irrevocable,
once given. Any and all reductions to the Revolving Credit Commitments and Term
Loan Commitments under this Agreement shall be permanent and irrevocable.
SECTION 2.09. Optional Prepayments of Revolving Credit Loans and
Term Loans. (a) The Borrower may, upon at least 1 Domestic Business Day's notice
to the Agent, prepay any Revolving Credit Loan or Term Loan that is a Base Rate
Borrowing (excluding a Swing Line Loan) in whole at any time, or from time to
time in part in amounts aggregating at least $2,000,000 or any larger multiple
of $1,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Revolving Credit Loans or Term
Loans, as the case may be, of the several Banks included in such Base Rate
Borrowing; provided that except as provided in and subject to the terms of
Section 2.08(b), (c) and (d), such prepayment shall be applied as directed by
the Borrower.
(b) Except as provided in Section 8.02, the Borrower may not
prepay all or any portion of the principal amount of any Euro-Dollar Loan prior
to the last day of an Interest Period applicable thereto, unless such prepayment
is accompanied by the amount due with respect thereto under Section 8.05(a).
(c) The Borrower may prepay any Swing Line Loan in whole at any
time, or from time to time in part in amounts aggregating at least $100,000 or
any larger multiple thereof by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Prepayments. (a) On each date on which
the Revolving Credit Commitments are reduced or terminated pursuant to Section
2.07 or Section 2.08, the Borrower shall repay or prepay such principal amount
of the outstanding Revolving Credit Loans, if any (together with interest
accrued thereon and any amounts due under Section 8.05(a)), as may be necessary
so that after such payment the aggregate unpaid principal amount of the
Revolving Credit Loans does not exceed the aggregate amount of the Revolving
Credit Commitments as then reduced. Each such payment or prepayment shall be
applied to repay or prepay ratably the Revolving Credit Loans of the several
Banks.
(b) On each date on which the Term Loan Commitments are reduced
pursuant to Section 2.08, the Borrower shall repay or prepay such principal
amount of the outstanding Term Loans, if any (together with interest accrued
thereon and any amounts due under Section 8.05(a)), as may be necessary so that
after such payment the aggregate unpaid principal amount of the Term Loans does
not exceed the aggregate amount of the Term Loan Commitments as then reduced.
Each such payment or prepayment shall be applied to repay or prepay ratably the
Term Loans of the several Banks.
SECTION 2.11. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Term Loans, Swing
Line Loans and Revolving Credit Loans and of commitment fees hereunder, not
later than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in Federal
or other funds immediately available in Atlanta, Georgia, to the Agent at its
address referred to in Section 9.01, and any such payment to the Agent in
accordance with this Section 2.11 shall satisfy in full the Borrower's
obligation to make such payment hereunder and under the Notes. The Agent will
promptly distribute to each Bank its ratable share of each such payment received
by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(c) All payments of principal, interest and fees and all other
amounts to be made by the Borrower pursuant to this Agreement with respect to
any Term Loan, Swing Line Loan or Revolving Credit Loan or fee relating thereto
shall be paid without deduction for, and free from, any tax, imposts, levies,
duties, deductions, or withholdings of any nature now or at anytime hereafter
imposed by any governmental authority or by any taxing authority thereof or
therein excluding in the case of each Bank, (i) taxes imposed on or measured by
its net income, (ii) franchise taxes imposed on it, by the jurisdiction under
the laws of which such Bank is organized or any political subdivision thereof,
and (iii) taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Bank's applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, imposts, levies, duties,
deductions or withholdings of any nature being "Taxes"). In the event that the
Borrower is required by applicable law to make any such withholding or deduction
of Taxes with respect to any Term Loan, Swing Line Loan or Revolving Credit Loan
or fee or other amount, promptly after receiving notice thereof, the Borrower
shall pay such deduction or withholding to the applicable taxing authority,
shall promptly furnish to any Bank in respect of which such deduction or
withholding is made all receipts and other documents evidencing such payment and
shall pay to such Bank additional amounts as may be necessary in order that the
amount received by such Bank after the required withholding or other payment
shall equal the amount such Bank would have received had no such withholding or
other payment been made. If no withholding or deduction of Taxes are payable in
respect of any Term Loan, Swing Line Loan or Revolving Credit Loan or fee
relating thereto, upon the request of any Bank having a reasonable belief or
concern that such Bank may be subject to Taxes, the Borrower shall furnish, at
such Bank's request, a certificate from each applicable taxing authority or an
opinion of counsel acceptable to such Bank, in either case stating that such
payments are exempt from or not subject to withholding or deduction of Taxes. If
the Borrower fails to provide such original or certified copy of a receipt
evidencing payment of Taxes or certificate(s) or opinion of counsel of
exemption, the Borrower hereby agrees to compensate such Bank for, and indemnify
it with respect to, the tax consequences of the Borrower's failure to provide
evidence of tax payments or tax exemption.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11, it will pay to the Borrower the amount
of such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Each Bank organized under the laws of a jurisdiction other than
the United States or any state thereof shall deliver to the Borrower, with a
copy to the Agent, on the Closing Date or concurrently with the delivery of the
relevant Assignment and Acceptance, as applicable, (i) two United States
Internal Revenue Service Forms 4224 or Forms 1001, as applicable (or successor
forms) properly completed and certifying in each case that such Bank is entitled
to a complete exemption from withholding or deduction for or on account of any
United States federal income taxes, and (ii) an Internal Revenue Service Form
W-8 or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding taxes. Each such Bank further
agrees to deliver to the Borrower, with a copy to the Agent, a Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms or manner of certification,
as the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, certifying in the case
of a Form 1001 or 4224 that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Bank notifies the
Borrower and the Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withhold tax.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.11 shall be applicable with respect to any Participant, Assignee
or other Transferee, and any calculations required by such provisions (i) shall
be made based upon the circumstances of such Participant, Assignee or other
Transferee, and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or cancellation of the
Notes.
SECTION 2.12. Computation of Interest and Fees. Interest on Base
Rate Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Commitment fees and any other fees payable hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
SECTION 2.13. Swing Line Loans. (a) The Borrower may prior to the
Revolving Credit Maturity Date, as set forth in this Section, request the Swing
Line Lender to make, and the Swing Line Lender prior to the Revolving Credit
Maturity Date will make, Swing Line Loans to the Borrower, in an aggregate
principal amount at any one time outstanding, not exceeding $10,000,000,
provided that:
(i) there may be no more than two (2) different Interest Periods
for Swing Line Loans outstanding at the same time;
(ii) the aggregate principal amount of all Swing Line Loans,
together with the aggregate outstanding principal amount of all
outstanding Revolving Credit Loans, at any one time outstanding shall
not at any one time exceed the aggregate amount of the Revolving Credit
Commitments of all of the Banks at such time; and
(iii) the aggregate principal amount of all Swing Line Loans,
together with all outstanding Revolving Credit Loans made by the Swing
Line Lender, at any one time outstanding shall not exceed the Revolving
Credit Commitment of the Swing Line Lender.
(b) When the Borrower wishes to request a Swing Line Loan, it
shall give the Agent notice substantially in the form of Exhibit P hereto (a
"Swing Line Loan Request") so as to be received no later than 11:00 A.M.
(Atlanta, Georgia time) on or before the date of the proposed Swing Line
Borrowing proposed therein (or such other time and date as the Borrower and the
Swing Line Lender may agree), specifying:
(i) the proposed date of such Swing Line Borrowing, which shall
be a Domestic Business Day (the "Borrowing Date");
(ii) the aggregate amount of such Swing Line Borrowing, which
shall be at least $500,000 (or in larger multiples of $100,000) but
shall not cause the limits specified in Section 2.13(a) to be violated;
and
(iii) the duration of the Interest Period applicable thereto,
which shall be 1 to 14 days.
The Borrower may request Swing Line Loans for up to two (2)
different Interest Periods in a single Swing Line Loan Request; provided that
the request for each separate Interest Period shall be deemed to be a separate
Swing Line Loan Request for a separate Swing Line Borrowing. Except as otherwise
provided in the immediately preceding sentence, the Borrower shall not deliver a
Swing Line Loan Request more frequently than once every 3 Domestic Business
Days.
(c) The Swing Line Lender shall make the amount of such Swing
Line Loan available to the Borrower on such date by depositing the same, in
immediately available funds, in an account of such Borrower maintained with the
Swing Line Lender.
(d) Subject to the limitations contained in this Agreement, the
Borrower may borrow under this Section 2.13, prepay and reborrow under this
Section 2.13 at any time before the Revolving Credit Maturity Date. Each Swing
Line Loan included in any Swing Line Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the first to occur of: (i) the last
day of the Interest Period applicable to such Swing Line Borrowing; or (ii) the
Revolving Credit Maturity Date;
(e) At any time, upon the request of the Swing Line Lender, each
Bank other than the Swing Line Lender shall, on the third Domestic Business Day
after such request is made, purchase a participating interest in Swing Line
Loans in an amount equal to its ratable share (based upon its respective
Revolving Credit Commitment) of such Swing Line Loans. On such third Domestic
Business Day, each Bank will immediately transfer to the Swing Line Lender, in
immediately available funds, the amount of its participation. Whenever, at any
time after the Swing Line Lender has received from any such Bank its
participating interest in a Swing Line Loan, the Agent receives any payment on
account thereof, the Agent will distribute to such Bank its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's participating
interest was outstanding and funded); provided, however, that in the event that
such payment received by the Agent is required to be returned, such Bank will
return to the Agent any portion thereof previously distributed by the Agent to
it. Each Bank's obligation to purchase such participating interests shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation: (i) any set-off, counterclaim, recoupment,
defense or other right which such Bank or any other Person may have against the
Swing Line Lender requesting such purchase or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the termination of the Revolving Credit Commitments, provided that no
Bank shall be required to purchase a participating interest in any Swing Line
Loan first advanced after the Swing Line Lender has actual knowledge of an Event
of Default; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower or any other Person; (iv) any breach of this Agreement by the
Borrower or any other Bank, provided that no Bank shall be required to purchase
a participating interest in any Swing Line Loan, if the aggregate outstanding
principal amount of all Swing Line Loans exceeds $10,000,000; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
(f) Notwithstanding anything contained in this Agreement to the
contrary, the Swing Line Loan facility contained in this Section 2.13 shall
terminate immediately upon: (i) Wachovia's removal or resignation as Agent; or
(ii) termination of the Revolving Credit Commitments (whether at maturity or
otherwise).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to Closing. On or before the Closing
Date, the Borrower shall satisfy each of the following conditions:
(a) receipt by the Agent from each of the parties hereto of a
duly executed counterpart of this Agreement signed by such party;
(b) receipt by the Agent of a duly executed Revolving Credit
Note, Swing Line Note and Term Loan Note for the account of each Bank complying
with the provisions of Section 2.03;
(c) receipt by the Agent of an opinion (together with any
opinions of local counsel relied on therein) of Mays & Valentine, L.L.P.,
counsel for the Loan Parties, dated as of the Closing Date, substantially in the
form of Exhibit C hereto and covering such additional matters relating to the
transactions contemplated hereby as the Agent or any Bank may reasonably
request;
(d) receipt by the Agent of an opinion of Womble, Carlyle,
Sandridge & Rice, PLLC, special counsel for the Agent, dated as of the Closing
Date, substantially in the form of Exhibit D hereto and covering such additional
matters relating to the transactions contemplated hereby as the Agent may
reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the Closing Date, substantially in the form of Exhibit E
hereto, signed by the Vice President and Treasurer or another senior financial
officer of the Borrower and of each Loan Party, to the effect that (i) no
Default has occurred and is continuing on the Closing Date; and (ii) the
representations and warranties of the Loan Parties contained in the Loan
Documents are true on and as of the Closing Date;
(f) receipt by the Agent of all documents which the Agent may
reasonably request relating to the existence of each Loan Party, the corporate
authority for and the validity of each Loan Document to which it is a party and
any other matters relevant hereto, all in form and substance satisfactory to the
Agent, including without limitation a certificate of incumbency of such Loan
Party (the "Officer's Certificate"), signed by the Secretary or an Assistant
Secretary of such Loan Party, substantially in the form of Exhibit F hereto,
certifying as to the names, true signatures and incumbency of the officer or
officers of such Loan Party authorized to execute and deliver the Loan Documents
to which it is a party, and certified copies of the following items: (i) such
Loan Party's Certificate of Incorporation (or its equivalent), (ii) such Loan
Party's Bylaws, (iii) a certificate of the Secretary of State (or its
equivalent) of the State of incorporation of such Loan Party as to the existence
of such Loan Party as a corporation organized under the laws of such state, and
(iv) the action taken by the Board of Directors of such Loan Party authorizing
such Loan Party's execution, delivery and performance of the Loan Documents to
which it is a party;
(g) receipt by the Collateral Agent of the Guaranty, duly
executed by each Guarantor;
(h) receipt by the Agent of (i) the Collateral Agency Agreement,
duly executed by each Loan Party which is party thereto, and (ii) the Indemnity,
Subrogation and Contribution Agreement, duly executed by each Loan Party which
is a party thereto;
(i) receipt by the Collateral Agent of the Pledge Agreement, duly
executed by each Loan Party which is a party thereto;
(j) receipt by the Collateral Agent of certificates representing
shares of all capital stock pledged under the Pledge Agreement to the Collateral
Agent, accompanied by instruments of transfer and stock powers endorsed in
blank, together with evidence satisfactory to the Collateral Agent that such
capital stock has been duly and validly pledged thereunder to the Collateral
Agent for the ratable benefit of the Banks and is subject to no other Lien other
than the Lien created under the Pledge Agreement to secure the Obligations;
(k) the Agent and the Banks shall have received copies of the
Acquisition Agreement and any other material documents relating to the Pending
Acquisition that the Agent and Banks may request and the Agent and the Banks in
their sole discretion shall be satisfied with the terms of the Pending
Acquisition and the Acquisition Agreement and any such additional material
documents relating to the Pending Acquisition that the Agent and Banks may have
requested;
(l) the Borrower shall have demonstrated to the Agent and the
Banks in their sole discretion, that (i) all conditions to the closing of the
Pending Acquisition required to have been met have been met or waived (with the
consent of the Agent and the Banks) (including, without limitation, evidence
that all governmental and third party filings, consents and approvals have been
obtained and are in full force and effect, and all waiting periods have expired
without any adverse action being taken or imposed on the Borrower or its
Subsidiaries or any of their respective businesses or properties by any
governmental authority), (ii) the Acquisition Agreement is in full force and
effect, (iii) the consummation of the Pending Acquisition will occur immediately
upon the funding of the initial loans under this Agreement, and (iv) immediately
after giving effect to the consummation of the Pending Acquisition, the Acquired
Entity Group shall have no Debt and be subject to no Lien (other than as set
forth on Schedule 3.01 hereto);
(m) the Agent and the Banks shall have received copies of the
Sale Agreement and any other material documents relating to the CFC Sale as the
Agent or any Bank may request and the Agent and the Banks shall be satisfied in
their sole discretion with the terms of the CFC Sale and the Sale Agreement and
any such additional material documents relating to the CFC Sale as the Banks and
Agent may have requested;
(n) receipt by the Agent and the Banks of evidence satisfactory
to the Agent and the Banks that the Existing Credit Agreement shall have been
terminated and the Debt evidenced thereby repaid in full, or shall be terminated
and repaid in full simultaneously with the initial funding of the Revolving
Credit Loans and Term Loans under this Agreement;
(o) the Borrower shall have delivered to the Agent and the Banks
true and complete copies of the Bridge Subordinated Indentures and the forms of
the Bridge Subordinated Notes to be issued pursuant thereto and all other
documentation relating to the Bridge Subordinated Notes as the Agent or any Bank
may request;
(p) (i) the Bridge Subordinated Notes shall have been issued,
with gross proceeds paid (or credited) to the Borrower of at least $110,000,000,
and all terms and conditions of the Bridge Subordinated Notes, the Bridge
Subordinated Indentures and the other documentation related thereto shall be
satisfactory to the Agent and the Banks in their sole discretion (including,
without limitation, the costs and expenses incurred by the Borrower directly in
connection with the issuance of such Bridge Subordinated Debt being less than
$1,250,000); (ii) the Bridge Subordinated Debt shall not at any time bear a rate
of interest (exclusive of any applicable default rate) in excess of 14% per
annum; (iii) the principal amount of the Bridge Subordinated Notes made by Mack
Printing Company shall not exceed $10,000,000; and (iv) the Agent and the Banks
shall have determined in their sole discretion that the Revolving Credit Loans,
Term Loans, Swing Line Loans and all of the other Obligations constitute "Senior
Debt" for all purposes of the Bridge Subordinated Indentures, the Bridge
Subordinated Notes and the Bridge Subordinated Debt.
(q) (i) the Borrower shall have delivered to the Agent and the
Banks evidence satisfactory to the Agent and the Banks of issuance of the Seller
Securities and true and complete copies of the Mack/Seller Promissory Notes and
all other documentation relating to the Seller Securities and the Mack/Seller
Promissory Notes as the Agent or any Bank may request; (ii) the Mack/Seller
Promissory Notes and Seller Securities shall have been issued, with total gross
proceeds paid (or credited) to the Borrower of (A) no more than $6,415,000 in
the case of the Mack/Seller Promissory Notes; and (B) at least $18,585,000 in
the case of the Seller Securities, and all terms and conditions of the Seller
Securities and Mack/Seller Promissory Notes and any documentation related
thereto shall be satisfactory to the Agent and the Banks in their sole
discretion; and (iii) the Agent and the Banks shall have determined in their
sole discretion that the Term Loans, Revolving Credit Loans, Swing Line Loans
and all of the other Obligations shall constitute "Senior Debt" (or shall
otherwise be senior in right and time of payment to Debt evidenced by the
Mack/Seller Promissory Notes) for all purposes of the Mack/Seller Promissory
Notes;
(r) receipt by the Agent and the Banks of the calculations,
financial information and other supporting data, in form satisfactory to the
Agent and Banks, in their sole discretion, identifying the Subsidiaries
comprising the Significant Subsidiary Group; and
(s) receipt by the Agent and the Banks of evidence that all fees
due and payable to the Agent and the Banks on the Closing Date have been paid in
full;
(t) receipt by the Agent of such other documents or items as the
Agent, the Banks or their counsel may reasonably request.
SECTION 3.02. Conditions to All Borrowings. The obligation of
each Bank to make a Revolving Credit Loan or Term Loan on the occasion of each
Revolving Credit Borrowing or Term Loan Borrowing, as the case may be, (or the
Swing Line Lender with regard to Swing Line Loans) is subject to the
satisfaction of the following conditions:
(a) except as provided in Sections 2.01(b)(ii) or 2.02(f): (i)
receipt by the Agent of a Notice of Borrowing as required by Section 2.02 (in
the case of a Revolving Credit Loan or Term Loan); or (ii) compliance with the
provisions of Section 2.13, in the case of a Swing Line Loan;
(b) the fact that, immediately before and after such Revolving
Credit Borrowing, Swing Line Borrowing or Term Loan Borrowing, as the case may
be, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and as of
the date of such Revolving Credit Borrowing, Swing Line Borrowing or Term Loan
Borrowing, as the case may be;
(d) the fact that the representations and warranties of the
Guarantors contained in the Guaranty and of each Loan Party contained in the
Pledge Agreement shall be true on and as of the date of such Revolving Credit
Borrowing, Swing Line Borrowing or Term Loan Borrowing, as the case may be; and
(e) the fact that, immediately after such Revolving Credit
Borrowing, Swing Line Borrowing or Term Loan Borrowing, as the case may be, (i)
the aggregate outstanding principal amount of the Revolving Credit Loans of each
Bank (together with, in the case of the Swing Line Lender, the aggregate
outstanding principal amount of all Swing Line Loans) will not exceed the amount
of its Revolving Credit Commitment and (ii) the aggregate outstanding principal
amount of the Term Loans will not exceed the aggregate amount of the Term Loan
Commitments of all of the Banks as of such date.
Each Revolving Credit Borrowing, Swing Line Borrowing and Term Loan Borrowing
hereunder shall be deemed to be a representation and warranty by the Borrower on
the date of such Revolving Credit Borrowing, Swing Line Borrowing or Term Loan
Borrowing, as the case may be, as to the truth and accuracy of the facts
specified in clauses (b), (c), (d) and (e) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, except where a failure to be so qualified would not have a
Material Adverse Effect and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where a failure to have any such license,
authorization, consent or approval would not have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Loan Parties of
this Agreement, the Notes and the other Loan Documents (i) are within the Loan
Parties' corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) require no authorization, consent, approval of or action
by or in respect of, or filing with, any governmental body, agency or official,
(iv) do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of any Loan Party or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower or any of its Subsidiaries, and (v)
do not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries, except in favor of the Collateral Agent,
the Agent and the Banks as provided in the Loan Documents.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower enforceable in accordance with its terms,
and the Notes and the other Loan Documents, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
each of the Loan Parties that are a party thereto enforceable in accordance with
their respective terms, provided that the enforceability hereof and thereof is
subject in each case to general principles of equity and to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally.
SECTION 4.04. Financial Information. (a) The consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of June 30, 1998 and
the related consolidated statements of income, shareholders' equity and cash
flows for the Fiscal Year then ended, reported on by Arthur Andersen LLP, copies
of which have been delivered to each of the Banks, and the unaudited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries for the Fiscal Quarter ended December 31, 1998, copies of which
have been delivered to each of the Banks, fairly present, in conformity with
GAAP, the consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated, except, in the case of the unaudited
quarterly financial statements, for normal year-end adjustments and the addition
of footnotes and there are no material liabilities or unusual forward
obligations that are not set forth therein. The consolidated balance sheet of
the Acquired Entity Group as of December 31, 1998 and the related consolidated
statements of income, shareholders' equity and cash flows for the fiscal year of
the Acquired Entity Group then ended, reported on by Ernst & Young, LLP, copies
of which have been delivered to the Agent and the Banks fairly present, in
conformity with GAAP, the consolidated financial position of the Acquired Entity
Group as of such date and their consolidated results of operations and cash
flows for such period stated.
(b) Since June 30, 1998, there has been no event, act, condition,
circumstance or occurrence having, or that could reasonably be expected to have
or cause, a Material Adverse Effect.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse Effect
or which in any manner draws into question the validity or enforceability of, or
could materially impair the ability of any Loan Party to perform its obligations
under, this Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each
member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any unsatisfied
liability to the PBGC or a Plan under Title IV of ERISA.
(b) Other than Cadmus Journal Services, Inc.'s obligation to
contribute to the "CWA/ITU Negotiated Pension Plan" for its employees who are
Communications Workers of America, ITU #70 union members, neither the Borrower
nor any member of the Controlled Group is or within the prior 5 years has been
obligated to contribute to any Multiemployer Plan. Neither the Borrower nor any
member of the Controlled Group has incurred any withdrawal liability with
respect to any Multiemployer Plan under Title IV of ERISA, and no such liability
is expected to be incurred.
SECTION 4.07. Taxes. There have been filed on behalf of the
Borrower and its Subsidiaries all Federal, state and local income, excise,
property and other tax returns which are required to be filed by them and all
taxes due pursuant to such returns or pursuant to any assessment received by or
on behalf of the Borrower or any Subsidiary have been paid. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate. United States income tax returns of the Borrower and its
Subsidiaries (excluding the Acquired Entity Group) have been examined and closed
through the Fiscal Year ended June 30, 1997.
SECTION 4.08. Subsidiaries. Each of the Borrower's Significant
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly qualified
to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, except where a failure to be in good standing
or so qualified would not have a Material Adverse Effect, and has all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where a failure to
have any such license, authorization, consent or approval would not have a
Material Adverse Effect. As of the Closing Date, the Borrower has no
Subsidiaries except those Subsidiaries listed on Schedule 4.08. Each Compliance
Certificate delivered by the Borrower pursuant to Section 5.01(c) sets forth the
complete name and jurisdiction of the incorporation of each Subsidiary of the
Borrower created, formed or acquired during the time period covered by the
financial statements applicable to such Compliance Certificate. Schedule 4.08
and such Compliance Certificates accurately set forth each such Subsidiary's
complete name and jurisdiction of incorporation.
SECTION 4.09. Not an Investment Company. Neither the Borrower nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the Borrower
and its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 5.09.
SECTION 4.12. No Default. Neither the Borrower nor any of its
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true, accurate and complete in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. The Borrower has disclosed to the Banks in writing any and all facts
which could have or cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters. (a) Neither the Borrower nor
any Subsidiary is subject to any Environmental Liability which is reasonably
likely to have a Material Adverse Effect and, except as disclosed on Schedule
4.14, neither the Borrower nor any Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA. None of the Properties has been identified on any current or proposed
(i) National Priorities List under 40 C.F.R. ss. 300, (ii) CERCLIS list or (iii)
any list arising from a state statute similar to CERCLA.
(b) Except as disclosed on Schedule 4.14, no Hazardous Materials
have been or are being used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed or otherwise handled at, or
shipped or transported to or from the Properties or are otherwise present at,
on, in or under the Properties, or, to the best of the knowledge of the
Borrower, at or from any adjacent site or facility, except for Hazardous
Materials, such as inks, other chemicals used in printing operations, cleaning
solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, and managed or
otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements.
(c) The Borrower, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses, except where a failure to
procure an Environmental Authorization or a failure to comply with an
Environmental Requirement would not, singly or in the aggregate, have a Material
Adverse Effect.
SECTION 4.15. Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all applicable laws, including, without
limitation, all Environmental Laws, except where any failure to comply with any
such laws would not, alone or in the aggregate, have a Material Adverse Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of the Borrower and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including, but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. The issued shares of
Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by the
Borrower, directly or indirectly, free and clear of any Lien or adverse claim,
except for the Liens provided in the Pledge Agreement. At least a majority of
the issued shares of capital stock of each of the Borrower's other Subsidiaries
(other than Wholly Owned Subsidiaries) is owned by the Borrower, directly or
indirectly, free and clear of any Lien or adverse claim, except for the Liens
provided in the Pledge Agreement.
SECTION 4.17. Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Term Loan, Swing Line Loan or Revolving Credit Loan will be used
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock, or be used for any purpose
which violates, or which is inconsistent with, the provisions of Regulations T,
U or X of the Board of Governors of the Federal Reserve System.
SECTION 4.18. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of the Term Loans, Swing Line
Loans and Revolving Credit Loans under this Agreement, the Borrower will not be
"insolvent," within the meaning of such term as used in O.C.G.A. ss. 18-2-22 or
as defined in ss. 101 of Title 11 of the United States Code or Section 2 of the
Uniform Fraudulent Transfer Act, or any other applicable state law pertaining to
fraudulent transfers, as each may be amended from time to time, or be unable to
pay its debts generally as such debts become due, or have an unreasonably small
capital to engage in any business or transaction, whether current or
contemplated.
SECTION 4.19. Compliance with Year 2000 Plan. The Borrower has
developed and has delivered to the Agent a comprehensive plan (the "Y2K Plan")
for ensuring that the Borrower's and its Subsidiaries' software and hardware
systems material to the business operations of the Borrower and its Subsidiaries
will be Year 2000 Compliant and Ready. The Borrower and its Subsidiaries have
met the Y2K Plan milestones such that all material hardware and software systems
will be Year 2000 Compliant and Ready in accordance with the Y2K Plan, except
where a failure to meet any such milestone would not have a Material Adverse
Effect.
SECTION 4.20. Acquisition Agreement, Sale Agreement, Subordinated
Debt Documents and Seller Securities.
(a) The Borrower has provided to the Agent a complete and correct
copy of the Acquisition Agreement. All of the representations and warranties of
the Borrower and, to the best of the Borrower's knowledge, each other party
thereto in the Acquisition Agreement are true and correct in all material
respects as of the date of this Agreement as if given as of the date of this
Agreement. No party to the Acquisition Agreement has given notice of any breach
of its representations, warranties or covenants therein, other than any notice
given after the Closing Date and a copy of which has been delivered to the Agent
and the Banks. All of the representations and warranties of the Borrower in this
Article IV shall be deemed to be given after giving effect to the consummation
of the Pending Acquisition.
(b) The Borrower has provided to the Agent a complete and correct
copy of the Sale Agreement. All of the representations and warranties of the
Borrower and, to the best of the Borrower's knowledge, each other party thereto
in the Sale Agreement are true and correct in all material respects as of the
date of this Agreement as if given as of the date of this Agreement. No party to
the Sale Agreement has given notice of any breach of its representations,
warranties or covenants therein, other than any notice given after the Closing
Date and a copy of which has been delivered to the Agent and the Banks. All of
the representations and warranties of the Borrower in this Article IV shall be
deemed to be given after giving effect to the consummation of the CFC Sale.
(c) The Borrower has provided to the Agent and Banks a complete
and correct copy of each of the Subordinated Debt Documents. All of the
representations and warranties of the Borrower in the Subordinated Debt
Documents are true and correct in all material respects as of the date of this
Agreement as if given as of the date of this Agreement, and no default or event
of default exists thereunder or will exist after giving effect to the making of
any Revolving Credit Loan, Term Loan or Swing Line Loan under this Agreement. No
Subordinated Debt Document has been amended or modified, and no provisions
thereof have been waived (except as expressly permitted by this Agreement). All
Obligations of the Loan Parties under this Agreement and the other Loan
Documents are "Senior Debt" within the meaning of, and are entitled to the
benefits of, the subordination provisions contained in the Subordinated Debt
Documents.
(d) The Borrower has provided to the Agent and the Banks a
complete and correct copy of: (1) the form of the Mack/Seller Promissory Notes
and the Seller Securities and (2) each note, security, instrument, agreement,
opinion, certificate and other document executed or delivered pursuant thereto
or in connection therewith that has been requested by the Agent or any Bank. All
of the representations and warranties of the Borrower in the Mack/Seller
Promissory Notes and Seller Securities or in any document, instrument or
agreement executed or delivered pursuant thereto or in connection therewith are
true and correct in all material respects as of the date of this Agreement as if
given as of the date of this Agreement, and no default or event of default
exists thereunder or will exist after giving effect to the making of any
Revolving Credit Loan, Term Loan or Swing Line Loan under this Agreement.
Neither the Seller Securities, the Mack/Seller Promissory Notes nor any
instrument, agreement or other document executed or delivered pursuant thereto
or in connection therewith has been amended or modified and no provisions
thereof have been waived (except as expressly permitted by this Agreement). All
obligations of the Loan Parties under this Agreement and the other Loan
Documents are "Senior Debt" within the meaning of, and are entitled to the
benefits of, the subordination provisions contained in the Mack/Seller
Promissory Notes or in any instrument, agreement or other document executed or
delivered pursuant thereto or in connection therewith or are otherwise senior
and superior in right and time of payment to any Debt under the Mack/Seller
Promissory Notes or any instrument, agreement or other document executed
pursuant thereto or in connection therewith.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Revolving
Credit Commitment or Term Loan Commitment hereunder or any amount payable under
any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated and consolidating balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such Fiscal
Year, the related consolidated and consolidating statements of income and
shareholders' equity and the related consolidated statement of cash flows for
such Fiscal Year, setting forth in each case in comparative form the figures for
the previous fiscal year, all certified by Arthur Anderson LLP or other
independent public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Required Banks;
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter, the related
consolidated and consolidating statement of income and the related consolidated
statement of cash flows for such Fiscal Quarter and for the portion of the
Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case
in comparative form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the previous Fiscal Year, all certified (subject to
normal year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer, the chief accounting officer or the
treasurer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate,
substantially in the form of Exhibit G (a "Compliance Certificate"), of the
chief financial officer, the chief accounting officer or the treasurer of the
Borrower (i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Sections 5.03 through 5.10, inclusive, 5.13, 5.23, 5.24, 5.27, 5.29 and 5.33 on
the date of such financial statements; (ii) identifying the complete name and
jurisdiction of incorporation of each Subsidary of the Borrower created, formed
or acquired during the time period covered by such financial statements; (iii)
identifying the Subsidiaries comprising the Significant Subsidiary Group and
setting forth the calculations, financial information and other data supporting
such determination; and (iv) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements to the effect
that nothing has come to their attention to cause them to believe that any
Default existed on the date of such financial statements;
(e) within 5 Domestic Business Days after the Borrower becomes
aware of the occurrence of any Default, a certificate of the chief financial
officer, the chief accounting officer or the treasurer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly or monthly reports (other than
reports on Forms 3, 4 or 5) which the Borrower shall have filed with the
Securities and Exchange Commission;
(h) if and when the Borrower or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy of
such notice;
(i) promptly after the Borrower knows of the commencement
thereof, notice of any litigation, dispute or proceeding involving a claim
against the Borrower and/or any Subsidiary for $5,000,000 or more in excess of
amounts covered in full by applicable insurance;
(j) within 10 Business Days after the Borrower becomes aware that
any Y2K Plan milestone has not been met or that compliance with the Y2K Plan
will be delayed or not achieved and that such failure to meet a Y2K Plan
milestone or failure to comply with the Y2K Plan could reasonably be expected to
have a Material Adverse Effect, a statement of the chief executive officer,
treasurer, chief financial officer or chief technology officer of the Borrower
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto.
(k) promptly upon the receipt thereof, a copy of any third party
assessments of the Borrower's Y2K Plan together with any recommendations made by
such third party with respect to Year 2000 compliance;
(l) promptly after the furnishing thereof, copies of any
statement, notice or report furnished by any party pursuant to the terms of the
Subordinated Debt Documents or the Mack/Seller Promissory Notes and not
otherwise required to be furnished to the Banks pursuant to any clause of this
Section; and
(m) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The
Borrower will (i) keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities; and (ii) permit, and will cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense prior to the occurrence of an
Event of Default and at the Borrower's expense after the occurrence of an Event
of Default to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Borrower agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable times
and as often as may reasonably be desired; provided the Borrower receives
reasonable prior notice of such visit or inspection.
SECTION 5.03. Maximum Total Leverage Ratio. The Borrower shall
not suffer or permit the Total Leverage Ratio at any time during each period set
forth in the chart below to exceed the applicable ratio set forth opposite such
period.
Fiscal Quarter Ending During the Period: Total Leverage Ratio:
---------------------------------------- ---------------------
Closing Date through 6/30/00 4.25 to 1.00
7/1/00 through 6/30/01 3.75 to 1.00
7/1/01 through 6/30/02 3.50 to 1.00
7/1/02 and thereafter 3.00 to 1.00
SECTION 5.04. Maximum Senior Leverage Ratio. The Borrower shall
not suffer or permit the Senior Leverage Ratio at any time during each period
set forth in the chart below to exceed the applicable ratio set forth opposite
such period.
Fiscal Quarter Ending During the Period: Senior Leverage Ratio:
---------------------------------------- ----------------------
Closing Date through 6/30/99 2.50 to 1.00
7/1/99 through 6/30/00 2.25 to 1.00
7/1/00 through 6/30/01 2.00 to 1.00
7/1/01 through 6/30/02 1.75 to 1.00
7/1/02 and thereafter 1.50 to 1.00
SECTION 5.05. Minimum Consolidated Net Worth. Consolidated Net
Worth will at no time be less than the amount determined by the following
computation: (a) the sum of (1) 90% of Consolidated Net Worth, determined as of
December 31, 1998 as set forth on the Pro-Forma Financial Statements
($125,986,500), plus (2) the sum of (i) 100% of the cumulative Net Proceeds of
Capital Stock received during any period after the Closing Date, calculated
quarterly, and (ii) 75% of the cumulative Reported Net Income of the Borrower
and its Consolidated Subsidiaries during any period after December 31, 1998
(taken as one accounting period), calculated quarterly but excluding from such
calculations of Reported Net Income for purposes of this clause (ii) any quarter
in which the Consolidated Net Income of the Borrower and its Consolidated
Subsidiaries is negative, less (b) an amount, which shall not exceed $5,000,000,
equal to the after-tax charges of the Borrower for restructuring and/or
integration charges incurred by the Borrower in connection with the transactions
described in the Acquisition Agreement. As used herein, the term "Pro-Forma
Financial Statements" shall mean the unaudited consolidated financial statements
of the Borrower and its Consolidated Subsidiaries for the period ended December
31, 1999, as adjusted on a pro forma basis to reflect the Pending Acquisition,
the acquisition of Dynamic Diagrams, Inc.; the Cadmus Custom Publishing, Inc.
transaction and the CFC Sale.
SECTION 5.06. Fixed Charge Coverage. As of the last day of any
Fiscal Quarter ending during each period set forth in the chart below, the
Borrower shall not suffer or permit the Fixed Charge Coverage Ratio to be less
than the applicable ratio set forth opposite such period.
Fiscal Quarter Ending During the Period: Fixed Charge Coverage Ratio:
---------------------------------------- ----------------------------
Period:
-------
Closing Date through 6/30/00 1.30 to 1.00
7/1/00 through 6/30/01 1.40 to 1.00
7/1/01 through 6/30/02 1.50 to 1.00
7/1/02 through 6/30/03 1.60 to 1.00
7/1/03 and thereafter 1.75 to 1.00
Notwithstanding the foregoing, if at any time after the last day of the Fiscal
Quarter ending July 1, 2001, the outstanding principal balance of the Term Loans
is equal to or less than $35,000,000.00, then as of the last day of any Fiscal
Quarter ending during each period set forth in the chart below, the Borrower
shall not suffer or permit the Fixed Charge Coverage Ratio to be less than the
applicable ratio set forth opposite such period.
Fiscal Quarter Ending During the Period: Fixed Charge Coverage Ratio:
---------------------------------------- ----------------------------
July 1, 2001 - June 30, 2002 1.75 to 1.00
July 1, 2002 - and thereafter 2.75 to 1.00
SECTION 5.07 Loans or Advances. Neither the Borrower nor any of
its Subsidiaries shall make loans or advances to any Person except: (i) loans or
advances to employees made in the ordinary course of business and consistently
with practices existing on June 30, 1998, in an aggregate outstanding principal
amount that does not exceed at any time 1/2 of 1% of Consolidated Total Assets;
(ii) deposits required by government agencies or public utilities; (iii) loans
or advances to Subsidiaries; (iv) loans or advances to Persons not permitted
under clauses (i), (ii) or (iii) of this Section if immediately after giving
effect to such loans or advances not permitted under clauses (i), (ii) or (iii)
of this Section, the aggregate amount of all such loans or advances made
pursuant to this Section 5.07(iv) does not exceed $1,000,000 provided that after
giving effect to the making of any loans, advances or deposits permitted by
clause (i), (ii), (iii) or (iv) of this Section, no Default shall have occurred
and be continuing.
SECTION 5.08. Investments. Neither the Borrower nor any of its
Subsidiaries shall make Investments in any Person except as permitted by Section
5.07 and except Investments (i) in Guarantors, (ii) in direct obligations of the
United States Government maturing within one year, (iii) in certificates of
deposit issued by a commercial bank whose long term certificates of deposit are
rated at least A or the equivalent thereof by Standard & Poor's Corporation or
A2 or the equivalent thereof by Moody's Investors Service, Inc., (iv) in
commercial paper rated A-1 or the equivalent thereof by Standard & Poor's
Corporation or P-1 or the equivalent thereof by Moody's Investors Service, Inc.
and in either case maturing within 6 months after the date of acquisition; (v)
in tender bonds the payment of the principal of and interest on which is fully
supported by a letter of credit issued by a United States bank whose long-term
certificates of deposit are rated at least AA or the equivalent thereof by
Standard & Poor's Corporation and AA or the equivalent thereof by Moody's
Investors Service, Inc.; (vi) constituting Permitted Acquisitions; and/or (vii)
not permitted under Sections 5.08(i) through (vi) if immediately after giving
effect to such Investments not permitted under Sections 5.08(i) through (vi),
the aggregate amount of all such Investments made pursuant to this Section 5.08
(vii) does not exceed $5,000,000.
SECTION 5.09. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount not
exceeding $5,000,000;
(b) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring or
constructing such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition or completion of
construction thereof;
(c) Liens securing Debt owing by any Subsidiary to the Borrower
or to a Wholly-Owned Subsidiary;
(d) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that (i) such Debt is not secured by any
additional assets, and (ii) the amount of such Debt secured by any such Lien is
not increased;
(e) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in the
aggregate materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(f) Liens securing taxes, assessments or other similar
governmental charges or levies which are not yet due and payable;
(g) Liens securing Obligations;
(h) Liens on Securitization Assets sold or transferred pursuant
to a Permitted Securitization; and
(i) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt (other than indebtedness represented by the Notes) in
an aggregate principal amount at any time outstanding not to exceed $15,000,000.
SECTION 5.10. Limitation on Debt. The Borrower shall not, nor
shall it permit any Subsidiary to, incur, create, issue, assume or permit to
exist any Consolidated Senior Debt other than (a) Consolidated Senior Debt
reflected on the financial statements referred to in Section 4.04(a) for the
Fiscal Quarter ended December 31, 1998 and any and all extensions and renewals
of such Consolidated Senior Debt so long as the principal amount thereof is not
increased, (b) Consolidated Senior Debt set forth on Schedule 5.10 hereto and
any and all extensions and renewals of such Consolidated Senior Debt so long as
the principal amount thereof is not increased, (c) Consolidated Senior Debt
arising under letters of credit in a maximum aggregate face amount of
$3,000,000, at any time outstanding, which letters of credit secure the
potential obligations and liabilities of the Borrower and its Subsidiaries in
connection with workers compensation claims; (d) Consolidated Senior Debt
arising under letters of credit in a maximum aggregate face amount of
$5,000,000, at any time outstanding, which letters of credit secure the
potential obligations and liabilities of the Borrower and its Subsidiaries in
connection with the purchase of production equipment during the manufacture and
delivery of such equipment; and (e) Consolidated Senior Debt in a maximum amount
of $5,000,000, at any time outstanding, arising under capital leases.
SECTION 5.11. Maintenance of Existence. The Borrower shall, and
shall cause each Significant Subsidiary to, except as permitted by Section 5.13,
maintain its corporate existence and carry on its business in substantially the
same manner and in substantially the same fields as such business is now carried
on and maintained.
SECTION 5.12. Dissolution. Neither the Borrower nor any of its
Significant Subsidiaries shall suffer or permit dissolution or liquidation
either in whole or in part or redeem or retire any shares of its own stock or
that of any Subsidiary, except through corporate reorganization to the extent
permitted by Section 5.13.
SECTION 5.13. Consolidations, Mergers and Sales of Assets. The
Borrower will not, nor will it permit any Significant Subsidiary to, consolidate
or merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets (including, without limitation, any of its
Subsidiaries) to, any other Person, or discontinue or eliminate any business
line or segment, provided that (a) the Borrower or a Subsidiary may merge with
another Person if (i) such Person was organized under the laws of the United
States of America or one of its states, (ii) the Borrower or the Subsidiary, as
the case may be, is the corporation surviving such merger and (iii) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing, (b) Subsidiaries of the Borrower may merge with the Borrower or one
another, provided the conditions set forth in Section 5.13(a)(i) and (iii) are
satisfied, and in the case of a merger with the Borrower, the Borrower is the
corporation surviving such merger, (c) the foregoing limitation on the sale,
lease or other transfer of assets (including, without limitation, the sale or
transfer of a Subsidiary) and on the discontinuation or elimination of a
business line or segment shall not prohibit, during any Fiscal Quarter, a sale
or transfer of assets (including, without limitation, the sale or transfer of a
Subsidiary) or the discontinuance or elimination of a business line or segment
(in a single transaction or in a series of related transactions) unless the
aggregate assets to be so sold or transferred or utilized in a business line or
segment to be so discontinued, when combined with all other assets sold or
transferred, and all other assets utilized in all other business lines or
segments discontinued, during such Fiscal Quarter and the immediately preceding
three Fiscal Quarters (excluding, however, for purposes of this clause (c)
sales, contributions or other transfers of Securitization Assets permitted by
clause (d) below and the CFC Sale) either (x) contributed more than 5% of
Consolidated EBITDA during the 4 consecutive Fiscal Quarters immediately
preceding such Fiscal Quarter, or (y) constituted more than 5% of Consolidated
Total Assets at the end of such Fiscal Quarter, and (d) the Borrower and its
Participating Subsidiaries may sell, contribute and make other transfers of
Securitization Assets pursuant to the Securitization Documents under a Permitted
Securitization.
SECTION 5.14. Use of Proceeds. (a) No portion of the proceeds of
the Term Loans, Swing Line Loans and Revolving Credit Loans will be used by the
Borrower or any Subsidiary (i) in connection with, either directly or
indirectly, any tender offer for, or other acquisition of, stock of any
corporation with a view towards obtaining control of such other corporation
(other than in connection with the Pending Acquisition or an acquisition that
constitutes a Permitted Acquisition), (ii) directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any Margin Stock, or (iii) for any purpose in violation of any applicable law or
regulation. If requested at any time by any Bank, the Borrower will furnish to
the Agent and each such Bank a statement in conformity with the requirements of
FR Form U-1 referred to in Regulation U of the Board of Governors of the Federal
Reserve System of the United States as now and from time to time hereafter in
effect.
(b) The proceeds of the Term Loans, Swing Line Loans and
Revolving Credit Loans shall be used exclusively by the Borrower (i) to
refinance existing indebtedness of the Borrower under the Existing Credit
Agreement; (2) to finance the Pending Acquisition (including, without
limitation, the payment of indebtedness of the Acquired Entity or subsidiaries
of the Acquired Entity), (iii) to finance Permitted Acquisitions or (iv) for
general corporate purposes.
SECTION 5.15. Compliance with Laws; Payment of Taxes. (a) The
Borrower will, and will cause each of its Subsidiaries and each member of the
Controlled Group to, comply in all material respects with applicable laws
(including but not limited to ERISA), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. The Borrower will, and will cause
each of its Subsidiaries to, pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of the Borrower or
any Subsidiary, except liabilities being contested in good faith by appropriate
proceedings diligently pursued and against which, if requested by the Agent, the
Borrower shall have set up reserves in accordance with GAAP.
(b) The Borrower shall not permit the aggregate complete or partial
withdrawal liability under Title IV of ERISA with respect to Multiemployer Plans
incurred by the Borrower and members of the Controlled Group to exceed
$1,000,000 at any time. For purposes of this Section 5.15(b), the amount of
withdrawal liability of the Borrower and members of the Controlled Group at any
date shall be the aggregate present value of the amount claimed to have been
incurred less any portion thereof which the Borrower and members of the
Controlled Group have paid or as to which the Borrower reasonably believes,
after appropriate consideration of possible adjustments arising under Sections
4219 and 4221 of ERISA, it and members of the Controlled Group will have no
liability, provided that the Borrower shall obtain prompt written advice from
independent actuarial consultants supporting such determination. The Borrower
agrees (i) once in each year, beginning with 1999, to request and obtain a
current statement of the withdrawal liability of the Borrower and members of the
Controlled Group from each Multiemployer Plan, if any, and (ii) to transmit a
copy of such statement to the Agent and the Banks within fifteen (15) days after
the Borrower receives the same.
SECTION 5.16. Insurance. The Borrower will maintain, and will
cause each of its Subsidiaries to maintain (either in the name of the Borrower
or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its Property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
SECTION 5.17. Change in Fiscal Year. The Borrower will not change
its Fiscal Year without the consent of the Required Banks.
SECTION 5.18. Maintenance of Property. The Borrower shall, and
shall cause each Subsidiary to, maintain all of its properties and assets
material to its business in good condition, repair and working order, ordinary
wear and tear excepted.
SECTION 5.19. Environmental Notices. The Borrower shall furnish
to the Banks and the Agent prompt written notice of all Environmental
Liabilities, pending, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental
Releases at, on, in, under or in any way affecting the Properties or any
adjacent property, and all facts, events, or conditions that could lead to any
of the foregoing.
SECTION 5.20. Environmental Matters. The Borrower and its
Subsidiaries will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at, or
otherwise handle or ship or transport to or from the Properties any Hazardous
Materials except for: (1) Hazardous Materials such as inks, other chemicals used
in printing operations, cleaning solvents, pesticides and other similar
materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed, managed or otherwise handled in the ordinary course of
business in compliance with all applicable Environmental Requirements; and(2)
the trichloroethylene that is being remediated at the property commonly known as
3575 Hempland Road, Lancaster, Pennsylvania, as described on Schedule 4.14.
SECTION 5.21. Environmental Release. The Borrower agrees that
upon the occurrence of an Environmental Release at or on any of the Properties
it will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not ordered
or otherwise directed to do so by any Environmental Authority.
SECTION 5.22. Transactions with Affiliates. Neither the Borrower
nor any of its Subsidiaries shall enter into, or be a party to, any transaction
with any Affiliate of the Borrower or such Subsidiary (which Affiliate is not
the Borrower or a Subsidiary), except as permitted by law and in the ordinary
course of business, and pursuant to terms which are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 5.23. Significant Subsidiaries. (a) The Borrower shall
cause any Person which becomes a Significant Subsidiary after the Closing Date
to become a party to, and agree to be bound by the terms of, the Guaranty
pursuant to an instrument in form and substance satisfactory to the Agent
executed and delivered to the Collateral Agent within ten (10) Domestic Business
Days after the day on which such Person became a Significant Subsidiary. The
Borrower shall also cause the items specified in Section 3.01(c) and (f) to be
delivered to the Collateral Agent concurrently with the instrument referred to
above, modified appropriately to refer to such instrument and such Significant
Subsidiary.
(b) The Borrower shall, or shall cause any Subsidiary (the
"Pledgor Subsidiary") to, pledge 100% of the shares of capital stock owned by
the Borrower or such Pledgor Subsidiary in any Person which becomes a
Significant Subsidiary after the Closing Date pursuant to a pledge agreement in
form and substance substantially identical to the Pledge Agreement executed and
delivered by the Borrower or such Pledgor Subsidiary to the Collateral Agent
within ten (10) Domestic Business Days after the day on which such Person became
a Significant Subsidiary and shall deliver to the Collateral Agent such shares
of capital stock together with stock powers executed in blank. The Borrower
shall also cause the items specified in Section 3.01(c) and (f) to be delivered
to the Agent concurrently with the pledge agreement referred to above, modified
appropriately to refer to such pledge agreement and such Significant Subsidiary.
(c) Once any Subsidiary becomes a Significant Subsidiary and
therefore becomes a party to the Guaranty in accordance with Section 3.01(g) or
Section 5.23(a) or any shares of capital stock of such Subsidiary are pledged to
the Agent in accordance with Sections 3.01(i), Section 3.01(j) or Section
5.23(b), such Subsidiary (including, without limitation, all initial Significant
Subsidiaries) thereafter shall remain a party to the Guaranty and the shares of
capital stock in such Subsidiary (including, without limitation, all initial
Significant Subsidiaries) shall remain subject to the pledge to the Collateral
Agent, as the case may be, even if such Significant Subsidiary ceases to be a
Significant Subsidiary.
SECTION 5.24 Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to purchase, lease or otherwise acquire (in a single
transaction or in a series of transactions), directly or indirectly: (i) all or
any substantial part of the assets or stock of any other Person; (ii) a business
line or segment of any other Person; or (iii) control of any other Person, if:
(A) the total amount expended, assumed or incurred by the Borrower and
Subsidiaries of the Borrower in connection with any such purchase, lease or
acquisition exceeds $25,000,000; or (B) the total amount expended, assumed or
incurred by the Borrower and Subsidiaries of the Borrower in connection with any
such purchase, lease or acquisition, when combined with the total amount
expended, assumed or incurred by the Borrower and Subsidiaries of the Borrower
in connection with all such other purchases, leases or acquisitions during the
current Fiscal Quarter and the immediately preceding three Fiscal Quarters
(excluding, however, for such calculation, the Pending Acquisition) exceeds
$50,000,000; provided that the Pending Acquisition shall be excluded from the
prohibition set forth in Section 5.24(A).
SECTION 5.25. Y2K Plan. The Borrower will meet the milestones
contained in the Y2K Plan and will have all material hardware and software
systems Year 2000 Compliant and Ready (including all internal and external
testing) on or before June 30, 1999, except where a failure to meet any such
milestone or a failure to be Year 2000 Compliant and Ready would not result in a
Material Adverse Effect.
SECTION 5.26. Subordinated Debt Documents and Seller Securities.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, redeem, purchase, discharge, pay, prepay or defease all or any
portion of the principal or interest of the Subordinated Debt, prior to the
indefeasible payment in full in cash of all Obligations, except that: (1) the
Borrower may pay interest on the Subordinated Debt in accordance with the
provisions of the Subordinated Debt Documents as in effect and in accordance
with the terms of the Subordinated Debt Documents as approved by the Agent and
the Banks pursuant to this Agreement, or as amended in accordance with the
provisions of Section 5.26(b) so long as no Event of Default then exists; and
(2) the Borrower may redeem and repay the Bridge Subordinated Debt with the
proceeds of the Take Out Subordinated Debt incurred pursuant to and in
accordance with Section 5.30. The Borrower shall not take any action in
violation of the provisions of the Subordinated Debt Documents pursuant to which
the indebtedness, liabilities and obligations evidenced by the Subordinated Debt
Documents are subordinated and made junior to the Revolving Credit Loans, Term
Loans, Swing Line Loans and all of the other Obligations (including, without
limitation, any violation of Article X of the Bridge Subordinated Indentures,
Section 9 of the Bridge Subordinated Notes and any other similar or comparable
provisions contained in the other Subordinated Debt Documents). The Borrower
shall not permit any Subsidiary to take any action which shall result in
violation of the provisions of the Subordinated Debt Documents pursuant to which
the indebtedness, liabilities and obligations evidenced by the Subordinated Debt
Documents are subordinated and made junior to the Revolving Credit Loans, Term
Loans, Swing Line Loans and all of the other Obligations (including, without
limitation, any violation of Article XII of the Bridge Subordinated Indentures
and any other similar or comparable provisions contained in the other
Subordinated Debt Documents).
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, amend, alter or modify, or consent to or suffer any amendment,
alteration or modification of, the Subordinated Debt Documents without the prior
written consent of the Required Banks, if such amendment, alteration or
modification adversely affects the subordination provisions thereof or imposes
any more onerous term or condition on the Borrower or any of its Subsidiaries
than is contained in such agreement, note or document as of the date hereof or
is otherwise in any way adverse to the Borrower, any of its Subsidiaries or the
Banks. The Borrower shall deliver to the Agent and the Banks notice and a copy
of any proposed amendment, alteration or modification which, in the opinion of
the Borrower, does not affect the subordination provisions of any such
agreement, note or document or impose any more onerous term or condition on the
Borrower or any of its Subsidiaries than is contained in such agreement, note or
document as of the date hereof and is not otherwise in any way adverse to the
Borrower, any of its Subsidiaries or the Banks, at least 10 Domestic Business
Days prior to the effective date of such proposed amendment, alteration or
modification and, if at least three (3) Domestic Business Days prior to the
effective date of such amendment, alteration or modification, the Requesting
Banks shall deliver notice to the Agent and the Borrower stating that, in the
opinion of such Requesting Banks (rendered in their sole discretion), such
proposed amendment, alteration or modification requires the approval of the
Required Banks, the Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into such amendment, alteration or modification without
the prior written consent of the Required Banks.
SECTION 5.27. Limitation on Sale/Leaseback Transactions. The
Borrower shall not, nor shall it permit any Subsidiary to, enter into any
Sale/Leaseback Transaction, except for Permitted Sale/Leaseback Transactions.
SECTION 5.28. No Restrictive Agreement. The Borrower will not,
nor will it permit any of its Subsidiaries to, enter into, after the date of
this Agreement, any indenture, agreement, instrument or other arrangement (other
than the Subordinated Debt Documents) that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, any of the following by the Borrower or any
Subsidiary: the incurrence or payment of Debt, the granting of Liens, the
declaration or payment of dividends or other distributions in respect of Stock
of the Borrower or any Subsidiary, the making of loans, advances or Investments
or the sale, assignment, transfer or other disposition of property, real,
personal or mixed, tangible or intangible; provided, however, that any such
indenture, agreement, instrument or other arrangement executed and delivered by
the Borrower for the sole purpose of financing the acquisition of assets of the
Borrower may impose materially adverse conditions upon the sale, assignment,
transfer or other disposition of the assets being financed pursuant to such
indenture, agreement, instrument or other arrangement.
SECTION 5.29. Casualty and Condemnation.
(a) The Borrower will furnish to the Agent and the Banks prompt
written notice of any casualty or other insured damage to any of the real
property or personal property of the Borrower or any Subsidiary occurring in any
Fiscal Year resulting in gross proceeds in excess of $250,000 or, when
aggregated with all other casualties or damage which shall have previously
occurred in such Fiscal Year, in excess of $250,000, or the commencement of any
action or proceeding for the taking of any of the real property or personal
property of the Borrower or any Subsidiary or any part thereof or interest
therein under power of eminent domain or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in cash proceeds (whether in the form of insurance proceeds,
condemnation awards or otherwise), the Borrower or such Subsidiary shall utilize
such cash proceeds to pay the costs of repairing, restoring or replacing the
affected property in accordance with paragraph (c) of this Section, unless the
Borrower elects not to replace, restore or repair such property.
(c) If any cash proceeds have not been utilized to replace,
restore or repair such property on that date that is nine months after the
occurrence of the event resulting in such cash proceeds or if the Borrower
elects not to replace, repair or restore the affected property, then, to the
extent required under Section 5.29(a), such cash proceeds shall be applied to
the reduction of the Term Loan Commitments as provided in Section 2.08(c)(3).
SECTION 5.30. Take Out Subordinated Debt. (a) The Borrower
acknowledges that it intends to repay in full the entire outstanding principal
balance (together with accrued unpaid interest thereon) of the Bridge
Subordinated Debt with the proceeds of the Take Out Subordinated Debt. In order
to be deemed "Take Out Subordinated Debt" and included within the definition of
"Subordinated Debt" under this Agreement, such Debt must satisfy all of the
following conditions: (1) subject to the terms of Section 5.30(a)(2), the Net
Take Out Proceeds shall be used exclusively to repay the outstanding principal
balance (together with accrued unpaid interest thereon) of the Bridge
Subordinated Debt; provided, that if the Net Take Out Proceeds are insufficient
to repay in full the Bridge Subordinated Debt, no subsequent Debt, issued more
than thirty days after the issuance of such Take Out Subordinated Debt, shall be
deemed Take Out Subordinated Debt hereunder; (2) the amount by which the Net
Take Out Proceeds exceeds the entire outstanding principal balance (together
with accrued unpaid interest thereon) of the Bridge Subordinated Debt, if any,
shall be applied to prepay: (i) if the Net Take Out Proceeds are equal to or
less than $125,000,000, the Revolving Credit Loans of the several Banks ratably
(provided that there will be no corresponding reduction in the Revolving Credit
Commitments); and (ii) if the Net Take Out Proceeds are greater than
$125,000,000: (A) the Revolving Credit Loans of the several Banks shall be
prepaid ratably in an aggregate amount equal to: (1) $125,000,000, less (2) the
entire outstanding principal balance (together with accrued unpaid interest
thereon) of the Bridge Subordinated Debt (provided that there will be no
corresponding reduction in the Revolving Credit Commitments); and (B) the Term
Loans of the several Banks shall be prepaid ratably in an aggregate amount equal
to: (1) the aggregate Net Take Out Proceeds, less (2) $125,000,000 (provided
that there shall be a corresponding reduction in the Term Loan Commitments
pursuant to Section 2.08(b)(3)); (3) the Take Out Subordinated Debt shall not
bear a rate of interest in excess of 14% per annum; (4) the Borrower shall take
any and every action necessary or desirable, to the extent within the power of
the Borrower, to issue (or cause the issuance) of Take Out Subordinated Debt,
pursuant to a public offering or an offering under Rule 144A promulgated under
the Securities Act of 1933 in an amount sufficient to repay the Bridge
Subordinated Debt in full; (5) the Agent and each of the Banks shall receive
copies of the final, executed Subordinated Debt Documents evidencing or executed
in connection with the Take Out Subordinated Debt within five Domestic Business
Days after the issuance of the Take Out Subordinated Debt and the Agent and each
of the Banks shall receive such other agreements, documentation and information
as the Agent and the Banks shall reasonably request; (6) the Take Out
Subordinated Debt shall be issued on the terms and conditions that fully comply
with the terms and conditions set forth in 5.30(b) set forth below; and (7) all
costs of the Agent and the Banks incurred in connection with their review of the
Take Out Subordinated Debt and the Subordinated Debt Documents to be executed
and/or delivered in connection with the Take Out Subordinated Debt shall be paid
by the Borrower, including, without limitation, reasonable attorneys' fees. As
used herein, "Net Take Out Proceeds" means any and all proceeds received by the
Borrower in respect of the Take Out Subordinated Debt, after deducting therefrom
all reasonable and customary costs and expenses (including, but not limited to,
customary underwriter's, initial purchaser's or placement agent's discounts or
commissions) incurred by the Borrower directly in connection with the issuance
of such Take Out Subordinated Debt.
(b) The Borrower shall not incur, create, issue, assume or permit
to exist any Take Out Subordinated Debt without the prior written consent of the
Required Banks, if the Subordinated Debt Documents executed in connection with
the Take Out Subordinated Debt either: (1) differ in any material respect from
the terms and conditions contained in the Description of Take Out Notes in a
manner adverse to the Borrower or the Banks (including, without limitation, Take
Out Subordinated Debt that contains a material provision or term which is not
set forth in the Description of Take Out Notes, Take Out Subordinated Debt that
fails to contain a material provision or term which is set forth in the
Description of Take Out Notes, Take Out Subordinated Debt that imposes any
materially more onerous term or condition on the Borrower or any of its
Subsidiaries than is contained in the Description of Take Out Notes or Take Out
Subordinated Debt that is otherwise in any way more adverse to the Banks than is
contained in the Description of Take Out Notes); or (2) contain (or fail to
contain) any term or provision that adversely affects, in any respect, from the
perspective of the Agent and the Banks, the subordination provisions set forth
in the Description of Take Out Notes. The Borrower shall deliver to the Agent
and the Banks written notice and a copy of the Subordinated Debt Documents
proposed to be executed in connection with the Take Out Subordinated Debt at
least ten (10) Domestic Business Days prior to the proposed issuance of such
Take Out Subordinated Debt and if by 5:00 p.m. (Atlanta, Georgia time) five
Domestic Business Days after the day the Agent and Banks have received a
complete copy of such Subordinated Debt Documents, the Requesting Banks shall
deliver notice (a "Take Out Debt Notice") to the Agent and the Borrower stating
that, in the opinion of such Requesting Banks (rendered in their sole
discretion), the proposed Subordinated Debt Documents require the approval of
the Required Banks under the terms of this Section 5.30(b), the Borrower shall
not, and shall not permit any of its Subsidiaries to, enter into the
Subordinated Debt Documents to be executed in connection with the Take Out
Subordinated Debt, without the prior written consent of the Required Banks. In
the event that the Requesting Banks do not deliver a Take Out Debt Notice to the
Agent and Borrower by 5:00 p.m. (Atlanta, Georgia time) five Domestic Business
Days after the day the Agent and Banks have received a complete copy of the
Subordinated Debt Documents proposed to be executed in connection with the Take
Out Subordinated Debt, the terms set forth in such Subordinated Debt Documents
delivered to the Agent and Banks shall not require the approval of the Required
Banks under the terms of this Section 5.30(b).
SECTION 5.31. Grant of Lien and Security Interest in Assets. (A)
If the Rating Level is Level 2 on the Second Ratings Adjustment Date, then upon
the request of the Required Banks; and (B) upon the occurrence of an Automatic
Collateral Rights Event, without any act by the Agent or the Banks, the Borrower
shall and shall cause each Subsidiary of the Borrower to grant to the Collateral
Agent, on behalf of the Secured Parties, within thirty (30) days after the
earlier of such request by the Required Banks or the occurrence of such
Automatic Collateral Rights Event, a continuing lien upon and security interest
in any and all then owned or thereafter acquired property which shall include
any or all: (1) real property, whether fee simple, leasehold or other; and (2)
personal property and other assets, then owned or thereafter existing or
acquired, of any type or description, including but not limited to all
inventory, accounts receivable, equipment, contract rights, accounts, general
intangibles, instruments, investment securities, investment property, chattel
paper, notes, drafts, acceptances and all monies, deposit accounts and bank
balances, all books and records, computer tapes and programs and ledger books
arising out of or related to any of the foregoing; and (3) proceeds and products
of each of the foregoing in any form whatsoever including without limitation
insurance proceeds. Within such thirty (30) day period, the Borrower shall
execute and deliver to the Collateral Agent and shall cause each Subsidiary of
the Borrower to execute and deliver to the Collateral Agent any and all deeds of
trust, security deeds, mortgages, security agreements, pledge agreements, UCC
financing statements, and other collateral assignments, documents, agreements
and certificates as the Agent and its counsel shall reasonably request, all in
form and substance satisfactory to the Agent and its counsel in its sole
discretion (collectively referred to as the "Section 5.31 Security
Instruments"). Each Section 5.31 Security Instrument shall be duly recorded in
each office where such recording is required to constitute a valid lien on the
property covered thereby. Within such thirty (30) day period, the Borrower shall
deliver to the Collateral Agent, as applicable, at the Borrower's expense: (1)
mortgagee title insurance policies issued by a title insurance company
satisfactory to the Collateral Agent in its sole discretion insuring the
Collateral Agent and the Secured Parties, as mortgagees; such policies shall be
in form and substance satisfactory to the Collateral Agent and its counsel in
their sole discretion and shall insure a valid first lien on the property
covered thereby, subject only to Liens permitted under Section 5.09; (2) such
other documents, instruments and agreements, including without limitation, as
built surveys, environmental reports, landlord waivers and such other items as
the Collateral Agent in its sole discretion and its counsel may reasonably
request relating to the property subject to such Section 5.31 Security
Instruments; and (3) UCC financing statement searches in each jurisdiction where
recording is required to constitute a valid lien on the collateral covered
thereby, confirming the perfected first priority security interest of the
Collateral Agent and the Secured Parties on the collateral covered thereby,
subject only to Liens permitted under Section 5.09. Within such thirty (30) day
period, the Borrower shall and shall cause each Subsidiary to duly execute
and/or deliver (or cause to be duly executed and/or delivered) to the Collateral
Agent and the Secured Parties any instrument, invoice, document, stock
certificate, document of title, instrument, certificate, warrant, receipt, bill
of lading, order, financing statement, assignment, waiver, consent or other
writing which may be reasonably necessary to the Collateral Agent and the
Secured Parties to carry out the terms of this Section 5.31 and any of the other
Section 5.31 Security Instruments or Supplemental Mortgages and to perfect their
security interest in and facilitate the collection of the collateral, the
proceeds thereof and any other property at any time constituting security to the
Collateral Agent and the Secured Parties. After such thirty (30) day period, the
Borrower shall and shall cause the Subsidiaries to perform or cause to be
performed such acts as the Collateral Agent and the Secured Parties may request
to establish or maintain for the Collateral Agent and the Secured Parties a
valid and perfected security interest in and security title to the collateral
set forth above, free and clear of any liens other than in favor of the
Collateral Agent and other than as permitted under Section 5.09.
If the Rating Level is Level 2 on the Second Ratings Adjustment
Date or if an Automatic Collateral Rights Event occurs, then if at any time
thereafter the Borrower or any Subsidiary shall acquire at any time or times
thereafter any interest in real property, the Borrower agrees promptly to notify
the Agent and each Bank thereof in writing and shall execute and deliver to the
Collateral Agent and the Secured Parties, as additional security and collateral,
deeds of trust, security deeds, mortgages or other collateral assignments
satisfactory in form and substance to the Collateral Agent and its counsel
(herein collectively referred to as "Supplemental Mortgages") covering such real
property. Each Supplemental Mortgage shall be duly recorded in each office where
such recording is required to constitute a valid lien on the real property
covered thereby. The Borrower shall deliver and shall cause each Significant
Subsidiary to deliver to the Collateral Agent and the Secured Parties, at the
Borrower's expense, mortgagee title insurance policies and such other documents
including without limitation as built surveys and environmental reports as set
forth in the preceding paragraph with respect to Section 5.31 Security
Instruments.
SECTION 5.32. Corporate Rating. If the Rating Level is Level 2 on
the First Ratings Adjustment Date, the Borrower shall obtain, on or before July
31, 1999, a corporate credit rating respecting the Borrower issued by Moody's
and S&P and upon receipt of such rating the Borrower shall immediately notify
the Agent and the Banks of such rating.
SECTION 5.33. Capital Expenditures. The Borrower agrees that so
long as any Bridge Subordinated Debt is outstanding, Capital Expenditures will
not exceed in the aggregate in any Fiscal Year the sum of $25,000,000; provided
that after giving effect to the incurrence of any Capital Expenditures permitted
by this section, no Default shall have occurred and be continuing.
SECTION 5.34. Permitted Securitizations. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into or consummate any
financing program providing for the sale or transfer of Securitization Assets by
the Borrower or any Subsidiary unless such financing program constitutes a
"Permitted Securitization" as defined in Section 1.01; provided, that the
aggregate Net Disposition Proceeds received by the Borrower and its Subsidiaries
from any and all Permitted Securitizations entered into or consummated prior to
the repayment in full of the Bridge Subordinated Debt shall not exceed
$45,000,000.
SECTION 5.35. Restricted Payments. The Borrower will not declare
or make any Restricted Payment at any time if: (1) the declaration or making of
such Restricted Payment is prohibited under the terms of any Subordinated Debt
Document; or (2) after giving effect to the payment of any such Restricted
Payment, a Default or Event of Default shall occur.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Revolving Credit Loan, Swing Line Loan or any Term Loan or shall fail to pay any
interest on any Revolving Credit Loan, Swing Line Loan or any Term Loan within
five Domestic Business Days after such interest shall become due, or shall fail
to pay any fee or other amount payable hereunder within five Domestic Business
Days after such fee or other amount becomes due; or
(b) the Borrower or any Subsidiary shall fail to observe or
perform any covenant contained in Sections 5.02(ii), or 5.03, 5.04, 5.05, 5.06,
or 5.10 to 5.14, inclusive, Section 5.23, Section 5.26, Section 5.28, Section
5.30, Section 5.32 or Section 5.34;
(c) any Loan Party shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in any Loan Document (other
than those covered by clause (a) or (b) above) for thirty days after the earlier
of (i) the first day on which an Executive Officer of any Loan Party has
knowledge of such failure or (ii) written notice thereof has been given to the
Borrower by the Agent at the request of any Bank; or
(d) any representation, warranty, certification or statement made
or deemed made by any Loan Party in any Loan Document or in any certificate,
financial statement or other document delivered pursuant to any Loan Document
shall prove to have been incorrect or misleading in any material respect when
made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any payment
in respect of Debt outstanding (other than the Notes) in an aggregate principal
amount in excess of $5,000,000 when due or within any applicable grace period;
or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of the Borrower or any
Subsidiary in an aggregate principal amount in excess of $5,000,000 or the
mandatory prepayment or purchase of such Debt by the Borrower (or its designee)
or such Subsidiary (or its designee) prior to the scheduled maturity thereof, or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holders of such Debt or any Person acting on such holders' behalf to
accelerate the maturity thereof or require the mandatory prepayment or purchase
thereof prior to the scheduled maturity thereof, without regard to whether such
holders or other Person shall have exercised or waived their right to do so; or
(g) the Borrower, any other Loan Party or any Significant
Subsidiary shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower, any other Loan Party or any Significant Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Borrower,
any other Loan Party or any Significant Subsidiary under the federal bankruptcy
laws as now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall fail
to pay when due any material amount which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan or Plans in a distress termination under Section 4041(c) of ERISA shall
be filed under Title IV of ERISA by the Borrower, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Plan or Plans or a proceeding
shall be instituted by a fiduciary of any such Plan or Plans to enforce Section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated; or
(j) one or more judgments or orders for the payment of money in
an aggregate amount in excess of $1,000,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue unsatisfied
and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower or any
Significant Subsidiary under Section 6323 of the Code or a lien of the PBGC
shall be filed against the Borrower or any Significant Subsidiary under Section
4068 of ERISA and in either case such lien shall remain undischarged for a
period of 25 days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
20% or more of the outstanding shares of the Voting Stock of the Borrower; or
(ii) as of any date a majority of the Board of Directors of the Borrower
consists of individuals who were not either (A) directors of the Borrower as of
the corresponding date of the previous year, (B) selected or nominated to become
directors by the Board of Directors of the Borrower of which a majority
consisted of individuals described in clause (A), or (C) selected or nominated
to become directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A) and individuals
described in clause (B); or
(m) if any provision of this Agreement, any Note, the Guaranty,
the Pledge Agreement or the Indemnity Subrogation and Contribution Agreement
shall for any reason cease to be valid and binding on any Loan Party, or any
Loan Party shall deny or disaffirm its obligations thereunder; or
(n) if the Pledge Agreement or if executed and delivered pursuant
to Section 5.31, any Section 5.31 Security Instrument or Supplemental Mortgage
shall for any reason cease to create a valid and perfected first priority
security interest in any of the Collateral or Section 5.31 Collateral, as the
case may be, purported to be encumbered thereby; or
(o) an event of default shall occur and be continuing under any
of the Section 5.31 Security Instruments or Supplemental Mortgages and such
default or event of default continues beyond any applicable cure or grace period
provided in such Section 5.31 Security Instruments or Supplemental Mortgages; or
(p) an event of default shall occur under any of the Subordinated
Debt Documents;
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Revolving Credit Commitments and
Term Loan Commitments and they shall thereupon terminate, (ii) if requested by
the Swing Line Lender, by notice to the Borrower terminate the Swing Line
facility set forth in Section 2.13; and (iii) if requested by the Required
Banks, by notice to the Borrower declare the Notes (together with all accrued
interest thereon) and all other amounts payable hereunder and under the other
Loan Documents to be, and the Notes (together with all accrued interest thereon)
and all other amounts payable hereunder and under the other Loan Documents shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that if any Event of Default specified in clause (g) or (h)
above occurs with respect to the Borrower, without any notice to the Borrower,
any Guarantor or any other act by the Agent or the Banks, the Revolving Credit
Commitments, the Term Loan Commitments and the Swing Line facility set forth in
Section 2.13 shall thereupon automatically terminate and the Notes (together
with accrued interest thereon) and all other amounts payable hereunder and under
the other Loan Documents shall automatically become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower. Notwithstanding the foregoing, the Agent
shall have available to it all other remedies at law or equity, and shall
exercise any one or all of them at the request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower of any Default under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent: (a)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by the Borrower to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agent, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, the Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to have assumed
any obligation (other than such obligations that are specifically described
herein) towards or relationship of agency or trust with or for the Borrower. The
duties of the Agent shall be ministerial and administrative in nature, and the
Agent shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Term Loans, Swing Line Loans or
the Revolving Credit Loans) unless the Agent has received notice from a Bank or
the Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default or an Event of Default, the Agent shall
give prompt notice thereof to the Banks. The Agent shall give each Bank prompt
notice of each non-payment of principal of or interest on the Term Loans, Swing
Line Loans and the Revolving Credit Loans, whether or not it has received any
notice of the occurrence of such non-payment. The Agent shall (subject to
Section 9.05) take such action with respect to such Default or Event of Default
as shall be directed by the Required Banks; provided that, unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Banks.
SECTION 7.04. Rights of Agent and its Affiliates as a Bank. With
respect to any Term Loan, Swing Line Loan or Revolving Credit Loan made by
Wachovia or an Affiliate of Wachovia, such Affiliate and Wachovia in their
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not an Affiliate of
Wachovia (or in Wachovia's case, acting as the Agent), and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include such Affiliate of
Wachovia or Wachovia in its individual capacity. Such Affiliate and Wachovia may
(without having to account therefor to any Bank) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Borrower (and any of its Affiliates) as if they were not an Affiliate
of the Agent or the Agent, respectively; and such Affiliate and Wachovia may
accept fees and other consideration from the Borrower (in addition to any agency
fees and arrangement fees heretofore agreed to between the Borrower and
Wachovia) for services in connection with this Agreement or any other Loan
Document or otherwise without having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrower, ratably in accordance with the aggregate amount of its Revolving
Credit Commitment and Term Loan Commitment, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem
and treat the payee of any Note as the owner thereof for all purposes hereof
unless and until a written notice of the assignment or transfer thereof shall
have been filed with the Agent and the provisions of Section 9.07(c) have been
satisfied. Any requests, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of that Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 7.08. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Borrower of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
other Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any other Person (or any of
their Affiliates) which may come into the possession of the Agent. The Borrower
and each Bank acknowledges that each Bank designated as a "Documentation Agent"
or "Syndication Agent" on the signature pages of this Agreement shall have no
right, duty or responsibility, and shall incur no liability, under this
Agreement in its capacity as a "Documentation Agent" or "Syndication Agent".
SECTION 7.09. Failure to Act. Except for action expressly
required of the Agent hereunder or under the other Loan Documents, the Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by the Agent by reason of
taking, continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent that has been duly
appointed by the Required Banks shall have accepted such appointment within 30
days after the retiring Agent's notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Any successor Agent shall be a bank which has
a combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate, as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding the relevant type of Euro-Dollar Loans for
such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
the Euro-Dollar Loans specified in such notice shall be suspended. Unless the
Borrower notifies the Agent at least 2 Domestic Business Days before the date of
any Euro-dollar Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, such borrowing shall instead be
made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption
of any applicable law, rule or regulation, or any change in any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
authority, bank or agency being referred to as an "Authority" and any such event
being referred to as a "Change of Law"), or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any Authority shall make it unlawful or impossible for any Bank (or
its Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to
the other Banks and the Borrower, whereupon until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Loan of such Bank, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the
date hereof, a Change of Law or compliance by any Bank (or its Lending Office)
with any request or directive (whether or not having the force of law) of any
Authority:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Euro-Dollar Loans, its Notes or
its obligation to make Euro-Dollar Loans, or shall change the basis of
taxation of payments to any Bank (or its Lending Office) of the
principal of or interest on its Euro-Dollar Loans or any other amounts
due under this Agreement in respect of its Euro-Dollar Loans or its
obligation to make Euro-Dollar Loans (except for changes in the rate of
tax on the overall net income of such Bank or its Lending Office imposed
by the jurisdiction in which such Bank's principal executive office or
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Lending Office); or
(iii) shall impose on any Bank (or its Lending Office) or on the
London interbank market any other condition affecting its Euro-Dollar
Loans, its Notes or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation, or
any change in the interpretation or administration thereof, or compliance by any
Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Authority, has or would
have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans.
If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03, and the Borrower shall, by at least 5 Euro-Dollar Business
Days' prior notice to such Bank through the Agent, have elected that the
provisions of this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Term Loans and Revolving Credit Loans which would
otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as
Base Rate Loans (in all cases interest and principal on such Term Loans or
Revolving Credit Loans, as the case may be, shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all amounts due such Bank under Section 8.03 in
respect of the period preceding the date of conversion of such Bank's Term Loans
and Revolving Credit Loans resulting from the Borrower's election.
SECTION 8.05. Compensation. Upon the request of any Bank,
delivered to the Borrower and the Agent, the Borrower shall pay to such Bank
such amount or amounts as shall compensate such Bank for any loss, cost or
expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09, Section 2.10 or
otherwise) of a Euro-Dollar Loan on a date other than the last day of an
Interest Period for such Euro-Dollar Loan;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the date
for such prepayment specified in the relevant notice of prepayment hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the date
for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part specified
in the applicable Notice of Borrowing delivered pursuant to Section 2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its address
or telecopy number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective(i) if given by telecopier, when such telecopy is transmitted to the
telecopy number specified in this Section and the telecopy machine used by the
sender provides a written confirmation that such telecopy has been so
transmitted or receipt of such telecopy transmission is otherwise confirmed,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, and (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note or
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a)
The Borrower shall pay(i) all out-of-pocket expenses of the Agent, including
reasonable fees and disbursements of special counsel for the Agent, in
connection with the preparation of this Agreement and the other Loan Documents,
any waiver or consent hereunder or thereunder or any amendment hereof or thereof
or any Default or alleged Default hereunder or thereunder and (ii) if a Default
occurs, all out-of-pocket expenses incurred by the Agent or any Bank, including
reasonable fees and disbursements of counsel, in connection with such Default
and collection and other enforcement proceedings resulting therefrom, including
out-of-pocket expenses incurred in enforcing this Agreement and the other Loan
Documents.
(b) The Borrower shall indemnify the Agent and each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
Authority by reason of the execution and delivery of this Agreement or the other
Loan Documents.
(c) The Borrower shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims or damages to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by any
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from any investigation, litigation (including, without limitation,
any actions taken by the Agent or any of the Banks to enforce this Agreement or
any of the other Loan Documents) or other proceeding (including, without
limitation, any threatened investigation or proceeding) relating to the
foregoing, and the Borrower shall reimburse the Agent and each Bank, and each
Affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any expenses (including, without limitation, reasonable
legal fees) incurred in connection with any such investigation or proceeding;
but excluding any such losses, liabilities, claims, damages or expenses incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified.
SECTION 9.04. Set-Offs; Sharing of Set-Offs. (a) The Borrower
hereby grants to each Bank, as security for the full and punctual payment and
performance of the obligations of the Borrower under this Agreement, a
continuing lien on and security interest in all deposits and other sums credited
by or due from such Bank to the Borrower or subject to withdrawal by the
Borrower; and regardless of the adequacy of any collateral or other means of
obtaining repayment of such obligations, each Bank may at any time upon or after
the occurrence of any Event of Default, and without notice to the Borrower, set
off the whole or any portion or portions of any or all such deposits and other
sums against such obligations, whether or not any other Person or Persons could
also withdraw money therefrom.
(b) Each Bank agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Revolving
Credit Notes and Term Loan Notes held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Revolving Credit Note and Term Loan Notes
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Revolving Credit Notes and Term Loan
Notes held by the other Banks owing to such other Banks, and/or such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Revolving Credit Notes and Term Loan
Notes held by the Banks owing to such other Banks shall be shared by the Banks
pro rata; provided that (i) nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Revolving Credit Notes and Term
Loan Notes, and (ii) if all or any portion of such payment received by the
purchasing Bank is thereafter recovered from such purchasing Bank, such purchase
from each other Bank shall be rescinded and such other Bank shall repay to the
purchasing Bank the purchase price of such participation to the extent of such
recovery together with an amount equal to such other Bank's ratable share
(according to the proportion of (x) the amount of such other Bank's required
repayment to (y) the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect of
the total amount so recovered. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Revolving Credit Note and Term Loan Note, whether or not acquired pursuant to
the foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all of the Banks, (i) change the Revolving Credit
Commitment or Term Loan Commitment of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or reduce the rate of
interest on any Term Loan, Swing Line Loan or Revolving Credit Loan or the
amount of any fees hereunder or the amount of the Obligations (as defined in the
Guaranty) payable by any Guarantor under the Guaranty, (iii) change the date
fixed for any reduction of the Term Loan Commitment or any payment of principal
of or interest on any Term Loan, Swing Line Loan or Revolving Credit Loan or any
fees hereunder or any of the Obligations (as defined in the Guaranty) under the
Guaranty, (iv) change the amount of principal or reduce the amount of interest
or fees due on any date fixed for the payment thereof under this Agreement, the
Notes or any other Loan Document, (v) change the percentage of the Revolving
Credit Commitment or Term Loan Commitment or of the aggregate unpaid principal
amount of the Notes, or the percentage of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement or modify the definition of Required Banks, (vi)
change the manner of application of any payments made under this Agreement, the
Guaranty or the Notes, (vii) release or substitute all or any substantial part
of the Collateral held as security for the Term Loans, Swing Line Loans, the
Revolving Credit Loans or any of the Obligations, (viii) waive any of the
conditions precedent contained in Section 3.01 or Section 3.02, (ix) amend or
modify Section 5.31, or (x) release, discharge or terminate any guaranty given
to support payment of the Term Loans or Revolving Credit Loans (including,
without limitation, the Guaranty); provided further that no such amendment or
waiver shall, unless signed by the Swing Line Lender, change any provision of
this Agreement (including without limitation Section 2.13) relating to the Swing
Line Loans.
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Bank shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this Agreement shall be
delivered by the Borrower to each Bank forthwith following the date on which the
same shall have been executed and delivered by the requisite percentage of
Banks. The Borrower will not, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.07. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Term Loan, Swing Line Loan or
Revolving Credit Loan owing to such Bank, any Note held by such Bank, any Term
Loan Commitment or Revolving Credit Commitment hereunder or any other interest
of such Bank hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under this
Agreement shall remain unchanged, such Bank shall remain solely responsible for
the performance thereof, such Bank shall remain the holder of any such Note for
all purposes under this Agreement, and the Borrower and the Agent shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Term Loan, Swing Line Loan or Revolving Credit Loan or Term Loans or Swing Line
Loans or Revolving Credit Loans, (ii) the change of the amount of any principal,
or the reduction of any interest or fees due on any date fixed for the payment
thereof with respect to the related Term Loan, Swing Line Loan or Revolving
Credit Loan or Term Loans, Swing Line Loans or Revolving Credit Loans, (iii) the
change of the principal of the related Term Loan, Swing Line Loan or Revolving
Credit Loan or Term Loans, Swing Line Loans or Revolving Credit Loans, (iv) any
reduction in the rate at which either interest is payable thereon or (if the
Participant is entitled to any part thereof) commitment fee is payable hereunder
from the rate at which the Participant is entitled to receive interest or
commitment fee (as the case may be) in respect of such participation, (v) the
release or substitution of all or any substantial part of the Collateral held as
security for the Term Loans, Swing Line Loans or Revolving Credit Loans, or (vi)
the release of any guaranty given to support payment of the Term Loans or
Revolving Credit Loans. Each Bank selling a participating interest in any Term
Loan, Swing Line Loan or Revolving Credit Loan, Note, Term Loan Commitment,
Revolving Credit Commitment or other interest under this Agreement shall, within
10 Domestic Business Days of such sale, provide the Borrower and the Agent with
written notification stating that such sale has occurred and identifying the
Participant and the interest purchased by such Participant. The Borrower agrees
that each Participant shall be entitled to the benefits of Article VIII with
respect to its participation in Term Loans, Swing Line Loans and Revolving
Credit Loans outstanding from time to time.
<PAGE>
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit
H, executed by such Assignee, such transferor Bank and the Agent (and, in the
case of (i) an Assignee that is not then a Bank or an Affiliate of a Bank; and
(ii) an assignment not made during the existence of a Default or an Event of
Default, by the Borrower); provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Term Loan Commitment and Revolving
Credit Commitment, (ii) the aggregate amount of the Term Loan Commitment and
Revolving Credit Commitment of the assigning Bank subject to such assignment
(determined as of the effective date of the assignment) shall be equal to or
greater than $5,000,000, (iii) no interest may be sold by a Bank pursuant to
this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a
Bank without the consent of the Borrower, which consent shall not be
unreasonably withheld, provided that the Borrower's consent shall not be
necessary with respect to any assignment made during the existence of a Default
or an Event of Default; and (iv) no interest may be sold by a Bank pursuant to
this paragraph (c) to any Assignee that is not then a Bank or an Affiliate of a
Bank, without the consent of the Agent, which consent shall not be unreasonably
withheld, provided, that, although the Agent's consent may not be necessary with
respect to an Assignee that is then a Bank or an Affiliate of a Bank, no such
assignment shall be effective until the conditions set forth in the following
sentence are satisfied. Upon (A) execution of the Assignment and Acceptance by
such transferor Bank, such Assignee, the Agent and (if applicable) the Borrower,
(B) delivery of an executed copy of the Assignment and Acceptance to the
Borrower and the Agent, (C) payment by such Assignee to such transferor Bank of
an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, and (D) payment by the assigning Bank of a processing and
recordation fee of $3,500 to the Agent, such Assignee shall for all purposes be
a Bank party to this Agreement and shall have all the rights and obligations of
a Bank under this Agreement to the same extent as if it were an original party
hereto with a Term Loan Commitment and Revolving Credit Commitment, as the case
may be, as set forth in such instrument of assumption, and the transferor Bank
shall be released from its obligations hereunder to a corresponding extent, and
no further consent or action by the Borrower, the Banks or the Agent shall be
required. Upon the consummation of any transfer to an Assignee pursuant to this
paragraph (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to each of
such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.08, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession concerning the
Borrower which has been delivered to such Bank by the Borrower pursuant to this
Agreement or which has been delivered to such Bank by the Borrower in connection
with such Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 than the transferor Bank would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 8.02 or 8.03 requiring such Bank to designate a different Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of the Term
Loans, Swing Line Loans, Revolving Credit Loans and/or obligations owing to it
to any Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and Operating Circular issued by such Federal Reserve Bank, provided that any
payment in respect of such assigned Term Loans, Swing Line Loans, Revolving
Credit Loans and/or obligations made by the Borrower to the assigning and/or
pledging Bank in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned Term Loans, Swing
Line Loans, Revolving Credit Loans and/or obligations to the extent of such
payment. No such assignment shall release the assigning and/or pledging Bank
from its obligations hereunder.
SECTION 9.08. Confidentiality. Each Bank agrees to exercise its
best efforts to keep any information delivered or made available by the Borrower
to it which is clearly indicated to be confidential information, confidential
from anyone other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Term Loans, Swing Line Loans and Revolving Credit Loans;
provided, however, that nothing herein shall prevent any Bank from disclosing
such information (i) to any other Bank, (ii) upon the order of any court or
administrative agency, (iii) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (iv) which has been publicly
disclosed, (v) to the extent reasonably required in connection with any
litigation to which the Agent, any Bank or their respective Affiliates may be a
party, (vi) to the extent reasonably required in connection with the exercise of
any remedy hereunder, (vii) to such Bank's legal counsel, Affiliates and
independent auditors and (viii) to any actual or proposed Participant, Assignee
or other Transferee of all or part of its rights hereunder which has agreed in
writing to be bound by the provisions of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby
represents that it is a commercial lender or financial institution which makes
loans in the ordinary course of its business and that it will make its Term
Loans, Swing Line Loans and Revolving Credit Loans hereunder for its own account
in the ordinary course of such business; provided, however, that, subject to
Section 9.07, the disposition of the Note or Notes held by that Bank shall at
all times be within its exclusive control.
SECTION 9.10. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.11. Survival of Certain Obligations. Sections 8.03(a),
8.03(b), 8.05 and 9.03, and the obligations of the Borrower thereunder, shall
survive, and shall continue to be enforceable notwithstanding, the termination
of this Agreement and the Revolving Credit Commitments and Term Loan Commitments
and the payment in full of the principal of and interest on all Term Loans,
Swing Line Loans and Revolving Credit Loans.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest
due or payable hereunder or under the Notes exceed the maximum rate of interest
allowed by applicable law, and in the event any such payment is inadvertently
made to any Bank by the Borrower or inadvertently received by any Bank, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify such Bank in writing that it elects to have such excess sum
returned forthwith. It is the express intent hereof that the Borrower not pay
and the Banks not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement or
any of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Consent to Jurisdiction. The Borrower (a) submits
to personal jurisdiction in the State of Georgia, the courts thereof and the
United States District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (b) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Georgia for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (c) agrees that service of
process may be made upon it in the manner prescribed in Section 9.01 for the
giving of notice to the Borrower. Nothing herein contained, however, shall
prevent the Agent from bringing any action or exercising any rights against any
security and against the Borrower personally, and against any assets of the
Borrower, within any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
[Remainder of this page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, under seal, by their respective authorized officers as of
the day and year first above written.
CADMUS COMMUNICATIONS CORPORATION
By: ___________________________ (SEAL)
Title: Vice President and Treasurer
Suite 500
6620 West Broad Street
Richmond, Virginia 23230
Attention: Mr. David E. Bosher
Telecopy number:(804) 287-5683
Telephone number: (804) 287-5680
WACHOVIA BANK, N.A., as Agent
By: ___________________________ (SEAL)
Title:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Manager, Syndicate Loan Services
Telecopy number: (404) 332-5144
Telephone number: (404) 332-4008
[ Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$27,187,500 FIRST UNION NATIONAL BANK
Term Loan Commitment: By:___________________________ (SEAL)
$10,312,500 Title:
Lending Office
First Union National Bank
301 South College Street, DC5
Charlotte, North Carolina 28288
Attention: William R. Goley, Vice President
Telecopy number: (704) 374-4793
Telephone number: (704) 383-8180
[Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$27,187,500 NATIONSBANK, N.A.
Term Loan Commitment: By:___________________________ (SEAL)
$10,312,500 Title:
Lending Office
Bank of America Corporate Center
100 North Tryon Street
17th Floor
Charlotte, North Carolina 28255-0001
Attention: Michael McKenney
Telecopy number: (704) 388-0960
Telephone number: (704) 388-5920
[Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$50,750,000 WACHOVIA BANK, N.A., as a Bank
Term Loan Commitment:
$19,250,000
By:______________________________(SEAL)
Title:_____________________________
Lending Office:
Wachovia Bank, N.A.
1021 East Cary Street
Richmond, Virginia 23219
Attention: Christopher Borin
Telecopy number: (804) 697-7581
Telephone number: (804) 697-6820
<PAGE>
[Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$18,125,000 FLEET NATIONAL BANK
Term Loan Commitment: By:___________________________ (SEAL)
$6,875,000 Title:
Lending Office
Fleet National Bank
One Federal Street, 7th Floor
MA OF DO7L
Boston, Massachusetts 02110
Attention: David Harnisch, Vice President
Telecopy number: (617) 346-0145
Telephone number: (617) 346-0597
[Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$10,875,000 CRESTAR BANK
Term Loan Commitment: By:___________________________ (SEAL)
$4,125,000 Title:
Lending Office
Crestar Bank
919 East Main Street
22nd Floor
Richmond, Virginia 23219
Attention: Brad H. Booker, Senior Vice President
Telecopy number: (804) 782-5413
Telephone number: (804) 782-7781
[Remainder of this page intentionally left blank]
<PAGE>
Revolving Credit Commitment:
$10,875,000 NATIONAL CITY BANK OF KENTUCKY
Term Loan Commitment: By:___________________________ (SEAL)
$4,125,000 Title:
Lending Office
National City Bank of Kentucky
101 South Fifth Street
Locator #708J
Louisville, Kentucky 40202
Attention: Todd Ethington, Vice President
Telecopy number: (502) 581-5122
Telephone number: (502) 581-4397
- --------------
TOTAL COMMITMENTS:
Revolving Credit Commitments:
$145,000,000
Term Loan Commitments:
$55,000,000
Exhibit 10.2
CADMUS COMMUNICATIONS CORPORATION
SENIOR SUBORDINATED INCREASING RATE NOTES, SERIES A
INDENTURE
DATED AS OF APRIL 1, 1999
WILMINGTON TRUST COMPANY,
TRUSTEE
<PAGE>
INDENTURE, dated as of April 1, 1999, among CADMUS COMMUNICATIONS
CORPORATION, a Virginia corporation (the "Company"), the GUARANTORS (as defined
herein) and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee
(the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Company's Senior
Subordinated Increasing Rate Notes, Series A, issued pursuant to this Indenture
on the date hereof and guaranteed by the Guarantors (the "Senior Subordinated
Notes"), (ii) any Roll-Over Notes (as defined herein) that may be issued upon
the Initial Maturity Date (as defined herein) and (iii) any Exchange Notes or
Private Exchange Notes (each as defined herein) if and when issued as provided
in the Registration Rights Agreement (as defined herein) in exchange for any
Roll-Over Notes. The Senior Subordinated Notes, any Roll-Over Notes, any
Exchange Notes and any Private Exchange Notes, treated as one class, are
collectively referred to as the "Senior Subordinated Securities."
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or that is assumed in connection with the
acquisition of assets from such Person, in each case, not Incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"ACQUISITION" means the acquisition contemplated by the Stock Purchase
Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and
the terms "controlling" and "controlled" have meanings correlative of the
foregoing. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Securitization Entity makes an
Investment in connection with a Qualified Securitization Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"APPLICABLE CALL PREMIUM" means, as of a particular date, the
number set forth opposite such date in the table below, expressed as a
percentage of the principal amount of the Roll-Over Notes or Exchange Notes, as
the case may be.
REDEMPTION DATE PREMIUM
2004.............................................. 107.000%
2005.............................................. 104.667%
2006.............................................. 102.333%
2007 and thereafter............................... 100.000%
"ASSET ACQUISITION" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or of any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) 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 comprises any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Restricted Subsidiary of the Company or
(b) any other property or assets of the Company or any Restricted Subsidiary of
the Company other than in the ordinary course of business. Notwithstanding the
foregoing, the following shall not be deemed to be Asset Sales: (w) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $250,000;
(x) the sale, lease, conveyance, disposition or other transfer of all or
substantially all of the assets of the Company as permitted by Section 5.01; (y)
sales of accounts receivable and related assets (including contract rights) of
the type specified in the definition of "Qualified Securitization Transaction"
to a Securitization Entity for the fair market value thereof, including cash in
an amount at least equal to 75% of the fair market value thereof as determined
in accordance with GAAP (for the purposes of this clause (y), Purchase Money
Notes shall be deemed to be cash); and (z) transfers of accounts receivable and
related assets (including contract rights) of the type specified in the
definition of Qualified Securitization Transaction (or a fractional undivided
interest therein) by a Securitization Entity in a Qualified Securitization
Transaction.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banking institutions in the State of Delaware or the City of New York
are authorized or required by law or governmental action to be closed.
"CAPITAL EXPENDITURES" means, for any period, the sum of all capital
expenditures Incurred during such period by the Company and its Consolidated
Subsidiaries (other than capitalized interest), as determined in accordance with
GAAP
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing regulations and
amendments.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group"), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of this Indenture); (ii) the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any Person or Group is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 14(d) 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),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company, measured by voting power rather than number of shares; (iv) the first
day on which a majority of the members of the Board of Directors of the Company
are not Continuing Directors; or (v) the Company consolidates with, or merges
with or into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Capital
Stock) of the surviving or transferee Person constituting a majority of such
Voting Stock of such surviving or transferee Person, measured by voting power
rather than number of shares (immediately after giving effect to such issuance).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such in the introductory paragraphs
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and thereafter, means such successor.
"CONSOLIDATED CASH FLOW" means, for any period, the sum, without
duplication, of (a) Consolidated Net Income for such period, (b) taxes on income
of the Company and its Consolidated Subsidiaries for such period to the extent
deducted in determining Consolidated Net Income for such period, (c) interest
expensed in respect of Indebtedness of the Company or any of its Consolidated
Subsidiaries (other than any Obligations of the Company or such Consolidated
Subsidiaries under Currency Agreements or Interest Swap Agreements) outstanding
during such period, PROVIDED that there shall be excluded from such interest
amount any amount that would otherwise be included therein with respect to the
non-cash amortization of deferred financing costs, (d) book depreciation
expenses of the Company and its Consolidated Subsidiaries for such period, and
(e) amortization of intangible assets of the Company and its Consolidated
Subsidiaries for such period, all determined with respect to the Company and its
Consolidated Subsidiaries on a consolidated basis for such period and in
accordance with GAAP. In determining Consolidated Cash Flow for any period, (i)
any Consolidated Subsidiary acquired during such period by the Company or any
other Consolidated Subsidiary shall be included on a PRO FORMA, historical basis
as if it had been a Consolidated Subsidiary during such entire period, (ii) any
amounts which would be included in a determination of Consolidated Cash Flow for
such period with respect to assets acquired during such period by the Company or
any Consolidated Subsidiary shall be included in the determination of
Consolidated Cash Flow for such period and the amount thereof shall be
calculated on a PRO FORMA, historical basis as if such assets had been acquired
by the Company or such Consolidated Subsidiary prior to the first day of such
period, (iii) any Consolidated Subsidiary sold during such period by the Company
or any other Consolidated Subsidiary shall be excluded as if it had not been a
Consolidated Subsidiary at any time during such period, and (iv) any amounts
which would be otherwise included in a determination of Consolidated Cash Flow
for such period with respect to assets sold or otherwise disposed of during such
period by the Company or any Consolidated Subsidiary shall be excluded in the
determination of Consolidated Cash Flow for such period and the amount excluded
shall be calculated as if such assets had been sold or otherwise disposed of by
the Company or such Consolidated Subsidiary prior to the first day of such
period; provided that for each fiscal quarter of the Company ending June 30,
1999, September 30, 1999 and December 31, 1999, Consolidated Cash Flow shall be
increased by the amount of the Net Cash Flow Adjustment for such fiscal quarter
of the Company.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the
extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes
of such Person and its Restricted Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges LESS any non-cash items
increasing Consolidated Net Earnings for such period, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in accordance
with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "Transaction
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a PRO FORMA basis (in accordance with Article
11 of Regulation S-X under the Securities Act) for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
Incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the Incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital or revolving credit facilities, occurring during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such Incurrence or repayment, as the case
may be (and the application of the proceeds thereof), had occurred on the first
day of the Four Quarter Period and (ii) 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 of such
Person arising as a result of the Asset Acquisition) Incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any PRO FORMA expense and cost reductions
calculated in accordance with Article 11 of Regulation S-X under the Securities
Act) attributable to the assets which are the subject of the Asset Acquisition
or Asset Sale or other disposition during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or other disposition or Asset Acquisition (including the Incurrence,
assumption or liability for any such Acquired Indebtedness) occurred on the
first day of the Four Quarter Period. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the Incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly Incurred or otherwise assumed such guaranteed Indebtedness. If, since
the beginning of such Four Quarter Period, any Person (that subsequently became
a Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such Four
Quarter Period) shall have made any Asset Sale or other disposition or Asset
Acquisition that would have required adjustment pursuant to this definition,
then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving PRO
FORMA effect thereto (in accordance with Article 11 of Regulation S-X under the
Securities Act) as if such Asset Sale or other disposition or Asset Acquisition
had occurred at the beginning of the applicable Four Quarter Period.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of the "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 agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock) paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated federal, state and local
tax rate of such Person, expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount and amortization or write-off
of deferred financing costs, (b) the net costs under Interest Swap Obligations,
(c) all capitalized interest and (d) the interest portion of any deferred
payment obligation; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET EARNINGS" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom: (a) after-tax gains
from Asset Sales (without regard to the $250,000 limitation set forth in the
definition thereof) or abandonments or reserves relating thereto; (b) after-tax
items classified as extraordinary, unusual or nonrecurring gains; (c) the net
income of any Person acquired in a "pooling of interests" transaction accrued
prior to the date it becomes a Restricted Subsidiary of the referent Person or
is merged or consolidated with the referent Person or any Restricted Subsidiary
of the referent Person; (d) the net income (but not loss) of any Restricted
Subsidiary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by a contract, operation of law or otherwise; (e) the net income
of any Person, other than a Restricted Subsidiary of the referent Person, except
to the extent of cash dividends or distributions paid to the referent Person or
to a Wholly Owned Restricted Subsidiary of the referent Person by such Person;
(f) any restoration of income of any contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Earnings
accrued at any time following the Issue Date; (g) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period, whether or not such operations were classified as
discontinued); and (h) 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 Person prior to such consolidation, merger or transfer
of assets.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis,
but excluding (i) any non-cash restructuring and/or integration charges taken by
the Company in connection with the transactions described in the Stock Purchase
Agreement up to an aggregate amount of $12.0 million, (ii) extraordinary items
and (iii) any equity interests of the Company or any Subsidiary of the Company
in the unremitted earnings of any Person that is not a Subsidiary of the
Company.
"CONSOLIDATED NET WORTH" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash charges
and expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Earnings of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary item or loss or any
such charge which requires an accrual of or a reserve for cash charges for any
future period).
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary of the
Company or other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Company in its consolidated financial statements
as of such date.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate Indebtedness
of the Company and its Consolidated Subsidiaries plus all Securitization
Facility Attributed Debt, determined on a consolidated basis as of such date.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of such
Board of Directors on the Issue Date; or (2) was nominated for election or
elected to the Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001.
"CREDIT AGREEMENT" means the Credit Agreement dated as of April 1, 1999,
among the Company, the lenders party thereto in their capacities as lenders
thereunder, NationsBank, N.A., as Documentation Agent, First Union National
Bank, as Syndication Agent, and Wachovia Bank, N.A., as Agent, together with the
related documents thereto (including 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 or adding Restricted Subsidiaries of the Company
as additional borrowers or guarantors thereof) 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.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"CUSTODIAN" means the custodian with respect to any Global Senior
Subordinated Security (as appointed by the Depositary), or any successor entity
thereto as provided in Section 2.03.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to the Senior Subordinated Securities
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 as the Depositary with respect to the Senior Subordinated
Securities, until a successor shall have been appointed and become such pursuant
to the applicable provisions of this Indenture, and thereafter, "Depositary"
shall mean or include such successor.
"DESIGNATED GUARANTOR SENIOR DEBT" means (i) Indebtedness of a Guarantor
under or in respect of the Credit Agreement and (ii) any other Indebtedness
constituting Guarantor Senior Debt which, at the time of determination, has an
aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Guarantor Senior Debt as
"Designated Guarantor Senior Debt."
"DESIGNATED SENIOR DEBT" means (i) Indebtedness of the Company under or
in respect of the Credit Agreement and (ii) any other Indebtedness constituting
Senior Debt which, at the time of determination, has an aggregate principal
amount of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Debt as "Designated Senior Debt."
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof on or prior to the final maturity date
of the Senior Subordinated Securities. Notwithstanding the preceding sentence,
any Capital Stock that would constitute Disqualified Capital Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or asset sale
shall not constitute Disqualified Capital Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.04 of this Indenture.
"DOLLARS" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the
Company that is incorporated or otherwise organized under the laws of the United
States or any State thereof or the District of Columbia.
"ENVIRONMENTAL AUTHORITY" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"ENVIRONMENTAL RELEASES" means releases as defined by CERCLA or under
any applicable state or local environmental law or regulation.
"ENVIRONMENTAL REQUIREMENTS" means any legal requirement relating to
health, safety or the environment and applicable to the Company, any Subsidiary
of the Company or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees and common law.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"EXCHANGE NOTES" means the Company's Senior Subordinated Notes due 2009
issued in exchange for the Roll-Over Notes pursuant to the Registration Rights
Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GLOBAL SENIOR SUBORDINATED SECURITIES LEGEND" means the legend set
forth in Exhibit C.
"GLOBAL SENIOR SUBORDINATED SECURITY" means a Senior Subordinated
Security that bears the Global Senior Subordinated Securities Legend.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letter of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"GUARANTOR" means (1) each of Cadmus Journal Services, Inc., a Virginia
corporation, Washburn Graphics, Inc., a North Carolina corporation, American
Graphics, Inc., a Georgia corporation, Expert Graphics, Inc., a Virginia
corporation, Cadmus Direct Marketing, Inc., a North Carolina corporation, Three
Score, Inc., a Georgia corporation, Mack Printing Company, a Pennsylvania
corporation, Port City Press, Inc., a Maryland corporation, Mack Printing Group,
Inc., a Delaware corporation, and Science Craftsman Incorporated, a New York
corporation, and (2) each of the Company's Restricted Subsidiaries that in the
future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; PROVIDED that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.
"GUARANTOR SENIOR DEBT" means, with respect to any Guarantor, the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Guarantor,
whether outstanding on the Issue Date or thereafter created, Incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Subsidiary Guarantee of such Guarantor. Without limiting the
generality of the foregoing, "Guarantor Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of (1) all monetary obligations of every nature of such Guarantor in respect of
the Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (2) all Interest Swap Obligations (including
guarantees thereof), and (3) all obligations under Currency Agreements
(including guarantees thereof), in each case, whether outstanding on the Issue
Date or thereafter Incurred. Notwithstanding the foregoing, "Guarantor Senior
Debt," with respect to any Guarantor, shall not include (i) any Indebtedness of
such Guarantor to a Subsidiary or Affiliate of such Guarantor, or any Subsidiary
of such Affiliate, (ii) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of such Guarantor or any Subsidiary
of such Guarantor (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts Incurred
in connection with obtaining goods, materials or services, (iv) Indebtedness
represented by Disqualified Capital Stock, (v) any liability for federal, state,
local or other taxes owed or owing by such Guarantor, (vi) that portion of
Indebtedness Incurred in violation of the provisions of Section 4.03 (but, as to
any such obligation, no such violation shall be deemed to exist for purposes of
this clause (vi) if the holder(s) of such obligation or their representative and
the Trustee shall have received an Officers' Certificate of the Company to the
effect that the Incurrence of such Indebtedness does not (or, in the case of
revolving credit indebtedness, that the Incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (vii) Indebtedness which,
when Incurred and without respect to any election under Section 1111(b) of Title
11, United States Code, is without recourse to such Guarantor, and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of such Guarantor.
"HAZARDOUS MATERIALS" means, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, 42
U.S.C. ss.6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) any "hazardous substance",
"pollutant" or "containment", as defined in CERCLA, or in any applicable state
or local law regulation, (c) gasoline, or any other petroleum product or
by-product, including crude oil or any fraction thereof, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any applicable
state or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time.
"HOLDER" OR "SENIOR SUBORDINATED SECURITYHOLDER" means the Person in
whose name a Senior Subordinated Security is registered on the Registrar's
books.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all Obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all Obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person and (ix) all Disqualified Capital Stock issued by
such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to any
provision hereof, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT FINANCIAL ADVISOR" means a nationally recognized investment
banking or accounting firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company or any of its Subsidiaries and (ii) which, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL MATURITY DATE" means April 1, 2000, the maturity date of the
Senior Subordinated Notes; PROVIDED, that if on such date there exists any
Default under Section 6.01(a), (c), (d), (e) or (h) but any applicable grace
period has not expired as of such date, the Initial Maturity Date shall be
postponed until the earlier to occur of (i) the date on which all such Defaults
are cured and (ii) the date on which any such grace period expires.
"INTEREST" means, with respect to any Senior Subordinated Security, the
sum of cash interest and any Additional Interest (as defined in the Registration
Rights Agreement) on such Senior Subordinated Securities.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including a guarantee) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
Person. "Investment" shall exclude extensions of trade credit by the Company and
its Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case
may be. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Restricted Subsidiary is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Common Stock
of such Restricted Subsidiary not sold or disposed of.
"ISSUE DATE" means the date of original issuance of the Senior
Subordinated Notes.
"JUNIOR SUBORDINATED NOTES" means, collectively, the three (3) 11.5%
subordinated promissory notes due March 31, 2010 of the Company.
"LIBOR PERIOD" means each period which begins on the last day of the
immediately preceding LIBOR Period (or, in the case of the first LIBOR Period,
which begins on the Issue Date) and ends on the date occurring ninety (90) days
thereafter; provided that if such date is not a Business Day, the respective
LIBOR Period shall end on the next succeeding Business Day.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"NET CASH FLOW ADJUSTMENT" means, for any period, solely for calculating
Consolidated Cash Flow for any four fiscal quarter period of the Company ending
on or before the first anniversary of the Issue Date, an amount (up to a maximum
amount of $3,034,000 for any such four fiscal quarter period) equal to any
quantifiable cost savings, the amount of which the Company demonstrates in
reasonable detail to the agent under the Credit Agreement as having been
realized by the Company and its Subsidiaries as a result of, or in connection
with, the Acquisition, such cost savings in each case to be given PRO FORMA
effect as if they had been realized commencing as of the beginning of the third
fiscal quarter of the Company immediately preceding the fiscal quarter in which
the Company demonstrates such cost savings to the agent under the Credit
Agreement (in each case without duplication of any amounts already included in
Consolidated Cash Flow for the relevant period or any portion thereof).
"NET CASH PROCEEDS" means, (a) with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Subsidiaries from such Asset
Sale net of (i) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions); (ii) taxes paid or payable relating to such
Asset Sale after taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing arrangements;
(iii) the repayment of Indebtedness that is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets; and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
of the Company, as the case may be, as a reserve, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary of the Company, as the case may be, after
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, and (b) with respect to any issuance or sale of Take-Out
Securities by any Person, the proceeds of such Incurrence, issuance or sale in
the form of cash or Cash Equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received by such Person in the form of cash or
Cash Equivalents and proceeds from the conversion of other property received by
such Person when converted to cash or Cash Equivalents, net of reasonable
out-of-pocket fees and expenses (including reasonable attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and reasonable brokerage, consultant and other fees) Incurred in
connection with such Incurrence, issuance or sale.
"NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" with respect to any Person, means the Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or the Controller of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
such Person that meets the requirements set forth in Sections 13.04 and 13.05 of
this Indenture.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"PARTICIPATING SUBSIDIARY" means any Subsidiary of the Company that is a
participant in a Permitted Securitization.
"PERMITTED BUSINESS" means any business (including stock or assets) that
derives its revenues from the business engaged in by the Company and its
Restricted Subsidiaries on the Issue Date and/or activities that are reasonably
similar, ancillary or related to, or a reasonable extension, development or
expansion of, the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(i) Indebtedness under the Senior Subordinated Securities, the
Series B Securities, the Series C Securities, this Indenture, the Series
B Indenture, the Series C Indenture and the Subsidiary Guarantees..
(ii) Indebtedness Incurred by the Company pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed $200.0 million, reduced by (a) the amount of all mandatory
principal payments actually made by the Company in respect of term loans
thereunder; (b) the amount of all required permanent repayments, if any
(which are accompanied by a corresponding permanent commitment
reduction), thereunder; and (c) the aggregate amount of Indebtedness of
Securitization Entities in Qualified Securitization Transactions at the
time outstanding, to the extent that the net proceeds from such
Indebtedness are not used (within 5 Business Days of the Incurrence of
such Indebtedness) to make mandatory principal payments or required
permanent repayments in accordance with clauses (a) and (b) above;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually
paid or permanent reductions thereof;
(iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of
its Restricted Subsidiaries; PROVIDED that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness
Incurred in accordance with this Indenture to the extent that the
notional principal amount of any such Interest Swap Obligation does not
exceed the principal amount of the Indebtedness to which such Interest
Swap Obligation relates;
(v) Indebtedness of the Company or any of its Restricted
Subsidiaries under Currency Agreements; PROVIDED that such Currency
Agreements are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in the value of foreign currencies
purchased or received in the ordinary course of business; PROVIDED,
FURTHER, that, in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the Indebtedness
of the Company and its Restricted Subsidiaries outstanding other than as
a result of fluctuations of foreign currency exchange rates or by reason
of fees, indemnities and compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly Owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary of the Company, in each case subject
to no Lien held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company; PROVIDED that if as of any date
any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
Incurrence of Indebtedness not constituting Permitted Indebtedness by
the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company, in each case subject
to no Lien; PROVIDED that (a) any Indebtedness of the Company to any
Wholly Owned Restricted Subsidiary of the Company that is not a
Guarantor is unsecured and subordinated, pursuant to a written
agreement, to the Company's Obligations under this Indenture and the
Senior Subordinated Securities and (b) if as of any date any Person
other than a Wholly Owned Restricted Subsidiary of the Company owns or
holds any such Indebtedness or any Person holds a Lien in respect of
such Indebtedness, such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two Business Days
of Incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations
in connection with self-insurance or similar requirements in the
ordinary course of business;
(x) Refinancing Indebtedness;
(xi) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Indebtedness of the Company and its Restricted
Subsidiaries Incurred in the ordinary course of business not to exceed
$5.0 million at any one time outstanding;
(xii) the Incurrence by a Securitization Entity of Indebtedness
in a Qualified Securitization Transaction that is without recourse to
the Company or any Subsidiary of the Company (except for Standard
Securitization Undertakings);
(xiii) so long as no Senior Subordinated Note, Series B Note or
Series C Note is then outstanding, additional Indebtedness of the
Company and its Restricted Subsidiaries in an aggregate principal amount
not to exceed $10.0 million at any one time outstanding (which amount
may, but need not, be Incurred in whole or in part under the Credit
Agreement); and
(xiv) Indebtedness under the Take-Out Senior Subordinated Debt
and any guarantees thereof.
For purposes of determining compliance with Section 4.03, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xi),
(xiii) or (xiv) above or is otherwise entitled to be Incurred pursuant to
Section 4.03(a), the Company shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with such
Section. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Capital Stock will not be deemed to be an Incurrence of Indebtedness of an
issuance of Disqualified Capital Stock for purposes of Section 4.03. The amount
of Indebtedness issued at a price that is either less or greater than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
"PERMITTED INVESTMENTS" means: (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Wholly Owned Restricted Subsidiary
of the Company that is a Guarantor or any Person if as a result of such
Investment such Person shall become a Wholly Owned Restricted Subsidiary of the
Company that is a Guarantor or will merge or consolidate with or into the
Company or a Wholly Owned Restricted Subsidiary of the Company that is a
Guarantor; (ii) Investments in the Company by any Restricted Subsidiary of the
Company; PROVIDED that any Indebtedness evidencing such Investment is unsecured
and subordinated, pursuant to a written agreement and to the same extent that
the Series B Securities, the Series C Securities and the Senior Subordinated
Securities are subordinated to Senior Debt, to the Company's Obligations under
the Series B Securities, the Series C Securities, Senior Subordinated Securities
and the Series B Indenture, the Series C Indenture and this Indenture; (iii)
Investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries in the ordinary
course of business for bona fide business purposes in an aggregate principal
amount not to exceed $2.0 million at any one time outstanding; (v) Currency
Agreements and Interest Swap Obligations entered into in the ordinary course of
the Company's or its Restricted Subsidiaries' businesses and otherwise in
compliance with this Indenture; (vi) 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; (vii) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale made in
compliance with the provisions of Section 4.06; (viii) additional Investments
having an aggregate fair market value, when taken together with all other
Investments made pursuant to this clause (viii) that are at that time
outstanding, not to exceed $5.0 million (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (ix) any Investment by the Company or a Restricted
Subsidiary of the Company in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a Qualified
Securitization Transaction; PROVIDED that any Investment in a Securitization
Entity is in the form of a Purchase Money Note or an equity interest; and (x)
Investments in Permitted Businesses made by the Company or any Wholly Owned
Restricted Subsidiary of the Company that is a Guarantor having an aggregate
fair market value, when taken together with all other Investments made pursuant
to this clause (x) after the Issue Date, not to exceed $5.0 million (with the
fair market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value).
"PERMITTED LIENS " means the following types of Liens:
(i) Liens securing Senior Debt and Guarantor Senior Debt
(including Liens securing Indebtedness outstanding under the Credit
Agreement) to the extent that the Indebtedness secured thereby is
permitted to be Incurred pursuant to Section 4.03;
(ii) Liens securing the Series B Securities, the Series C
Securities, the Senior Subordinated Securities and the Subsidiary
Guarantees;
(iii) Liens in favor of the Company or any Wholly Owned
Restricted Subsidiary of the Company on assets of any Restricted
Subsidiary of the Company;
(iv) Liens existing on the Issue Date securing Indebtedness
existing on the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date;
(v) Liens securing Refinancing Indebtedness which is Incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this Indenture and which has been Incurred in accordance with the
provisions of this Indenture, PROVIDED that such Liens (a) are no less
favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced and (b) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing
the Indebtedness so Refinanced;
(vi) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or any of its
Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;
(vii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen and repairmen and other
Liens imposed by law Incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(viii) Liens Incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(ix) judgment Liens not giving rise to an Event of Default so
long as any 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;
(x) 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;
(xi) any interest or title of a lessor under any Capitalized
Lease Obligation, PROVIDED that such Liens do not extend to any property
of asset which is not leased property subject to such Capitalized Lease
Obligation;
(xii) Liens securing Purchase Money Indebtedness of the Company
or any Restricted Subsidiary of the Company, PROVIDED that (a) the
Purchase Money Indebtedness shall not exceed the purchase price or the
cost of construction or improvement of such property or assets, as the
case may be, and shall not be secured by any property or assets of the
Company or any Restricted Subsidiary of the Company other than the
property or assets so acquired, constructed or improved and (b) the Lien
securing such Indebtedness shall be created within 90 days of such
acquisition or completion of construction or improvement;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(xiv) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xv) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(xvi) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under this Indenture;
(xvii) Liens securing Indebtedness under Currency Agreements;
(xviii)Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of custom duties in connection with
the importation of goods;
(xix) Liens securing Acquired Indebtedness Incurred in compliance
with Section 4.03, PROVIDED that (a) such Liens secured such Acquired
Indebtedness at the time of and prior to the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company
and were not granted in anticipation of the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company
and (b) such Liens do not extend to or cover any property or assets of
the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
Incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company; and
(xx) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case Incurred in connection
with a Qualified Securitization Transaction.
"PERMITTED SECURITIZATION" means any financing program providing for the
sale or transfer of Securitization Assets by the Company or its Participating
Subsidiaries, in transactions purporting to be sales (and treated as sales for
GAAP purposes) (1) to one or more limited purpose financing companies, special
purpose entities and/or other financial institutions; (2) in each case, on a
non-recourse basis as to the Company and the Participating Subsidiaries; and (3)
in each case, the fair market value of the Securitization Assets sold or
transferred, including cash in an amount at least equal to 75% of the fair
market value thereof, as determined in accordance with GAAP (for purposes of
this definition, Purchase Money Notes shall be deemed cash).
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization. trust or joint venture, or a
governmental agency or political subdivision thereof.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRIVATE EXCHANGE NOTES" means the "Private Exchange Notes," as defined
in the Registration Rights Agreement.
"PRODUCTIVE ASSETS" means properties and assets (including Capital
Stock) that are used or useful by the Company and its Restricted Subsidiaries in
Permitted Businesses.
"PROPERTIES" means all real property owned, leased or otherwise used or
occupied by the Company or any Subsidiary of the Company, wherever located.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries Incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
construction or improvement, of property or equipment.
"PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company in connection with a Qualified Securitization
Transaction to a Securitization Entity, which note shall be repaid from cash
available to the Securitization Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of newly generated receivables.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series
of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any or its Subsidiaries may sell,
convey or otherwise transfer to (a) a Securitization Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and contract rights and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable.
"RECEIVABLES SUBSIDIARY" means a special purpose, bankruptcy remote
Wholly Owned Subsidiary of the Company which may be formed for the sole and
exclusive purpose of engaging in activities in connection with the purchase,
sale and financing of Securitization Assets in connection with and pursuant to a
Permitted Securitization.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness (the proceeds of which are applied within 60
days after the Incurrence thereof) in exchange or replacement for, such security
or Indebtedness in whole or in part. "Refinanced" and "Refinancing" have
correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness Incurred in accordance with
the provisions of Section 4.03 (other than pursuant to clause (ii), (iv), (v),
(vi), (vii), (viii), (ix), (xi), (xii) or (xiii) of the definition of Permitted
Indebtedness), in each case that does not (1) directly or indirectly result in
an increase in the aggregate principal amount (or accreted value, if applicable)
of Indebtedness of the Company or such Restricted Subsidiary as of the date of
such Refinancing (plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness and plus the amount of
reasonable fees and expenses Incurred by the Company or such Restricted
Subsidiary in connection with such Refinancing) or (2) create Indebtedness with
(A) a Weighted Average Life to Maturity as of the date of such Refinancing that
is less than the Weighted Average Life to Maturity at such time of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; PROVIDED that (x) such
Refinancing Indebtedness shall be Indebtedness solely by the obligor of the
Indebtedness being Refinanced and (y) if such Indebtedness being Refinanced is
subordinate or junior to the Series B Securities, the Series C Securities, the
Senior Subordinated Securities or a Subsidiary Guarantee, then such Refinancing
Indebtedness shall be subordinate to the Senior Subordinated Securities or such
Subsidiary Guarantee, as the case may be, at least to the same extent and in the
same manner as the Indebtedness being Refinanced.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of April 1, 1999, among the Company, the Guarantors and the Holders.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative in respect of any Senior Debt or Guarantor Senior Debt; PROVIDED
that if, and for so long as, any Senior Debt or Guarantor Senior Debt lacks such
a representative, then the Representative for such Senior Debt or Guarantor
Senior Debt shall at all times constitute the holders of a majority in
outstanding principal amount of such Senior Debt or Guarantor Senior Debt in
respect of any Senior Debt or Guarantor Senior Debt.
"RESTRICTED SECURITIES LEGEND" means the legend to substantially the
following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, BUT HAS
BEEN ISSUED IN RELIANCE ON AN EXEMPTION FROM SUCH REGISTRATION, AND IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER DESCRIBED IN THE NOTE
PURCHASE AGREEMENT DATED APRIL 1, 1999 AMONG CADMUS COMMUNICATIONS
CORPORATION, J.P. MORGAN VENTURES CORPORATION AND FIRST UNION INVESTORS,
INC. (THE "NOTE PURCHASE AGREEMENT'). NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT (I) IN
ACCORDANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE NOTE
PURCHASE AGREEMENT AND (II) PURSUANT TO THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN AVAILABLE EXEMPTION THEREFROM.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"ROLL-OVER NOTES" means any of the Company's Senior Subordinated Notes
due 2009 issued upon the Initial Maturity Date of the Senior Subordinated Notes
pursuant to the provisions of this Indenture and guaranteed by the Guarantors.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of the Company of any
property, whether owned by the Company or any Restricted Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"SECURITIZATION ASSETS" means all accounts receivable (whether now
existing or arising in the future) of the Company or any of its Participating
Subsidiaries which are sold or transferred pursuant to a Permitted
Securitization, and any assets related thereto, including without limitation (i)
all collateral given by any of the foregoing, (ii) all contracts and all
guarantees (but not by the Company or any of its Subsidiaries) or other
obligations directly related to any of the foregoing, (iii) other related assets
including those set forth in the Securitization Documents, and (iv) proceeds of
all of the foregoing.
"SECURITIZATION DOCUMENTS" shall mean all documentation relating to any
Permitted Securitization.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) 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
Securitization Entity: (a) no portion of the Indebtedness or any other
obligation (contingent or otherwise) of which (i) is guaranteed by the Company
or any Subsidiary of the Company (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings), (ii) is recourse to or obligates the Company or
any Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of the
Company or any Subsidiary of the Company, directly or indirectly, contingently
or otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither the Company nor any
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or such
Subsidiary 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 receivables of such entity, and (c) to
which neither the Company nor any 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 such designation by the
Board of Directors of the Company shall be evidenced to the Trustee by filing
with the Trustee a Board Resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"SECURITIZATION FACILITY ATTRIBUTED DEBT" at any time means, without
duplication, the aggregate net outstanding amount theretofore paid to the
Receivables Subsidiary, the Company or any Participating Subsidiary in respect
of the Securitization Assets sold or transferred by it in connection with a
Permitted Securitization (it being the intent of the parties that the amount of
Securitization Facility Attributed Debt at any time outstanding approximate as
closely as possible the principal amount of Indebtedness which would be
outstanding at such time under the Permitted Securitization if the same were
structured as a secured lending agreement rather than a purchase agreement).
"SENIOR DEBT" means, the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, Incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Senior Subordinated Securities. Without
limiting the generality of the foregoing, "Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of (1) all monetary obligations of every nature of the Company under the Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (2) all Interest Swap Obligations (including guarantees thereof),
and (3) all obligations under Currency Agreements (including guarantees
thereof), in each case, whether outstanding on the Issue Date or thereafter
Incurred. Notwithstanding the foregoing, "Senior Debt" shall not include (i) any
Indebtedness of the Company to any Subsidiary or Affiliate of the Company, or
any Subsidiary of such Affiliate, (ii) Indebtedness to, or guaranteed on behalf
of, any shareholder, director, officer or employee of the Company or any
Subsidiary of the Company (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts Incurred
in connection with obtaining goods, materials or services, (iv) Indebtedness
represented by Disqualified Capital Stock, (v) any liability for federal, state,
local or other taxes owed or owing by the Company, (vi) that portion of any
Indebtedness Incurred in violation of Section 4.03 (but, as to any such
obligation, no such violation shall be deemed to exist for purposes of this
clause (vi) if the holder(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Company to the
effect that the Incurrence of such Indebtedness does not (or, in the case of
revolving credit indebtedness, that the Incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (vii) Indebtedness which,
when Incurred and without respect to any election under Section 1111(b) of Title
11 of the United States Code, is without recourse to the Company, and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company. The Senior Subordinated Securities are
intended to constitute Senior Debt (as such term is defined in each of the
Series B Indenture and the Series C Indenture) for purposes of the Series B
Indenture and the Series C Indenture.
"SENIOR SUBORDINATED NOTES" shall have the meaning set forth in the
Recitals hereto.
"SENIOR SUBORDINATED SECURITIES" shall have the meaning set forth in the
Recitals hereto.
"SERIES B INDENTURE" means the indenture, dated the date hereof, among
the Company, the guarantors named therein and Wilmington Trust Company, as
trustee, as amended or supplemented from time to time, relating to $60.0 million
in aggregate principal amount of the Company's senior subordinated increasing
rate notes, Series B.
"SERIES C INDENTURE" means the indenture, dated the date hereof, among
the Mack Printing Company, the guarantors named therein and Wilmington Trust
Company, as trustee, as amended or supplemented from time to time, relating to
$10.0 million in aggregate principal amount of the Mack Printing Company's
senior subordinated increasing rate notes, Series C.
"SERIES B NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series B Indenture.
"SERIES C NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series C Indenture.
"SERIES B SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series B Indenture.
"SERIES C SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series C Indenture.
"SIGNIFICANT SUBSIDIARY" with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act; PROVIDED, HOWEVER, that, for purposes of Section 4.13, such
satisfaction shall be determined based on 5.0%, rather than 10.0%.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which are reasonably customary in an accounts
receivable transaction.
"STATED MATURITY" means, with respect to any installment of principal or
interest on any Senior Subordinated Securities, the date on which such payment
of principal or interest was scheduled to be paid pursuant hereto, and shall not
include any contingent obligations to repay, redeem or repurchase any such
principal or interest prior to the date scheduled for the payment thereof.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of April 1, 1999, by and among the Company, Melham U.S. Inc., Purico (IOM) Ltd.
and Paul F. Mack, as such agreement may be supplemented or amended.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation a
majority of whose Voting Stock shall at the time be owned, directly or
indirectly, by such Person, or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person.
"SUBSIDIARY GUARANTEE" means any guarantee of the Senior Subordinated
Securities by a Guarantor pursuant to Article XI.
"TAKE-OUT SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, including the Take-Out Senior Subordinated Debt, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, in each case issued in compliance with the terms of the
Credit Agreement as in effect on the Issue Date.
"TAKE-OUT SENIOR SUBORDINATED DEBT" means unsecured notes or debentures
of the Company (which may be guaranteed by one or more of the Guarantors on a
senior subordinated basis), subordinated to the prior payment of the Senior
Debt, that may be issued by the Company after the Issue Date solely to Refinance
the Indebtedness represented by the Senior Subordinated Notes, the Series B
Notes and the Series C Notes.
"THIRD PARTIES" means all lessees, sublessees, licensees and other users
of the Properties in the ordinary course of the Company's business and on a
temporary basis.
"THREE-MONTH LIBOR" means, for any LIBOR Period, the rate for deposits
in Dollars for a three-month period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the first day of such LIBOR Period. If such rate
does not appear on Telerate page 3750, the rate for that determination date will
be determined on the basis of the rate offered by Morgan Guaranty Trust Company
of New York at approximately 11:00 a.m., London time, on that day to prime banks
in the London interbank market for Dollar deposits for a three-month period. If
Three-Month LIBOR cannot be determined with respect to any LIBOR Period using
the foregoing methods, the rate for such Interest Period will be Three-Month
LIBOR as in effect during the preceding LIBOR Period. "Telerate Page 3750" means
the display page currently so designated on the Dow Jones Telerate Service (or
such other page as may replace that page on that service for the purpose of
displaying comparable rates or prices).
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture (except as provided in Section 9.03) until such time
as this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA.
"TOTAL LEVERAGE RATIO" means, as of any date, the ratio of (i)
Consolidated Total Debt as of such date to (ii) Consolidated Cash Flow for the
Four Quarter Period (as defined in the definition of "Consolidated Fixed Charge
Coverage Ratio") most recently ended on or prior to such date.
"TRANSFER RESTRICTED SECURITIES" means Senior Subordinated Securities
that bear or are required to bear the Restricted Securities Legend.
"TRUSTEE" means the party named as such in the introductory paragraphs
of this Indenture until a successor replaces it and, thereafter, means the
successor.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer of the Trustee assigned by the Trustee to administer this
Indenture.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America that as at the time of payment shall be legal tender for the payment of
public and private debts.
"UNRESTRICTED SUBSIDIARY" of any Person means (1) any Subsidiary of such
Person formed or acquired after the Issue Date that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the Board of
Directors of such Person in compliance with Section 4.24 of this Indenture; and
(2) any Subsidiary of an Unrestricted Subsidiary.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency) and, with respect to the Company, shall be
deemed to include the Common Stock of the Company.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any Wholly
Owned Subsidiary of such Person which, at the time of determination, is a
Restricted Subsidiary of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding Voting Stock (other than in the case of a
Subsidiary that is incorporated in a jurisdiction other than a State in the
United States or the District of Columbia, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) is owned by such Person or any Wholly Owned Subsidiary of such
Person.
SECTION 1.02 Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Acceleration Notice"........................ 6.02
"Affiliate Transaction"...................... 4.08
"Agent Members".............................. 2.13(a)
"Bankruptcy Law"............................. 6.01
"Change of Control Date"..................... 4.09(a)
"Change of Control Offer".................... 4.09
"Change of Control Payment Date"............. 4.09(c)
"Covenant Defeasance"........................ 8.01(c)
"CUSIP"...................................... 2.12
"custodian".................................. 6.01
"Defeasance Trust Payment"................... 10.02
"Events of Default".......................... 6.01
"Exchange Offer ............................. 2.01
"Exchange Registration Statement............. 2.01
"Guarantor Blockage Period".................. 12.02
"Guarantor Default Notice"................... 12.02
"Guaranteed Obligations...................... 11.01
"Incur"...................................... 4.03
"Indemnified Party".......................... 7.07
"Legal Defeasance"........................... 8. 01(b)
"Legal Holiday".............................. 13.08
"Net Proceeds Offer.......................... 4.06(a)
"Net Proceeds Offer Amount".................. 4.06(a)
"Net Proceeds Offer Payment Date"............ 4.06(a)
"Net Proceeds Offer Trigger Date"............ 4.06(a)
"Net Proceeds Trigger Date".................. 4.06(a)
"outstanding"................................ 8. 01(b)
"Paying Agent"............................... 2.03
"Payment Blockage Notice".................... 10.02
"Payment Blockage Period".................... 10.02
"Reference Date"............................. 4.04
"Registrar".................................. 2.03
"Restricted Payment"......................... 4.04
"Revolving Credit Commitment: 6.02
"Securities Register"........................ 2.06
"Surviving Entity"........................... 5.01
"Term Loan Commitment"................................. 6.02
</TABLE>
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the United States Securities and Exchange Commission.
"indenture securities" means the Senior Subordinated Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, each Guarantor
and any other obligor on the Senior Subordinated Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them by such
definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular; and
(6) "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE SENIOR SUBORDINATED SECURITIES
SECTION 2.01 Form and Dating; Issuance. (a) The Senior
Subordinated Notes, the notation thereon relating to the Subsidiary Guarantees,
and the Trustee's certificate of authentication thereon shall be substantially
in the form of Exhibit A, which is hereby incorporated in and expressly made a
part of this Indenture. Any Roll-Over Notes, the notation thereon relating to
the Subsidiary Guarantees, and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit B, which is hereby
incorporated in and expressly made a part of this Indenture. Any Exchange Notes
or Private Exchange Notes, the notation thereon relating to the Subsidiary
Guarantees, and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit B; PROVIDED that, in the case of the
Exchange Note, such Exchange Notes shall not bear the Restricted Securities
Legend. The Senior Subordinated Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company or any Guarantor is subject, if any, or usage. Each Senior Subordinated
Security shall be dated the date of its authentication. The terms of the Senior
Subordinated Securities and the Subsidiary Guarantees set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture. The Senior Subordinated
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof.
(b) The Senior Subordinated Securities shall be represented by
certificates registered in the names of the Holders and may be represented by
one or more Global Senior Subordinated Securities. The aggregate principal
amount of any Global Senior Subordinated Security may from time to time be
increased or decreased in accordance with the provisions of this Article II by
adjustments made on the records of the Trustee as Custodian.
(c) On the Issue Date, the Company shall issue, and the Trustee
shall authenticate in accordance with Section 2.02, the Senior Subordinated
Notes in an aggregate principal amount of $40,000,000. On the Issue Date, each
Guarantor shall execute a Subsidiary Guarantee in the manner set forth in
Article XI.
(d) If the Company has not redeemed or repaid the Senior
Subordinated Notes in full on or prior to the Initial Maturity Date, the
Holders, subject to the provisions of this Section 2.01(d), on the Initial
Maturity Date shall exchange their Senior Subordinated Notes for Roll-Over Notes
in an equal aggregate principal amount and the Company shall issue (and, in the
case of the Subsidiary Guarantees, each Guarantor shall execute), and the
Trustee shall authenticate in accordance with Section 2.02, Roll-Over Notes in
an aggregate principal amount equal to the aggregate principal amount of Senior
Subordinated Notes then outstanding. The obligation of the Holders to exchange
their Senior Subordinated Notes for Roll-Over Notes is subject to the condition
that no Default or Event of Default under Section 6.01(a), (b) or (d) shall have
occurred and be continuing on the Initial Maturity Date.
(e) At such time as an "Exchange Registration Statement" (as
defined in the Registration Rights Agreement) has been declared effective by the
Commission and an "Exchange Offer" (as defined in the Registration Rights
Agreement) has been consummated as contemplated by the Registration Rights
Agreement, the Company shall issue (and, in the case of the Subsidiary
Guarantees, each Guarantor shall execute), and the Trustee shall authenticate in
accordance with Section 2.02, Exchange Notes in an aggregate principal amount
equal to the principal amount of Roll-Over Notes surrendered for exchange or
Private Exchange Notes in accordance with the Registration Rights Agreement.
SECTION 2.02 Execution and Authentication. Two Officers of the
Company shall sign the Senior Subordinated Securities by manual or facsimile
signature.
If an Officer whose signature is on a Senior Subordinated
Security no longer holds that office at the time the Trustee authenticates the
Senior Subordinated Security, the Senior Subordinated Security shall be valid
nevertheless.
A Senior Subordinated Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Senior Subordinated Security. The signature shall be
conclusive evidence that the Senior Subordinated Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
upon a written order of the Company signed by two of its Officers (1) Senior
Subordinated Notes for original issue on the Issue Date in an aggregate
principal amount of $40,000,000, (2) subject to Section 2.01(d), Roll-Over Notes
in an aggregate principal amount equal to the aggregate principal amount of
Senior Subordinated Notes then outstanding and (3) subject to Section 2.01(e),
Exchange Notes or Private Exchange Notes, as the case may be, issued upon
surrender of an equal aggregate principal amount of Roll-Over Notes in an
Exchange Offer. Such order shall specify the amount of the Senior Subordinated
Securities to be authenticated, the date on which the original issue of Senior
Subordinated Securities is to be authenticated and whether the Senior
Subordinated Securities are to be Senior Subordinated Notes, Roll-Over Notes or
Exchange Notes. The aggregate principal amount of Senior Subordinated Securities
outstanding at any time may not exceed $40,000,000, except as provided in
Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Senior Subordinated Securities.
Any such appointment shall be evidenced by an instrument signed by a Trust
Officer of the Trustee, a copy of which shall be furnished to the Company.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Senior Subordinated Securities whenever the Trustee may do so.
After any such appointment, each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An authenticating agent
has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
SECTION 2.03 Registrar and Paying Agent. The Company shall
maintain an office or agency where Senior Subordinated Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Senior Subordinated Securities may be presented for
payment (the "Paying Agent"). The Company may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company may act as Paying Agent, Registrar, co-registrar or transfer agent;
PROVIDED that the Company may not act as Paying Agent for purposes of Article
III, Article VIII, and Sections 4.06 and 4.09.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Senior Subordinated Securities.
The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Senior Subordinated Securities, and
the Trustee shall initially be the Custodian with respect to the Global Senior
Subordinated Securities.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee, PROVIDED that no
such removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company
and such successor Registrar or Paying Agent, as the case may be, and delivered
to the Trustee or (2) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
not less than three Business Days' prior written notice to the Company;
PROVIDED, HOWEVER, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04 Paying Agent To Hold Money in Trust. Prior to 11:00
a.m., New York City time, on each due date of the principal and interest on any
Senior Subordinated Security, the Company shall deposit with the Paying Agent
(or if the Company is acting as Paying Agent, segregate and hold in trust for
the benefit of the Persons entitled thereto) a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Senior Subordinated Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Senior Subordinated Securities and shall notify the Trustee
in writing of any default by the Company in making any such payment within one
Business Day thereof. If the Company acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05 Senior Subordinated Securityholder Lists. The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders of Senior
Subordinated Securities. If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Senior Subordinated Securities.
SECTION 2.06 Registration of Transfer and Exchange. The Senior
Subordinated Securities shall be issued in registered form only. The Company
shall cause to be kept at the principal corporate trust office of the Trustee a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Registrar shall provide for the
registration of transfer of Senior Subordinated Securities entitled to be
transferred as herein provided or the exchange of Senior Subordinated Securities
for an equal principal amount of Senior Subordinated Securities of other
authorized denominations. To permit registration of transfers and exchanges, the
Company shall execute (and, in the case of the Subsidiary Guarantees, each
Guarantor shall execute) and the Trustee shall authenticate Senior Subordinated
Securities at the Registrar's or co-registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the Registrar may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any registration of transfer or exchange
pursuant to this Section 2.06 (other than any such taxes, assessments or other
governmental charges payable upon transfers or exchanges pursuant to Sections
2.09, 3.06, 4.09, and 9.05). The Registrar need not register transfers or
exchanges of Senior Subordinated Securities selected for redemption (except, in
the case of Senior Subordinated Securities to be redeemed in part, the portion
thereof not to be redeemed) or transfers or exchanges of any Senior Subordinated
Securities for a period of 15 days before a selection of Senior Subordinated
Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Senior Subordinated Security, the Company, each Guarantor, the Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the Person in
whose name a Senior Subordinated Security is registered as the absolute owner of
such Senior Subordinated Security for the purpose of receiving payment of
principal of and accrued and unpaid interest on such Senior Subordinated
Security and for all other purposes whatsoever, whether or not such Senior
Subordinated Security is overdue, and none of the Company, any Guarantor, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
Any Holder of a Global Senior Subordinated Security shall, by
acceptance of such Global Senior Subordinated Security, agree that transfers of
beneficial interests in such Global Senior Subordinated Security may be effected
only through the Depositary, in accordance with the provisions of this Indenture
and such Depositary's usual procedures.
All Senior Subordinated Securities issued upon any registration
of transfer or exchange pursuant to this Section 2.06 will evidence the same
debt and will be entitled to the same benefits under this Indenture as the
Senior Subordinated Securities surrendered upon such registration of transfer or
exchange.
SECTION 2.07 Replacement Senior Subordinated Securities. If a
mutilated Senior Subordinated Security is surrendered to the Registrar or if the
Holder of a Senior Subordinated Security claims that the Senior Subordinated
Security has been lost, destroyed or wrongfully taken, the Company shall issue
(and, in the case of the Subsidiary Guarantees, each Guarantor shall issue) and
the Trustee shall authenticate a replacement Senior Subordinated Security if the
Holder satisfies any reasonable requirements of the Trustee including evidence
of the destruction, loss or theft of the Senior Subordinated Security. If
required by the Trustee or the Company, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Trustee to protect the Company, the
Guarantors, the Trustee, the Paying Agent, the Registrar and any co-registrar
from any loss that any of them may suffer if a Senior Subordinated Security is
replaced. The Company and the Trustee may charge the Holder for their reasonable
out-of-pocket expenses in replacing a Senior Subordinated Security, including
the payment of a sum sufficient to cover any tax or other governmental charge
that may be required. In the event any such mutilated, lost, destroyed or
wrongfully taken Senior Subordinated Security has become or is about to become
due and payable, the Company in its discretion may pay such Senior Subordinated
Security instead of issuing a new Senior Subordinated Security in replacement
thereof.
Every replacement Senior Subordinated Security is an additional
obligation of the Company.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Senior Subordinated Securities.
SECTION 2.08 Outstanding Senior Subordinated Securities. The
Senior Subordinated Securities outstanding at any time are all Senior
Subordinated Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding. A Senior Subordinated Security does not cease
to be outstanding because the Company, any Guarantor or an Affiliate of the
Company or any Guarantor holds the Senior Subordinated Security.
If a Senior Subordinated Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee and the Company receive
proof satisfactory to them that the replaced Senior Subordinated Security is
held by a protected purchaser (as defined in Article 8 of the Uniform Commercial
Code).
If the Paying Agent (other than the Company or any Subsidiary of
the Company) segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date U.S. Legal Tender sufficient to pay all
principal and interest payable on that date with respect to the Senior
Subordinated Securities (or portions thereof) to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Holders of Senior Subordinated Securities on that date pursuant to the terms
of this Indenture, then on and after that date such Senior Subordinated
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09 Temporary Senior Subordinated Securities. Until
definitive Senior Subordinated Securities are ready for delivery, the Company
may prepare (and, in the case of the Subsidiary Guarantees, each Guarantor shall
prepare) and the Trustee shall authenticate temporary Senior Subordinated
Securities. Temporary Senior Subordinated Securities shall be substantially in
the form of definitive Senior Subordinated Securities. Without unreasonable
delay, the Company shall prepare (and, in the case of the Subsidiary Guarantees,
each Guarantor shall prepare) and the Trustee shall authenticate definitive
Senior Subordinated Securities and deliver them in exchange for temporary Senior
Subordinated Securities upon surrender of such temporary Senior Subordinated
Securities at the office or agency of the Company, without charge to the Holder.
SECTION 2.10 Cancellation. The Company at any time may deliver
Senior Subordinated Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Senior Subordinated
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Senior Subordinated Securities surrendered
for registration of transfer, exchange, payment or cancellation and dispose of
such Senior Subordinated Securities in accordance with its customary procedures,
unless the Company otherwise directs in writing to the Trustee. The Company may
not issue new Senior Subordinated Securities to replace Senior Subordinated
Securities that have been redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Senior Subordinated Securities
in place of canceled Senior Subordinated Securities other than pursuant to the
terms of this Indenture.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Senior Subordinated Securities, the Company shall pay
the defaulted interest (plus interest on such defaulted interest at the rate
then payable in respect of such Senior Subordinated Securities to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to the
Persons who are Holders of Senior Subordinated Securities on a subsequent
special record date. The Company shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Trustee and
shall promptly mail or cause to be mailed to each Holder of Senior Subordinated
Securities a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any
other lawful manner not inconsistent with the requirements (if applicable) of
any securities exchange on which the Senior Subordinated Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this paragraph, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.12 CUSIP Numbers. The Company in issuing the Senior
Subordinated Securities may use "CUSIP" numbers (if then generally in use) and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Senior Subordinated Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Senior Subordinated Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any changes in "CUSIP" numbers for the
Senior Subordinated Securities.
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities. If the Senior Subordinated Securities are issued in the form of a
Global Senior Subordinated Security, the following provisions shall apply:
(a) Each Global Senior Subordinated Security initially shall (i)
be registered in the name of the Depositary for such Global Senior
Subordinated Security or the nominee of such Depositary and (ii) be
delivered to the Trustee as the initial Custodian for such Depositary.
Beneficial interests in Global Senior Subordinated Securities may be
held indirectly through members of or participants in ("Agent Members")
the Depositary.
Agent Members shall have no rights under this Indenture with
respect to any Global Senior Subordinated Security held on their behalf
by the Depositary, or the Trustee as Custodian, or under such Global
Senior Subordinated Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Senior Subordinated Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Senior
Subordinated Security.
(b) Transfers of a Global Senior Subordinated Security shall be
limited to transfers of such Global Senior Subordinated Security in
whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Senior
Subordinated Security may be transferred in accordance with the rules
and procedures of the Depositary (and Agent Member, if applicable) and
the provisions of Section 2.14. The Trustee shall register the transfer
of Senior Subordinated Securities to all beneficial owners in exchange
for their beneficial interests in a Global Senior Subordinated Security
if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Senior Subordinated
Security or the Depositary ceases to be a clearing agency registered
under the Exchange Act, at a time when the Depositary is required to be
so registered in order to act as Depositary, and in each case a
successor Depositary is not appointed by the Company within 90 days of
such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Senior
Subordinated Security shall be so exchangeable or (iii) an Event of
Default has occurred and is continuing and the Registrar has received a
request from the Trustee or the Depositary to permit such transfers.
SECTION 2.14 Special Transfer Provisions. Unless and until a
Transfer Restricted Security is transferred or exchanged under an effective
registration statement under the Securities Act, the following provisions shall
apply:
(a) Upon the registration of transfer, exchange or replacement of
Senior Subordinated Securities not bearing the Restricted Securities
Legend, the Registrar shall deliver Senior Subordinated Securities that
do not bear the Restricted Securities Legend. Upon the registration of
transfer, exchange or replacement of Senior Subordinated Securities
bearing the Restricted Securities Legend, the Registrar shall deliver
only Senior Subordinated Securities that bear the Restricted Securities
Legend unless (i) the requested transfer is after the second anniversary
of the Issue Date (PROVIDED, HOWEVER, that neither the Company nor any
Affiliate of the Company has held any beneficial interest in such Senior
Subordinated Security, or portion thereof, at any time prior to the
second anniversary of the Issue Date) or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company
and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(b) By its acceptance of any Senior Subordinated Security bearing
the Restricted Securities Legend, each Holder of such a Senior
Subordinated Security acknowledges that transfer of such Senior
Subordinated Security may be restricted pursuant to the provisions of
the Securities Act as set forth in the Restricted Securities Legend and
agrees that it shall transfer such Senior Subordinated Security only in
a transaction that is exempt from the registration requirements of the
Securities Act.
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes. Notwithstanding any other provision of this Indenture, prior to the
Initial Maturity Date, (i) no registration of transfer of any Senior
Subordinated Note and (ii) no Lien (other than Liens contemplated by the Stock
Purchase Agreement) of any kind shall be created in or placed on any Senior
Subordinated Note, in each case without the written consent of the Company,
which consent shall not be unreasonably withheld (it being understood that
solely because any registration of transfer results in an increase in the number
of Holders of Senior Subordinated Notes to not more than eight Holders shall not
constitute reasonable grounds for withholding such consent); PROVIDED, HOWEVER,
that the registration of transfer to, and the creation of Liens in favor of,
Affiliates of such Holders shall not be prohibited by this Section 2.15.
ARTICLE III
REDEMPTION
SECTION 3.01 Notices to Trustee. If the Company elects to redeem
Senior Subordinated Securities pursuant to Section 3.07 or is required to redeem
Senior Subordinated Notes pursuant to Section 3.08, it shall notify the Trustee
in writing of the redemption date, the redemption price, the principal amount of
Senior Subordinated Securities to be redeemed and the Section of this Indenture
pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section 3.01 not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but no more than
60 days before the redemption date unless the Trustee consents to a shorter
period. Such notice shall be accompanied by an Officers' Certificate and an
Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. Any such notice may be canceled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.02 Selection. If less than all of the Senior
Subordinated Securities are to be redeemed at any time, selection of Senior
Subordinated Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Senior Subordinated Securities are listed, or, if the Senior
Subordinated Securities are not so listed, on a PRO RATA basis, by lot or by
such method as the Trustee shall deem fair and appropriate; PROVIDED that no
Senior Subordinated Security of $1,000 or less shall be redeemed in part. If any
Senior Subordinated Security is to be redeemed in part only, the notice of
redemption that relates to such Senior Subordinated Security shall state the
portion of the principal amount thereof to be redeemed. On and after the
redemption date, unless the Company defaults in making the redemption payment or
the Paying Agent is prohibited from making the redemption payment pursuant to
the terms of this Indenture, interest ceases to accrue on Senior Subordinated
Securities or portions of them called for redemption.
SECTION 3.03 Notice. Notices of redemption shall be mailed by
first class mail not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but not more than
60 days before the redemption date to each Holder of Senior Subordinated
Securities to be redeemed at its registered address. Notices of redemption may
not be conditional. The Trustee shall notify the Company promptly of the Senior
Subordinated Securities or portions of Senior Subordinated Securities to be
redeemed.
The notice shall identify the Senior Subordinated Securities to
be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Senior Subordinated Securities called for redemption
must be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Senior Subordinated
Securities are to be redeemed, the certificate numbers and principal
amounts of the particular Senior Subordinated Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Senior Subordinated
Securities (or portion thereof) called for redemption ceases to accrue
on and after the redemption date;
(7) the paragraph of the Senior Subordinated Securities or the
Section of this Indenture pursuant to which the Senior Subordinated
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Senior Subordinated
Securities being redeemed;
(9) in the case of a partial redemption, that any Holder of a
Senior Subordinated Security redeemed in part shall receive a
replacement Senior Subordinated Security in the principal amount equal
to the principal amount of the Senior Subordinated Security not so
redeemed; and
(10) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Senior Subordinated Securities.
At the Company's request (which may be revoked at any time in
writing prior to the time at which the Trustee shall have given such notice to
the Holders), the Trustee shall give the notice of redemption in the Company's
name and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section 3.03.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed, Senior Subordinated Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Senior Subordinated
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest to the redemption date; PROVIDED that if the redemption date is
after a regular record date and on or prior to the interest payment date, the
accrued interest shall be payable to the Holder of the redeemed Senior
Subordinated Securities registered on the relevant record date. If mailed in the
manner herein, the notice shall be conclusively presumed to have been given
whether or not the Holder receives such notice. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05 Deposit of Redemption Price. Prior to 11:00 a.m. New
York City time on the redemption date, the Company shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the redemption price of and accrued
interest on all Senior Subordinated Securities to be redeemed on the redemption
date other than Senior Subordinated Securities or portions of Senior
Subordinated Securities called for redemption that have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06 Senior Subordinated Securities Redeemed in Part.
Upon surrender of a Senior Subordinated Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Senior Subordinated Security equal in principal amount
to the unredeemed portion of the Senior Subordinated Security surrendered.
SECTION 3.07 Optional Redemption. The Company may at any time and
from time to time redeem the Senior Subordinated Notes, in whole or in part,
without premium (except as otherwise provided in this Section 3.07) or penalty,
at a price equal to the principal amount so to be redeemed plus all accrued and
unpaid interest. Prior to April 1, 2004, the Company may not redeem Roll-Over
Notes, Exchange Notes or Private Exchange Notes. From and after such date, the
Company may at any time and from time to time redeem the Roll-Over Notes,
Exchange Notes or Private Exchange Notes in whole or in part, at a price equal
to the principal amount so to be redeemed multiplied by the Applicable Call
Premium, plus all accrued and unpaid interest to the date of redemption. Partial
redemptions pursuant to this Section 3.07 shall be in an aggregate principal
amount of $500,000 (in the aggregate as to all Senior Subordinated Securities)
or a whole multiple of $100,000 in excess thereof. Notwithstanding anything to
the contrary contained above, if any redemption is made pursuant to this Section
3.07 within 30 days of the occurrence of any Change of Control, the Applicable
Call Premium shall be accompanied by a redemption premium in an amount equal to
1% of the principal amount of Senior Subordinated Securities so redeemed. If any
redemption is made pursuant to this Section 3.07 without the payment of such a
redemption premium, and any Change of Control occurs within 30 days thereafter,
on the date of the occurrence of such Change of Control the premium provided in
the immediately preceding sentence shall be due and payable on such date
(notwithstanding that all other amounts pursuant to this Indenture may
theretofore have been repaid).
SECTION 3.08 Mandatory Redemption. (a) If, prior to the Initial
Maturity Date, the Company or any of its Subsidiaries shall issue any Take-Out
Securities, 100% of the Net Cash Proceeds thereof shall, on the date of the
Company's or any such Subsidiary's receipt thereof, be deposited with the Paying
Agent, so long as, with respect to Take-Out Securities other than Take-Out
Senior Subordinated Debt, with respect to the Take-Out Securities other than
Take-Out Senior Subordinated Debt, such deposit is permitted by the terms of the
Credit Agreement, to be applied to redeem Senior Subordinated Notes at a price
equal to the principal amount so to be redeemed plus all accrued and unpaid
interest and any reasonable break funding fees incurred by the Holder thereof in
connection therewith, PROVIDED that the Company's failure to so deposit such
amounts (and so long as, with respect to the Take-Out Securities other than
Take-Out Senior Subordinated Debt, such deposit is permitted by the terms of the
Credit Agreement) shall constitute an Event of Default under Section 6.01(b);
(b) If the Company or any of its Restricted Subsidiaries shall
apply, or be required to apply, any Net Cash Proceeds pursuant to Section
4.06(a) to redeem Senior Subordinated Securities, such Net Cash Proceeds shall,
on the date of the Company's (or any of its Restricted Subsidiaries') receipt
thereof (or such later date as is provided in the last sentence of Section
4.06(a), to the extent relevant) be deposited with the Paying Agent (so long as
such deposit is permitted by the terms of the Credit Agreement) to be applied to
redeem such Senior Subordinated Securities.
(c) All redemptions made pursuant to the provisions of this
Section 3.08 shall be made at par. In addition, each redemption payment made
pursuant to this Section 3.08 with respect to any Senior Subordinated Securities
shall be accompanied by the payment of accrued and unpaid interest (through the
date the redemption is actually effected) on the principal amount of Senior
Subordinated Notes to be so redeemed; PROVIDED that any such redemption payment
made with respect to any Senior Subordinated Notes shall be accompanied by any
reasonable break funding fees incurred by the Holder thereof in connection
therewith. Notwithstanding anything to the contrary contained above in Section
3.08(a), the Company shall use good faith efforts to provide notices of any
mandatory redemption pursuant to Section 3.08(a) sufficiently in advance of its
receipt of the proceeds or the occurrence of the event which will require a
redemption pursuant to this Section 3.08 so that the respective mandatory
redemption may be made on the date of the Company's receipt of such proceeds.
SECTION 3.09 Senior Subordinated Securities Acquired by the
Company. Any Senior Subordinated Security redeemed or repurchased or otherwise
acquired by the Company shall be surrendered to the Trustee for cancellation.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Senior Subordinated Securities. The
Company shall promptly pay the principal of and interest on the Senior
Subordinated Securities on the dates and in the manner provided in the Senior
Subordinated Securities, in this Indenture and in the Registration Rights
Agreement. An installment of principal and interest shall be considered paid on
the date due if on such date the Trustee or the Paying Agent (but only if other
than the Company, a Guarantor or any of their respective Affiliates) holds by
11:00 a.m., New York City time, in accordance with this Indenture U.S. Legal
Tender sufficient to pay such installment and the Trustee or the Paying Agent,
as the case may be, is not prohibited from paying such money to the Holders of
Senior Subordinated Securities on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal (including
post-petition interest in an action or proceeding under any Bankruptcy Law) at
the rate specified therefor in the Senior Subordinated Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
SECTION 4.02 Reports. The Company will deliver to the Trustee,
within 15 days after the filing of the same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company will file with the Commission, to the extent
permitted, and provide the Trustee and Holders or prospective Holders (upon
request) with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the other provisions of TIA ss. 314(a).
SECTION 4.03 Incurrence of Indebtedness. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "Incur") any Indebtedness (other than Permitted
Indebtedness); PROVIDED, HOWEVER, that so long as (i) no Default or Event of
Default shall have occurred and be continuing at the time of, or as a
consequence of, the Incurrence of any such Indebtedness and (ii) no Senior
Subordinated Notes are then outstanding, the Company and any Guarantor may Incur
Indebtedness (including, without limitation, Acquired Indebtedness), in each
case if on the date of the Incurrence of such Indebtedness, after giving effect
to the Incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than (x) 2.75 to 1.0 if such Indebtedness is Incurred on or
before April 1, 2001, or (y) 3.0 to 1.0 if such Indebtedness is Incurred
thereafter.
SECTION 4.04 Restricted Payments. The Company will not, and will
not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, (a) declare or pay any dividend or make any distribution (other than
(x) dividends or distributions made to the Company or any Wholly Owned
Restricted Subsidiary of the Company that is a Guarantor and (y) dividends or
distributions payable in Qualified Capital Stock of the Company or in warrants,
rights or options to purchase or acquire shares of such Qualified Capital Stock)
on or in respect of shares of Capital Stock of the Company or any Restricted
Subsidiary of the Company to holders of such Capital Stock, (b) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or any
Restricted Subsidiary of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock, (c) make any
Investment (other than Permitted Investments) or (d) make any principal payment
on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire
for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Company or a Restricted
Subsidiary of the Company that is subordinate or junior in right of payment to
the Series B Securities, the Series C Securities, the Senior Subordinated
Securities or such Restricted Subsidiary's Subsidiary Guarantee, as the case may
be (each of the foregoing actions set forth in clauses (a), (b), (c) and (d)
being referred to as a "Restricted Payment"), if (A) any Series B Notes, Series
C Notes, Senior Subordinated Notes are then outstanding or (B) at the time of
such Restricted Payment or immediately after giving effect thereto, (i) a
Default or an Event of Default shall have occurred and be continuing, (ii) the
Company is not able to Incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with the provisions of Section 4.03
or (iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Issue Date (the amount expended for
such purposes, if other than cash, being the fair market value of such property
as determined reasonably and in good faith by the Board of Directors of the
Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net
Earnings (or, if cumulative Consolidated Net Earnings shall be a loss, minus
100% of such loss) of the Company earned subsequent to the Issue Date through
the last day of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (the "Reference Date"), treating such period as a single accounting
period; plus (x) 100% of the aggregate net cash proceeds received by the Company
from any Person (other than a Restricted Subsidiary of the Company) from the
issuance and sale subsequent to the Issue Date and on or prior to the Reference
Date of Qualified Capital Stock of the Company plus (y) to the extent not
otherwise included in the Company's Consolidated Net Earnings, in the case of
the disposition or repayment of any Investment constituting a Restricted Payment
made after the Issue Date, an amount equal to the lesser of (A) the cash return
of capital with respect to such Investment and (B) the initial amount of such
Investment, in either case, less the cost of the disposition of such Investment;
plus (z) without duplication of any amounts included in clause (iii)(x) above,
100% of the aggregate net cash proceeds of any equity contribution received by
the Company from a holder of the Company's Capital Stock.
Notwithstanding anything to the contrary set forth in this
Section 4.04, the Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, make any principal payment on,
purchase, redeem, prepay, defease or otherwise acquire or retire for value,
whether at maturity, upon redemption or otherwise, any Series B Securities or
Series C Securities if any Senior Subordinated Securities are then outstanding;
PROVIDED, HOWEVER, that, upon any Change of Control Offer or Net Proceeds Offer,
the Company may purchase the Series B Securities and Series C Securities in
accordance with the respective indentures pursuant to which such securities were
issued if, (x) in the case of a Change of Control Offer, the Company shall first
have purchased all Senior Subordinated Securities tendered pursuant to such
Change of Control Offer in compliance with the provisions of Section 4.09 and
(y) in the case of a Net Proceeds Offer, any Net Cash Proceeds shall remain
after the consummation of such Net Proceeds Offer in compliance with the
provisions of Section 4.06; PROVIDED, FURTHER, that, in any case, such purchase
shall constitute a Restricted Payment and shall comply with the provisions of
the immediately preceding paragraph.
Notwithstanding the foregoing, the provisions set forth in the
immediately two preceding paragraphs do not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if such
dividend would have been permitted on the date of declaration; (2) if no Default
or Event of Default shall have occurred and be continuing, the redemption,
repurchase or other acquisition or retirement of any shares of Capital Stock of
the Company, either (i) solely in exchange for shares of Qualified Capital Stock
of the Company or (ii) through the application (within 60 days after the sale
thereof) of the net cash proceeds of a sale for cash (other than to a Restricted
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any Indebtedness
(other than the Series B Securities and the Series C Securities) of the Company
or any Guarantor that is subordinate or junior in right of payment to the Senior
Subordinated Securities or such Guarantor's Subsidiary Guarantee, as the case
may be, either (i) solely in exchange for shares of Qualified Capital Stock of
the Company or warrants, rights or options to purchase or acquire shares of
Qualified Capital Stock of the Company or (ii) through the application (within
60 days of the sale thereof) of net proceeds of a sale for cash (other than to a
Restricted Subsidiary of the Company) of (A) shares of Qualified Capital Stock
of the Company or (B) Refinancing Indebtedness; (4) if no Default or Event of
Default shall have occurred and be continuing, repurchases by the Company of
Common Stock of the Company pursuant to repurchase options in stock option
agreements between the Company and employees of the Company and any of its
Subsidiaries from such employees or their authorized representatives upon the
death, disability or termination of employment of such employees, in the
aggregate not to exceed $250,000 in any calendar year, and (5) the declaration
and payment, consistent with past practice, of dividends on shares of the
Company's Common Stock to holders of such Common Stock if, at the time of such
payment and immediately after giving effect thereto, (x) no Default or Event of
Default shall have occurred and be continuing and (y) the Company is able to
Incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with the provisions of Section 4.03. In determining
the aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the first paragraph of this Section 4.04,
amounts expended pursuant to clauses (1), (2)(ii), and (4) and (5) of this
paragraph shall be included in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances, or pay any Indebtedness or other obligation owed, to the Company or
any other Restricted Subsidiary of the Company; or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture, the Senior Subordinated
Securities and the Subsidiary Guarantees; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary of the Company; (4) any agreement governing Acquired
Indebtedness, but only if such encumbrance or restriction shall not apply to any
Person, or the assets of any Person, other than the Person, or the assets of the
Person, so acquired; (5) agreements existing on the Issue Date, to the extent
and in the manner such agreements are in effect on the Issue Date; (6) the
Credit Agreement; (7) any instrument governing a Permitted Lien, to the extent
and only to the extent such instrument restricts the transfer or other
disposition of assets subject to such Permitted Lien; (8) any contract for the
sale of specified assets, including, without limitation, any restriction with
respect to a Restricted Subsidiary of the Company imposed pursuant to any
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary, to be consummated
in accordance with the terms of this Indenture, pending the closing of such sale
or disposition; PROVIDED that any such restriction relates solely to the Capital
Stock or assets that are the subject of such agreement; (9) Indebtedness or
other contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction or the charter documents of such
Securitization Entity; PROVIDED that, in any case, such restrictions apply only
to such Securitization Entity; and (10) any agreement governing Indebtedness
Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to
an agreement referred to in clause (2), (4), (5) or (6) above; PROVIDED,
HOWEVER, that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are not materially more restrictive, as
determined by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, in their reasonable and good faith judgment,
than the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4), (5) or (6).
SECTION 4.06 Asset Sales. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Company or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined
reasonably and in good faith by the Company's Board of Directors), (ii) at least
80% of the consideration received by the Company or such Restricted Subsidiary,
as the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition and (iii) upon the
consummation of an Asset Sale, the Company applies, or causes such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
270 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor
Senior Debt (and, in the case of Senior Debt or Guarantor Senior Debt under any
revolving credit facility, including the Credit Agreement, effect a
corresponding permanent reduction in the availability under such revolving
credit facility), (B) to reinvest in Productive Assets, or (C) a combination of
prepayment and investment permitted by the foregoing clauses (iii)(A) and
(iii)(B). On the 271st day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (iii)(A), (iii)(B) or (iii)(C) of the preceding sentence (each,
a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in such clauses (iii)(A), (iii)(B) and (iii)(C) (each a "Net Proceeds
Offer Amount") shall be applied by the Company or such Restricted Subsidiary, as
the case may be, to make an offer to purchase (the "Net Proceeds Offer") on a
date (the "Net Proceeds Offer Payment Date") not less than 20 Business Days nor
more than 30 Business Days following the date on which the notice of such Net
Proceeds Offer is mailed to the Holders, from all Holders on a PRO RATA basis,
that principal amount of Senior Subordinated Securities equal to the Net
Proceeds Offer Amount at a price equal to 100% of the principal amount of the
Senior Subordinated Securities to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase; PROVIDED, HOWEVER, that if at any time
any non-cash consideration received by the Company or any Restricted Subsidiary
of the Company, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.06.
Notwithstanding the foregoing, the Company may defer the Net Proceeds Offer
until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $5.0 million resulting from one or more Asset Sales (at which time,
the entire unutilized Net Proceeds Offer Amount, and not just the amount in
excess of $5.0 million, shall be applied as required pursuant to this
paragraph). Upon completion of a Net Proceeds Offer, the amount of Net Cash
Proceeds and the amount of aggregate unutilized Net Proceeds Offer Amount will
be reset to zero. To the extent that any Net Proceeds remain after the
consummation of a Net Proceeds Offer, the Company or any Restricted Subsidiary
of the Company, as the case may be, may use such Net Proceeds for any purposes
not prohibited by this Indenture. Notwithstanding the provisions of this Section
4.06(a), the Company shall not make a Net Proceeds Offer if the Company is
prohibited from doing so under the terms of the Credit Agreement, PROVIDED that
the Company's failure to comply with the covenant in this Section 4.06(a) shall
constitute an Event of Default described in clause (b) under Section 6.01.
(b) In the event of the transfer of substantially all (but not
all) of the property and assets of the Company and its Restricted Subsidiaries
as an entirety to a Person in a transaction permitted by Section 5.01, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed for purposes of this Section 4.06 to have sold the properties
and assets of the Company and its Restricted Subsidiaries not so transferred,
and shall comply with the provisions of this Section 4.06 with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market value of
such properties and assets of the Company or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
4.06.
(c) Notwithstanding the provisions of Section 4.06(a), the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraph to the extent that (i) at least 80%
of the consideration for such Asset Sale constitutes Productive Assets and (ii)
such Asset Sale is for fair market value; PROVIDED that any consideration
consisting of cash or Cash Equivalents received by the Company or any of its
Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds subject to
the provisions of Section 4.06(a).
(d) Each notice of a Net Proceeds Offer pursuant to this Section
4.06 shall be mailed or caused to be mailed, by first class mail, by the Company
not more than 25 days after the Net Proceeds Offer Trigger Date to all Holders
at their last registered addresses as of a date within 15 days of the mailing of
such notice, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Subordinated
Securities pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.06 and that all Senior Subordinated Securities tendered will
be accepted for payment; PROVIDED, HOWEVER, that if the aggregate
principal amount of Senior Subordinated Securities tendered in a Net
Proceeds Offer at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, the Company shall select the Senior
Subordinated Securities to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Senior Subordinated Securities in denominations of $1,000 or multiples
thereof shall be purchased);
(ii) the Net Proceeds Offer Amount, the purchase price (including
the amount of accrued interest) and the Net Proceeds Offer Payment Date;
PROVIDED that the Net Proceeds Offer Payment Date for the Senior
Subordinated Securities shall be a date subsequent to any payment dates
for the purchase or other repayment of Senior Debt having similar
provisions;
(iii) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(iv) that unless the Company defaults in making payment therefor,
any Senior Subordinated Securities accepted for payment pursuant to the
Net Proceeds Offer shall cease to accrue interest after the Net Proceeds
Offer Payment Date;
(v) that Holders electing to have Senior Subordinated Securities
purchased pursuant to a Net Proceeds Offer will be required to surrender
the Senior Subordinated Securities, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day prior to
the Net Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
fifth Business Day prior to the Net Proceeds Offer Payment Date, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Senior Subordinated Security purchased;
(vii) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior Subordinated Securities
in a principal amount equal to the unpurchased portion of the Senior
Subordinated Securities surrendered; PROVIDED that each Senior
Subordinated Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount of $1,000 or
integral multiples thereof;
(viii) the calculations used in determining the amount of the Net
Proceeds Offer Amount to be applied to the purchase of the Senior
Subordinated Securities;
(ix) any other procedures that a Holder must follow to accept the
Net Proceeds Offer; and
(x) the name and address of the Paying Agent.
On or before the Net Proceeds Offer Payment Date, the Company
shall (i) accept for payment Senior Subordinated Securities or portions thereof
tendered pursuant to the Net Proceeds Offer which are to be purchased in
accordance with item (d)(i) above, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of, plus accrued interest, if any,
on, all Senior Subordinated Securities to be purchased or portions thereof and
(iii) deliver to the Trustee Senior Subordinated Securities so accepted together
with an Officers' Certificate stating that the Senior Subordinated Securities or
portions thereof were accepted by the Company for payment in accordance with the
terms of this Section 4.06. The Paying Agent shall promptly (but in any case not
later than five Business Days after the Net Proceeds Offer Payment Date) mail or
deliver to each Holder of Senior Subordinated Securities so accepted payment in
an amount equal to the purchase price plus accrued interest, if any, and the
Company shall promptly execute and issue New Senior Subordinated Securities, and
the Trustee shall promptly authenticate and mail or deliver to each Holder such
new Senior Subordinated Securities equal in principal amount to any unpurchased
portion of the Senior Subordinated Securities surrendered. For purposes of this
Section 4.06, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Net Proceeds Offer shall be returned by the Paying
Agent to the Company.
(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 Senior Subordinated Securities pursuant to a Net Proceeds Offer.
To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 4.06, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.06 by virtue thereof
SECTION 4.07 Maximum Total Leverage Ratio. So long as any Senior
Subordinated Note is outstanding, the Company shall not suffer or permit the
Total Leverage Ratio at any time during each period set forth in the chart below
to exceed the applicable ratio set forth opposite such period.
Fiscal Quarter Ending During the Period: Total Leverage Ratio:
---------------------------------------- ---------------------
Issue Date through 6/30/00 4.75 to 1.00
7/1/00 through 6/30/01 4.25 to 1.00
7/1/01 through 6/30/02 4.0 to 1.00
7/1/02 and thereafter 3.5 to 1.00
SECTION 4.08 Transactions with Affiliates. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to occur any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
the guaranteeing of any Indebtedness or the rendering of any service) with, or
for the benefit of, any of their respective Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under Section
4.08(b) and (y) Affiliate Transactions on terms that are no less favorable to
the Company or such Restricted Subsidiary, as the case may be, than those that
could reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company or
such Restricted Subsidiary, as the case may be. All Affiliate Transactions (and
each series of related Affiliate Transactions which are similar or part of a
common plan) involving aggregate payments or other property with a fair market
value in excess of $1.0 million shall be approved by the Board of Directors of
the Company or such Restricted Subsidiary, as the case may be, such approval to
be evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary of the Company enters into an Affiliate
Transaction (or a series of related Affiliate Transactions which are similar or
part of a common plan) that involves aggregate payments or other property with a
fair market value in excess of $10.0 million, the Company or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Restricted Subsidiary, as the case
may be, from a financial point of view, from an Independent Financial Advisor
and file the same with the Trustee.
(b) The restrictions set forth in Section 4.08(a) shall not apply
to (i) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company as determined reasonably and in good faith
by the Board of Directors or senior management of the Company or such Restricted
Subsidiary, as the case may be; (ii) transactions exclusively between or among
the Company and any of its Wholly Owned Restricted Subsidiaries or exclusively
between or among such Wholly Owned Restricted Subsidiaries; PROVIDED that such
transactions are not otherwise prohibited by this Indenture; (iii) Restricted
Payments permitted by this Indenture; (iv) transactions effected as part of a
Qualified Securitization Transaction; and (v) any agreement as in effect as of
the Issue Date or any amendment thereto and any transaction contemplated thereby
(including pursuant to any amendment) or 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 4.09 Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder will have the right to require that the Company
purchase all or a portion of such Holder's Senior Subordinated Securities
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in
any event within 30 days following any Change of Control, the Company will (i)
repay in full and terminate all commitments under the Credit Agreement and all
other Senior Debt the terms of which require repayment upon a Change of Control
or offer to repay in full and terminate all commitments under the Credit
Agreement and all other such Senior Debt and to repay the Indebtedness owed to
each lender which has accepted such offer or (ii) obtain the requisite consents
under the Credit Agreement and all other Senior Debt to permit the repurchase of
the Senior Subordinated Securities as provided below. The Company must first
comply with the covenant described in the preceding sentence before it shall be
required to repurchase Senior Subordinated Securities in the event of a Change
of Control; provided that the Company's failure to comply with the covenant
described in the preceding sentence shall constitute an Event of Default
described in clause (c) and not in clause (b) under Section 6.01.
(c) Within 30 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company will send, by first
class mail, a notice to each Holder, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Senior Subordinated Securities pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.09 and that all Senior Subordinated
Securities tendered and not withdrawn will be accepted for
payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier
than 20 Business Days nor later than 30 Business Days from
the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
PROVIDED that the Change of Control Payment Date for the
Senior Subordinated Securities shall be a date subsequent
to any payment dates for the purchase or other repayment
of Senior Debt having similar provisions;
(3) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(4) that, unless the Company defaults in making payment
therefor, any Senior Subordinated Securities accepted for
payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have a Senior Subordinated
Security purchased pursuant to a Change of Control Offer
will be required to surrender the Senior Subordinated
Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control
Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of
business on the fifth Business Day prior to the Change of
Control Payment Date, a telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Senior Subordinated
Securities purchased;
(7) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior
Subordinated Securities in a principal amount equal to the
unpurchased portion of the Senior Subordinated Securities
surrendered; PROVIDED that each Senior Subordinated
Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof;
(8) the circumstances and relevant facts regarding such Change
of Control;
(9) any other procedures that a Holder must follow to accept
the Change of Control Offer; and
(10) the name and address of the Paying Agent.
On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Senior Subordinated Securities or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the purchase price of, plus accrued
and unpaid interest, if any, on, all Senior Subordinated Securities so tendered
and (iii) deliver to the Trustee Senior Subordinated Securities so accepted
together with an Officers' Certificate stating that the Senior Subordinated
Securities or portions thereof were accepted by the Company for payment in
accordance with the terms of this Section 4.09. The Paying Agent shall promptly
(but in any case not later than five Business Days after the Change of Control
Payment Date) mail or deliver to each Holder of Senior Subordinated Securities
so accepted payment in an amount equal to the purchase price plus accrued and
unpaid interest, if any, and the Company shall promptly execute and issue new
Senior Subordinated Securities, and the Trustee shall promptly authenticate and
mail or deliver to each Holder new Senior Subordinated Securities equal in
principal amount to any unpurchased portion of the Senior Subordinated
Securities surrendered. Any Senior Subordinated Securities not so accepted shall
be promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.09, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Change of Control Offer shall be returned by the Paying
Agent to the Company.
(d)(A) If the Company or any Restricted Subsidiary thereof has
issued any outstanding (i) Indebtedness that is subordinated in right of payment
to the Senior Subordinated Securities or (ii) Preferred Stock, and the Company
or such Restricted Subsidiary is required to make an offer to purchase or 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 purchase
price in full to the Holders of Senior Subordinated Securities that have
accepted the Company's Change of Control Offer and shall otherwise have
consummated the Change of Control Offer made to Holders of the Senior
Subordinated Securities and (B) the Company shall not issue Indebtedness that is
subordinated in right of payment to the Senior Subordinated Securities or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Senior Subordinated
Securities in the event of a Change in Control under this Indenture.
(e) Neither the Board of Directors of the Company nor the Trustee
may waive the provisions of this Section 4.09 relating to a Holder's right to
redemption upon a Change of Control. 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 Senior Subordinated Securities
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.09, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
provisions of this Section 4.09 by virtue thereof
SECTION 4.10 Compliance Certificate. The Company and each
Guarantor shall deliver to the Trustee within 90 days after the end of each
fiscal year of the Company an Officers' Certificate (one of the signers of which
shall be the principal executive officer, principal financial officer or
principal accounting officer of such Person) stating that a review of the
activities of the Company and its Subsidiaries has been made under the
supervision of the signing Officers with a view to determining whether the
Company and its Subsidiaries have kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each Officer
signing such certificate, that to the best of his or her knowledge the Company
and its Subsidiaries have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and are 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 such Default 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 Senior
Subordinated Securities are prohibited or if such event has occurred, a
description of the event and what action the Company and its Subsidiaries are
taking or propose to take with respect thereto.
SECTION 4.11 Maintenance of Properties and Insurance . (a)
Subject to Article V, the Company shall cause all material properties owned by
or leased to it or any of its Subsidiaries and used or useful in the conduct of
its 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 equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section 4.11 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 such Subsidiary
concerned, or of an Officer (or other agent employed by the Company or of any
such Subsidiary) of the Company or such Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any such Subsidiary of the Company, and if such discontinuance
or disposal is not adverse in any material respect to the Holders.
(b) The Company will maintain, and will cause each of its
Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary's own name), with responsible carriers, insurance 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 or
similar size, including property and casualty loss, workers' compensation, and
interruption of business insurance, and as otherwise may be necessary in the
judgment of the Company.
SECTION 4.12 Limitation on Liens. Other than Permitted Liens, the
Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, Incur, assume or permit or
suffer to exist any Liens of any kind against or upon any property or assets of
the Company or any of its Restricted Subsidiaries whether owned on the Issue
Date or acquired after the Issue Date, or any proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom unless (i) in
the case of Liens securing Indebtedness that is expressly subordinate or junior
in right of payment to the Senior Subordinated Securities, the Senior
Subordinated Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens at least to the same extent
that the Senior Subordinated Securities are senior in priority to such
Indebtedness and (ii) in all other cases, the Senior Subordinated Securities are
equally and ratably secured.
SECTION 4.13 Additional Subsidiary Guarantees. If the Company or
any of its Restricted Subsidiaries transfers or causes to be transferred, in one
transaction or a series of related transactions, any property to any Domestic
Restricted Subsidiary that is not a Guarantor, or if the Company or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in or hold
an Investment in a Domestic Restricted Subsidiary that is not a Guarantor having
total consolidated assets, with a book value in excess of $2.0 million, then
such transferee or acquired or other Domestic Restricted Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture
in form satisfactory to the Trustee pursuant to which such Domestic
Restricted Subsidiary shall unconditionally guarantee all of the
Company's Obligations under the Senior Subordinated Securities and this
Indenture on the terms set forth in this Indenture; and
(2) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered
by such Domestic Restricted Subsidiary and constitutes a legal, valid,
binding and enforceable obligation of such Domestic Restricted
Subsidiary;
PROVIDED, HOWEVER, that notwithstanding the foregoing, each transferee or
acquired Domestic Restricted Subsidiary or other Domestic Restricted Subsidiary
organized by the Company or any of its Restricted Subsidiaries or in which the
Company or any of its Restricted Subsidiaries shall invest or hold an Investment
shall comply with clauses (1) and (2) above if such Domestic Restricted
Subsidiary, together with the Company's other Restricted Subsidiaries that are
not Guarantors, after giving PRO FORMA effect to such transfer, organization,
acquisition or Investment, would constitute a Significant Subsidiary of the
Company (using 5.0%, rather than 10.0%, for purposes of such calculation).
Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for
all purposes of this Indenture.
SECTION 4.14 No Layering. The Company will not, and will not
permit any Guarantor to, Incur or suffer to exist Indebtedness that is senior in
right of payment to the Senior Subordinated Securities or such Guarantor's
Subsidiary Guarantee, as the case may be, and subordinated in right of payment
to any other Indebtedness of the Company or such Guarantor's Subsidiary
Guarantee, as the case may be.
SECTION 4.15 Capital Expenditures. So long as any Senior
Subordinated Note is outstanding, the aggregate amount of all Capital
Expenditures Incurred after the Issue Date will not exceed in the aggregate in
any fiscal year of the Company the sum of $30.0 million; PROVIDED that after
giving effect to the Incurrence of any Capital Expenditures permitted by this
Section 4.15, no Default or Event of Default shall have occurred and be
continuing.
SECTION 4.16 Conduct of Business. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, engage in any businesses
other than a Permitted Business.
SECTION 4.17 Environmental Matters. So long as any Senior
Subordinated Note is outstanding, the Company and its Subsidiaries will not, and
will not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for: (1)
Hazardous Materials such as inks, other chemicals used in printing operations,
cleaning solvents, pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed, managed
or otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements; and (2) the trichloroethylene that is
being remediated at the property commonly known as 3575 Hempland Road,
Lancaster, Pennsylvania.
SECTION 4.18 Environmental Release. So long as any Senior
Subordinated Note is outstanding, the Company agrees that upon the occurrence of
an Environmental Release at or on any of the Properties it will act immediately
to investigate the extent of, and to take appropriate remedial action to
eliminate, such Environmental Release, whether or not ordered or otherwise
directed to do so by any Environmental Authority.
SECTION 4.19 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 are
not in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
SECTION 4.20 Payment of Taxes and Other Claims. The Company
shall, and shall cause each of its Subsidiaries to, pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (1) all material
taxes, assessments and governmental charges levied or imposed upon the Company
or any such Subsidiary or upon the income, profits or property of the Company or
any such Subsidiary and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the property, of the Company or any such Subsidiary; PROVIDED,
HOWEVER, that neither the Company nor any of its Subsidiaries shall 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 and for which appropriate provision has
been made.
SECTION 4.21 Notice of Defaults. Upon becoming aware of any
Default or Event of Default, the Company shall promptly deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default, and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.22 Waiver of Stay, Extension or Usury Laws. Each of the
Company and the Guarantors covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company or such
Guarantor from paying all or any portion of the principal of, premium, if any,
and/or interest on the Senior Subordinated Securities 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 and each Guarantor hereby expressly waive all
benefit or advantage of any such law, and covenant that they shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries. The
Company will not cause or permit any of its Restricted Subsidiaries to issue to
any Person (other than to the Company or to a Wholly Owned Restricted Subsidiary
of the Company) any Preferred Stock or permit any Person (other than the Company
or a Wholly Owned Restricted Subsidiary of the Company) to own any Preferred
Stock of any Restricted Subsidiary of the Company.
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries. The Board of Directors of the Company may designate an
Unrestricted Subsidiary of the Company to be a Restricted Subsidiary of the
Company under this Indenture only if: (1) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation; (2) any such designation shall be deemed to be an Incurrence as of
the date of such designation by a Restricted Subsidiary of the Company of the
Indebtedness (if any) of such designated Subsidiary of the Company for purposes
of Section 4.03; and (3) immediately after giving effect to such designation and
the Incurrence of such additional Indebtedness, the Company is able to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.03.
The Board of Directors of the Company may designate any
Restricted Subsidiary of the Company (other than a Guarantor) to be an
Unrestricted Subsidiary of the Company under this Indenture only if: (1) no
Default or Event of Default shall have occurred and be continuing at the time of
or after giving effect to such designation; (2) such designation is at that time
permitted pursuant to Section 4.04 (other than pursuant to clause (viii) of the
definition of Permitted Investments); and (3) immediately after giving effect to
such designation, the Company is able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.03.
Any such designation by the Board of Directors of the Company of
an Unrestricted Subsidiary to be a Restricted Subsidiary or of a Restricted
Subsidiary to be an Unrestricted Subsidiary shall be evidenced to the Trustee by
the filing with the Trustee of a Board Resolution of the Company giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and setting forth in
reasonable detail the underlying calculations.
For purposes of Section 4.04: (1) an Investment shall be deemed
to have been made at the time any Restricted Subsidiary of the Company is
designated to be an Unrestricted Subsidiary of the Company in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to the
net worth of such Restricted Subsidiary at the time that such Restricted
Subsidiary is designated to be an Unrestricted Subsidiary; (2) at any date the
aggregate amount of all Restricted Payments made as Investments since the Issue
Date shall exclude and be reduced by an amount (proportionate to the Company's
equity interest in such Subsidiary) equal to the net worth of any Unrestricted
Subsidiary of the Company at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary of the Company, not to exceed, in the case of
any such designation of an Unrestricted Subsidiary of the Company as a
Restricted Subsidiary of the Company, the amount of Investments previously made
by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary
(in the case of each of clauses (1) and (2), "net worth" shall be calculated
based upon the fair market value of the assets of such Subsidiary as of any such
date of designation); and (3) any property transferred to or from an
Unrestricted Subsidiary of the Company shall be valued at its fair market value
at the time of such transfer.
Notwithstanding the foregoing, the Board of Directors of the
Company may not designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary of the Company if, after such designation: (1) the
Company or any of its Restricted Subsidiaries (x) provides credit support for,
or a guarantee of, any Indebtedness of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (y) is
directly or indirectly liable for any Indebtedness of such Restricted
Subsidiary; (2) a default with respect to any Indebtedness of such Subsidiary
(including any right which the holders thereof may have to take enforcement
action against such Restricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its final stated
maturity; or (3) such Subsidiary owns any Capital Stock of, or owns or holds any
Lien on any property of, any Restricted Subsidiary which is not a Subsidiary of
the Subsidiary to be so designated.
Subsidiaries of the Company that are not designated by the Board
of Directors of the Company as Restricted or Unrestricted Subsidiaries will be
deemed to be Restricted Subsidiaries.
SECTION 4.25 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where (a) Senior Subordinated Securities may be presented or surrendered for
registration of transfer or for exchange, (b) Senior Subordinated Securities may
be presented or surrendered for payment and (c) notices and demands in respect
of the Senior Subordinated Securities 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 to or served at the address of the Trustee, c/o
Wilmington Trust FSB, 520 Madison Avenue, 33rd Floor, New York, New York 10022.
The Company hereby initially designates the Trustee at its address c/o
Wilmington Trust FSB, 520 Madison Avenue, 33rd Floor, New York, New York 10022
as its office or agency in the Borough of Manhattan, The City of New York, for
such purposes.
SECTION 4.26 Corporate Existence. Except as otherwise permitted
by Article V, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Restricted Subsidiaries
in accordance with the respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and each of its Restricted Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right, licenses and
franchises or corporate existence 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 Restricted Subsidiaries, taken as a whole,
and that the loss thereof is not, and will not be, adverse in any material
respect to the Holders.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01 Merger, Consolidation or Sale of All or
Substantially All Assets of the Company. (a) The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or into
any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or
cause or permit any Restricted Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and the
Company's Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless: (i) either (1) the Company shall be the surviving
or continuing corporation or (2) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other disposition
the properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be
a corporation organized and validly existing under the laws of the United States
or any State thereof or the District of Columbia and (y) shall expressly assume,
by supplemental indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual payment of the
principal of and interest on all of the Senior Subordinated Securities and the
performance of every covenant of the Senior Subordinated Securities, this
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such transaction
and the assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to
be Incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be, (x) shall have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction and (y) shall be able to Incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with the provisions of Section 4.03 of this Indenture; (iii)
immediately before and immediately after giving effect to such transaction and
the assumption contemplated by clause (i)(2)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be
Incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; (iv) each Guarantor, unless it is the other party to the
transactions described above, shall have by supplemental indenture to this
Indenture confirmed that its Guarantee of the Senior Subordinated Securities
shall apply to such Person's obligations under this Indenture and the Senior
Subordinated Securities; and (v) the Company or the Surviving Entity, as the
case may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
For purposes of this Section 5.01(a), the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(b) Upon any consolidation, combination or merger or any transfer
of all or substantially all of the assets of the Company in accordance with the
provisions of Section 5.01(a), in which the Company is not the continuing
corporation, the Surviving Entity formed by such consolidation or into which the
Company is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture and the Senior Subordinated Securities with the
same effect as if such Surviving Entity had been named as such.
SECTION 5.02 Merger or Consolidation of a Guarantor. No Guarantor
(other than a Guarantor whose Subsidiary Guarantee is to be released in
accordance with Section 11.05 of this Indenture) may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
Person (other than the Company or another Guarantor) unless:
(i) the Person formed by or surviving such consolidation or merger
(if other than the Guarantor) shall be a corporation organized and
validly existing under the laws of the United States or any State
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of
such Guarantor under its Subsidiary Guarantee and this Indenture
pursuant to a supplemental indenture in form and substance satisfactory
to the Trustee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iv) the Guarantor or such Surviving Entity, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the
Guarantor's Consolidated Net Worth immediately prior to such
transaction;
(v) immediately after giving effect to such transaction, the
Company could satisfy the provisions of Section 5.01(a)(ii) of this
Indenture; and
(vi) the Person formed by or surviving such consolidation or merger
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation or merger and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the applicable
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.
Notwithstanding the foregoing clauses (iii), (iv), (v) and (vi)
above, any Guarantor may consolidate with or merge with or into the Company
(with the Company being the surviving entity) or any other Guarantor.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default and Remedies. The following events
are "Events of Default":
(a) the failure to pay interest on any Senior Subordinated
Securities when the same becomes due and payable and such default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the provisions of Article X or XII);
(b) the failure to pay the principal on any Senior Subordinated
Securities when such principal becomes due and payable, at maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Senior Subordinated Securities tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer) (whether or not such payment
shall be prohibited by the provisions of Article X or XII);
(c) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 30 days after the written notice specifying
the default (and demanding that such default be remedied) is furnished
to the Company by or to the Company and the Trustee by the Holders of
least 25% of the outstanding principal amount of the Senior Subordinated
Securities (except in the case of a default with respect to the
provisions of Article V, which will constitute an Event of Default with
such notice requirement but without such passage of time requirement);
(d) the failure to pay at final stated maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal
amount of any of the Junior Subordinated Notes or any other Indebtedness
of the Company or any Restricted Subsidiary of the Company (other than a
Securitization Entity), or the acceleration of the final stated maturity
of any of the Junior Subordinated Notes or any such other Indebtedness
(which acceleration is not rescinded, annulled or otherwise cured within
20 days after receipt by the Company or such Restricted Subsidiary of
notice of any such acceleration), if, in the case of any such other
Indebtedness, the aggregate principal amount of such Indebtedness,
together with the principal amount of any other Indebtedness in default
for failure to pay principal at final maturity or which has been
accelerated, aggregate $10.0 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of
$10.0 million (which are not covered by third party insurance as to
which the insurer has not disclaimed coverage) shall have been rendered
against the Company or any of its Restricted Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 60
days after such judgment or judgments become final and non-appealable;
or
(f) the Company or any Subsidiary of the Company that is a
Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law: (A) commences a voluntary case or proceeding; (B)
consents to the entry of an order for relief against it in an
involuntary case or proceeding; (C) consents to the appointment of a
custodian of it or for any substantial part of its property; (D) makes a
general assignment for the benefit of its creditors, takes any
comparable action under any foreign laws relating to insolvency or any
of them takes any 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 Subsidiary of the Company that is a Significant Subsidiary in an
involuntary case or proceeding; (B) appoints a custodian of the Company
or any Subsidiary of the Company that is a Significant Subsidiary or for
any substantial part of its property; (C) orders the winding up or
liquidation of the Company or any Subsidiary of the Company that is a
Significant Subsidiary; or (D) any similar relief is granted under any
foreign laws and, in each case, the order or decree relating thereto
remains unstayed and in effect for 60 days; and
(h) any Subsidiary Guarantee of a Subsidiary of the Company that
is a Significant Subsidiary ceases to be in full force and effect or any
Subsidiary Guarantee of a Subsidiary of the Company that is a
Significant Subsidiary is declared to be null and void and unenforceable
or any Subsidiary Guarantee of a Subsidiary of the Company that is a
Significant Subsidiary is found to be invalid or any Guarantor that is a
Significant Subsidiary of the Company denies its liability under its
Subsidiary Guarantee (other than by reason of release of a Guarantor in
accordance with Section 11.05 of this Indenture).
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar federal or state law for the relief of debtors. For purposes of this
Article VI only, the term "custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, or similar official under any Bankruptcy Law.
SECTION 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(f) or (g) with respect to the Company
or a Guarantor) shall occur and be continuing, the Trustee or the Holders of at
least 25% in principal amount of outstanding Senior Subordinated Securities may,
and the Trustee upon the request of the Holders of at least 25% in principal
amount of outstanding Senior Subordinated Securities shall, declare the
principal of, premium, if any, and accrued and unpaid interest on all the
outstanding Senior Subordinated Securities to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under the Credit Agreement or any "Revolving Credit
Commitment" or "Term Loan Commitment" (as each such term is defined in the
Credit Agreement) is in effect, shall become immediately due and payable upon
the first to occur of an acceleration under the Credit Agreement or five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such Acceleration Notice but only if such Event of Default
is then continuing. If an Event of Default specified in Section 6.01(f) or (g)
with respect to the Company or a Guarantor occurs and is continuing, then all
unpaid principal of, premium, if any, and accrued and unpaid interest on all of
the outstanding Senior Subordinated Securities shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration with respect to
the Senior Subordinated Securities as described in the preceding paragraph, the
Holders of a majority in principal amount of Senior Subordinated Securities may
rescind and cancel such declaration and its consequences (i) if the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and all
other amounts due pursuant to Section 7.07 and (v) in the event of the cure or
waiver of an Event of Default of the type described in Section 6.01(f) or (g)
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.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Senior Subordinated Securities or to enforce
the performance of any provision of the Senior Subordinated Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Subordinated Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of Senior
Subordinated Securities in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults. Subject to Section 6.02,
the Holders of a majority in aggregate principal amount of the Senior
Subordinated Securities then outstanding by written notice to the Trustee may on
behalf of the Holders of all of the Senior Subordinated Securities waive any
existing Default or Event of Default and its consequences except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the Senior Subordinated Securities. When a Default is waived, it is deemed cured
and ceases to exist and any Event of Default arising therefrom shall be deemed
to have been cured and waived for every purpose under this Indenture, but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any consequent right.
SECTION 6.05 Control by Majority. Subject to Section 13.06, the
Holders of a majority in aggregate principal amount of the outstanding Senior
Subordinated Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee by this Indenture. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders of Senior Subordinated Securities, it being
understood that subject to Section 7.01 the Trustee shall have no duty or
obligation to determine whether or not such actions or forbearances are unduly
prejudicial to such Holders, or would involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06 Limitation on Suits. Except to enforce the right to
receive payment of principal or interest when due, a Holder of Senior
Subordinated Securities may not pursue any remedy with respect to this Indenture
or the Senior Subordinated Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Senior Subordinated Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of
the Senior Subordinated Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
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, premium, if any, and interest on such
Holder's Senior Subordinated Securities, on or after the respective due dates
expressed in the Senior Subordinated Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Senior Subordinated Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest overdue on principal and to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
per annum borne by the Senior Subordinated Securities and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 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 and the Holders allowed in
any judicial proceedings relative to the Company or any other obligor upon the
Senior Subordinated Securities, their respective creditors or their property and
shall be entitled and empowered to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior Subordinated Securities or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent
required by Article X or XII;
THIRD: to Holders for amounts due and unpaid on the Senior
Subordinated Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Subordinated Securities for principal and
interest, respectively; and
FOURTH: to the Company or the Guarantors, as their
respective interests may appear.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Senior Subordinated
Securities.
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this Section 7.01(c) does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise Incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02 Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does
not constitute willful misconduct or negligence.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in principal
amount of the Senior Subordinated Securities at the time outstanding,
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.
(f) The Trustee shall not be required to give any note, bond or
surety in respect of the execution of the trusts and powers under this
Indenture.
(g) The permissive rights of the Trustee to take any action
enumerated in this Indenture shall not be construed as a duty to take
such action.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee may, in
the absence of bad faith on its part, rely upon an Officers'
Certificate.
(j) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Senior Subordinated
Securities unless either (1) a Trust Officer shall have actual knowledge
of such Default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by the
Company, the Guarantors or any Holder.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior
Subordinated Securities and may otherwise deal with the Company, the Guarantors
or their respective Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the
same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Subsidiary Guarantee or the Senior Subordinated Securities,
it shall not be accountable for the Company's use of the proceeds of the Senior
Subordinated Securities or any money paid to the Company or upon the Company's
direction under any provision of this Indenture and it shall not be responsible
for any statement of the Company or any Guarantors in this Indenture or in any
document issued in connection with the issuance of the Senior Subordinated
Securities or in the Senior Subordinated Securities other than the Trustee's
certificate of authentication.
SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is actually known to the Trustee, the Trustee shall mail to
each Holder of Senior Subordinated Securities at the expense of the Company
notice of the Default within the earlier of 90 days after it occurs or 30 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in payment of principal of or interest
on any Senior Subordinated Security, including an acceleration under Section
6.02, the Trustee may withhold the notice if and so long as a committee of its
trust officers in good faith determines that withholding the notice is in the
interests of the Holders of the Senior Subordinated Securities. Notwithstanding
anything to the contrary expressed in this Indenture, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default hereunder, except in
the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is
acting as the Paying Agent, unless and until a Trust Officer receives written
notice thereof at its Corporate Trust Office specified in Section 13.02, from
the Company, a Guarantor or a Holder that such Default or Event of Default has
occurred.
SECTION 7.06 Reports by Trustee to Holders. The Trustee shall
transmit to the Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times and in
the manner provided pursuant thereto. To the extent that any such report is
required by the TIA with respect to any 12-month period, such report shall cover
the 12-month period ending December 31 and shall be transmitted by the next
succeeding March 1.
A copy of each report at the time of its mailing to Holders of
Senior Subordinated Securities shall be filed with the Commission and each stock
exchange (if any) on which the Senior Subordinated Securities are listed. The
Company agrees to notify promptly the Trustee whenever the Senior Subordinated
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time such reasonable compensation as is agreed to in
writing by the Trustee and Company for the Trustee's services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket disbursements, advances and expenses
Incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company and each Guarantor, jointly and
severally, shall indemnify the Trustee and its officers, directors,
shareholders, agents and employees (each, an "Indemnified Party") for and hold
each Indemnified Party harmless against any and all loss, liability or expense
(including reasonable attorneys' fees) Incurred by them without negligence or
bad faith on their part arising out of or in connection with the acceptance or
administration of this Indenture or the Senior Subordinated Securities and the
performance of their duties hereunder, including the cost and expense of
enforcing this Indenture against the Company (including this Section 7.07), and
defending itself against any claim (whether asserted by a Holder or any other
Person). The Trustee and its officers, directors, shareholders, agents and
employees in its capacity as Paying Agent, Registrar, Custodian and agent for
service of notice and demands shall have the full benefit of the foregoing
indemnity as well as all other benefits, rights and privileges accorded to the
Trustee in this Indenture when acting in such other capacity. The Trustee shall
notify the Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof, PROVIDED that any failure so to notify the
Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder. The Company shall defend the claim and the Indemnified
Party shall provide reasonable cooperation at the Company's expense in the
defense. Such Indemnified Parties may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel; provided that the
Company shall not be required to pay such fees and expenses if it assumes such
Indemnified Parties' defense and in such Indemnified Parties' reasonable
judgment, there is no conflict of interest between the Company and such
Indemnified Parties in connection with such defense. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss,
liability or expense Incurred by an Indemnified Party through such party's own
willful misconduct, negligence or bad faith. The Company and the Guarantors need
not pay any settlement made without the Company's consent (which consent shall
not be unreasonably withheld).
To secure the Company's and the Guarantors' payment obligations
in this Section 7.07, the Trustee shall have a lien on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Senior Subordinated Securities. Such
lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee. The Trustee's right to receive payment of
any amounts due under this Indenture shall not be subordinated to any other
indebtedness of the Company or the Guarantors and the Senior Subordinated
Securities shall be subordinate to the Trustee's rights to receive such payment.
The Company's and the Guarantors' payment obligations pursuant to
this Section 7.07 shall survive the satisfaction or discharge of this Indenture,
any rejection or termination of this Indenture under any Bankruptcy Law or the
resignation or removal of the Trustee. When the Trustee Incurs expenses after
the occurrence of a Default specified in Section 6.01(f) or (g) with respect to
the Company or any Guarantor, the expenses are intended to constitute expenses
of administration under the Bankruptcy Law.
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 Senior Subordinated Securities may remove the Trustee by
so notifying the Trustee and the Company in writing and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Senior Subordinated Securities
and such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of at least 10% in aggregate principal amount of the Senior Subordinated
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's and the Guarantors' obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, PROVIDED that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Senior Subordinated Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Senior Subordinated Securities so authenticated; and in case at that time any of
the Senior Subordinated Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Senior Subordinated Securities
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Senior Subordinated Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Legal Defeasance and Covenant Defeasance. (a) The
Company may, at the option of its Board of Directors evidenced by a Board
Resolution, at any time, elect to have either Section 8.01(b) or 8.01(c) be
applied to all outstanding Senior Subordinated Securities upon compliance with
the conditions set forth below in this Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
deemed to have been discharged from their obligations with respect to all
outstanding Senior Subordinated Securities and any Subsidiary Guarantee on the
date the conditions set forth below are satisfied ("Legal Defeasance"). For this
purpose, Legal Defeasance means that the Company and each Guarantor shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Subordinated Securities and any Subsidiary Guarantee, which
Senior Subordinated Securities and Subsidiary Guarantees shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.03 and the other
Sections of this Indenture referred to in clauses (i) and (ii) below, and to
have satisfied all their other obligations under such Senior Subordinated
Securities, the Subsidiary Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Senior Subordinated Securities to receive payments in respect of the
principal of and interest on such Senior Subordinated Securities, solely from
the trust fund described in Section 8.03, when such payments are due, (ii) the
Company's obligations with respect to the Senior Subordinated Securities under
Sections 2.01(a) and (b) and 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.14, and 2.15
and 4.25 which shall survive until the Senior Subordinated Securities have been
paid in full, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder (including claims of, or payments to, the Trustee under or
pursuant to Section 7.07) and (iv) this Article VIII. Subject to compliance with
this Article VIII, the Company may exercise its option under this Section
8.01(b) notwithstanding the prior exercise of its option under Section 8.01(c).
(c) Upon the Company's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19,
4.20, 4.21, 4.23, 4.24, 4.25, 4.26 , 5.01(a)(ii), (iv) and (v) and 5.02 with
respect to the outstanding Senior Subordinated Securities on and after the date
the conditions set forth below are satisfied ("Covenant Defeasance"), and the
Senior Subordinated Securities shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration of act of Holders
(and the consequences of any thereof) in connection with such Sections, but
shall continue to be deemed "outstanding" for all the other purposes hereunder.
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior Subordinated Securities, the Company and its Subsidiaries may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(c), but, except as specified above,
the remainder of this Indenture and such Senior Subordinated Securities shall be
unaffected thereby. In addition, upon the Company's exercise under Section
8.01(a) of the option applicable to this Section 8.01(c), subject to the
satisfaction of the conditions set forth in Section 8.03, Sections 6.01(d), (e)
and (h) shall not constitute Events of Default.
SECTION 8.02 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.01(b)
or 8.01(c) to the outstanding Senior Subordinated Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender, non-callable 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 and interest on the Senior Subordinated Securities on
the stated date for payment thereof or on the applicable redemption date, as the
case may be; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
Events of Default under Section 6.01(f) or (g) are concerned, at any time in the
period ending on the 91st day after the date of deposit; (v) 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; (vi) 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; (vii) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with; and (viii) the Company shall have delivered to the Trustee an Opinion of
Counsel to that effect that (a) the trust funds will not be subject to any
rights of holders of Senior Debt, including, without limitation, those arising
under this Indenture and (b) assuming no intervening bankruptcy of the Company
between the date of deposit and the 91st day following deposit and that no
Holder is an insider of the Company, after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) in the immediately preceding paragraph with respect to a Legal
Defeasance need not be delivered if all Senior Subordinated Securities not
theretofore delivered to the Trustee for cancellation (1) have become due and
payable; or (2) will become due and payable on the maturity date within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
SECTION 8.03 Deposited Money and Government Senior Subordinated
Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to
Section 8.04, U.S. Legal Tender and U.S. government obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 8.02 or Section
8.06 in respect of the outstanding Senior Subordinated Securities shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Subordinated Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of all sums due and to
become due thereon in respect of principal and interest, but such money need not
be segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. government obligations
(including the proceeds thereof) held by it as provided in Section 8.02 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.02(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.04 Repayment to Company. Any U.S. Legal Tender
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or interest on any Senior Subordinated
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Senior Subordinated Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company, cause to be published once, in The
New York Times (national edition) and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.05 Reinstatement. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. government obligations in
accordance with this Article VIII by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and the Guarantors' obligations under this
Indenture and the Senior Subordinated Securities and the Guarantors' obligations
under the Subsidiary Guarantees shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
this Article VIII; PROVIDED, HOWEVER, that, if the Company or any Guarantor
makes any payment of principal of or interest on any Senior Subordinated
Security following the reinstatement of its obligations, the Company or any
Guarantor, as the case may be, shall be subrogated to the rights of the Holders
of such Senior Subordinated Securities to receive such payment from the money
held by the Trustee or Paying Agent.
SECTION 8.06 Satisfaction and Discharge of Indenture. Upon the
request of the Company, this Indenture will be discharged and will cease to be
of further effect (except as to surviving rights of registration of transfer or
exchange of the Senior Subordinated Securities, as expressly provided for herein
or pursuant hereto), the Company and the Guarantors will be discharged from
their obligations under the Senior Subordinated Securities and the Subsidiary
Guarantees, respectively, and the Trustee, at the expense of the Company, will
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when:
(a) either (i) all the Senior Subordinated Securities theretofore
authenticated and delivered (other than mutilated, destroyed, lost or
stolen Senior Subordinated Securities that have been replaced or paid
and Senior Subordinated Securities that have been subject to defeasance
under this Article VIII) have been delivered to the Trustee for
cancellation or (ii) all Senior Subordinated Securities not theretofore
delivered to the Trustee for cancellation (A) have become due and
payable, (B) will become due and payable at maturity within one year or
(C) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company, and the
Company, in the case of (A), (B) or (C) above, has irrevocably deposited
or caused to be deposited with the Trustee funds in trust for such
purpose in an amount sufficient to pay and discharge, without the need
to reinvest any proceeds thereof, the entire Indebtedness on such Senior
Subordinated Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest on the Senior Subordinated
Securities to the date of such deposit (in the case of Senior
Subordinated Securities that have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable
under this Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company and the Guarantors to the Trustee under Section
7.07 and, if money shall have been deposited with the Trustee pursuant to clause
(a)(ii) of this Section 8.06, the obligations of the Trustee under Section 8.06
and Section 2.04 shall survive.
ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Holders. From time to time, the
Company and each Guarantor when authorized by a Board Resolution of their
respective Boards of Directors, and the Trustee, without the consent of the
Holders, may amend this Indenture or the Senior Subordinated Securities or the
Subsidiary Guarantees for the following purposes:
(1) to cure any ambiguity, defect or inconsistency, PROVIDED that
any such amendment does not, in the opinion of the Trustee, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect the
rights of any Holder or any holder of the Series B Securities or the
Series C Securities;
(2) to provide for uncertificated Senior Subordinated Securities
in addition to or in place of certificated Senior Subordinated
Securities (PROVIDED that the uncertificated Senior Subordinated
Securities are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Senior
Subordinated Securities are described in Section 163(f)(2)(B) of the
Code);
(3) to comply with Article V;
(4) to release any Guarantor from its Subsidiary Guarantee in
accordance with the provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights
or benefits to each of the Holders of Senior Subordinated Securities and
the holders of the Series B Securities and the Series C Securities,
treating, for such purpose, the Senior Subordinated Securities, the
Series B Securities and the Series C Securities as one class, or that
does not adversely affect the legal rights under this Indenture of any
such Holder of Senior Subordinated Securities or any holder of Series B
Securities or Series C Securities, or
(7) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article VII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
SECTION 9.02 With Consent of Holders. The Company, the Guarantors
and the Trustee may amend this Indenture, the Subsidiary Guarantees or the
Senior Subordinated Securities with the written consent of (i) the Holders of at
least 66 2/3% in principal amount of the outstanding Senior Subordinated
Securities, (ii) the holders of at least 66 2/3% in principal amount of the
Series B Securities and (iii) the holders of at least 66 2/3% in principal
amount of the Series C Securities. However, without the consent of (i) each
Holder of a Senior Subordinated Security, (ii) each holder of the Series B
Securities and (iii) each holder of the Series C Securities, an amendment may
not:
(i) reduce the principal amount of Senior Subordinated Securities
whose Holders must consent to an amendment;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Senior Subordinated Securities;
(iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Senior Subordinated Securities, or
change the date on which any Senior Subordinated Securities may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(iv) make any Senior Subordinated Securities payable in money other
than that stated in the Senior Subordinated Securities;
(v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Senior Subordinated Securities on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders
of a majority in principal amount of Senior Subordinated Securities to
waive Defaults or Events of Default;
(vi) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Senior
Subordinated Securities in a manner which adversely affects the Holders;
PROVIDED, HOWEVER, that it is understood that any amendment, the purpose
of which is to permit the Incurrence of additional Indebtedness under
this Indenture shall not be construed as adversely affecting the ranking
of the Senior Subordinated Securities; or
(vii) make any change to the Subsidiary Guarantees in any manner
that adversely affects the rights of the Holders.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof
No amendment under this Section 9.02 may make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article XII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Senior Subordinated Securities shall comply with the
TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Senior Subordinated
Security shall bind the Holder and every subsequent Holder of that Senior
Subordinated Security or portion of the Senior Subordinated Security that
evidences the same debt as the consenting Holder's Senior Subordinated Security,
even if notation of the consent or waiver is not made on the Senior Subordinated
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Senior Subordinated Security or portion of the
Senior Subordinated Security if the Trustee receives written notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Senior Subordinated
Securityholder. Except if otherwise specified in such amendment or waiver, an
amendment or waiver becomes effective once the requisite number of consents are
received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Senior Subordinated Securities
entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date
is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities. If an amendment changes the terms of a Senior Subordinated Security,
the Trustee may require the Holder of the Senior Subordinated Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Senior Subordinated Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Senior Subordinated Security shall issue and the Trustee
shall authenticate a new Senior Subordinated Security that reflects the changed
terms. Failure to make the appropriate notation or to issue a new Senior
Subordinated Security shall not affect the validity of such amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel, each stating that such amendment is authorized or permitted by this
Indenture and that such amendment is the legal, valid and binding obligation of
the Company and the Guarantors enforceable against them in accordance with its
terms, subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
SECTION 9.07 Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture, any Subsidiary Guarantee or the Senior
Subordinated Securities unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
SUBORDINATION OF SENIOR SUBORDINATED SECURITIES
SECTION 10.01 Senior Subordinated Securities Subordinated to
Senior Debt. The Company covenants and agrees, and the Trustee and each Holder
of the Senior Subordinated Securities by their acceptance thereof likewise
covenant and agree, (i) that all Senior Subordinated Securities shall be issued
subject to the provisions of this Article X; and each Person holding any Senior
Subordinated Security, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture by the Company shall, to the extent
and in the manner set forth in this Article X, be subordinated and junior in
right of payment to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Debt of the Company, whether outstanding on the Issue Date
or thereafter Incurred, including, without limitation, the Company's Obligations
under the Credit Agreement, and (ii) that the subordination is for the benefit
of, and shall be enforceable directly by, the holders of Senior Debt, and that
each holder of Senior Debt whether now outstanding or hereafter created,
Incurred, assumed or guaranteed shall be deemed to have acquired Senior Debt in
reliance upon the covenants and provisions contained in this Indenture and the
Senior Subordinated Securities.
SECTION 10.02 No Payment on Securities in Certain Circumstances.
Unless Section 10.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Senior Debt, no payment of any kind or character shall be
made by or on behalf of the Company or any other Person on its behalf with
respect to any Obligations on the Senior Subordinated Securities or to acquire
any of the Senior Subordinated Securities for cash or property or otherwise
(except that holders of the Senior Subordinated Securities may receive payments
from a trust described under Article VIII so long as, on the date or dates the
respective amounts were paid into the trust, such payments were made with
respect to the Senior Subordinated Securities in accordance with the provisions
of Article VIII and without violating the provisions of Article X or Article XII
of this Indenture (a "Defeasance Trust Payment")).
In addition, unless Section 10.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Senior Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
written notice of the event of default to the Trustee (a "Payment Blockage
Notice"), then, unless and until all events of default have been cured or waived
or have ceased to exist or the Trustee receives notice from the Representative
for the respective issue of Designated Senior Debt terminating the Payment
Blockage Period, during the 180 days after the receipt by the Trustee of such
Payment Blockage Notice (the "Payment Blockage Period"), neither the Company nor
any other Person on its behalf shall (x) make any payment of any kind or
character with respect to any Obligations on the Senior Subordinated Securities
or (y) acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that Holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Payment Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Payment Blockage Notice and only one such Payment Blockage Period
may be commenced within any 360 consecutive days. No event of default which
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be made,
the basis for commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 10.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Senior Subordinated
Securities at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 10.02 and before all Obligations in respect
of Designated Senior Debt of the Company are paid in full in cash or Cash
Equivalents, such payment or distribution shall be received and held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Debt of the Company (PRO RATA to such holders on the basis of
the respective amounts of Designated Senior Debt held by such holders) or their
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Designated Senior Debt remaining unpaid until all such Designated Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Designated Senior Debt.
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of the Company or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to the Company or its property, whether voluntary or involuntary, all
Obligations due or to become due upon all Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the applicable
Senior Debt whether or not such interest is an allowed claim in such proceeding)
shall first be paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, before any
payment or distribution of any kind or character is made on account of any
Obligations on the Senior Subordinated Securities, or for the acquisition of any
of the Senior Subordinated Securities for cash or property or otherwise (except
that Holders of the Senior Subordinated Securities may receive Defeasance Trust
Payments). Before any payment may be made by, or on behalf of, the Company of
any Obligations on the Senior Subordinated Securities upon any such dissolution
or winding-up or total liquidation or reorganization, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), to which the Holders of the Senior Subordinated Securities or the
Trustee on their behalf would be entitled, but for the subordination provisions
of this Indenture, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Debt of the Company (PRO
RATA to such holders on the basis of the respective amounts of Senior Debt held
by such holders) or their Representatives, or to the trustee or trustees or
agent or agents under any agreement or indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Senior Debt in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Senior Subordinated Securities at a time when such
payment or distribution is prohibited by Section 10.03(a) and before all
Obligations in respect of Senior Debt of the Company are paid in full in cash or
Cash Equivalents, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt of the Company (PRO RATA to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their
Representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of such
Senior Debt remaining unpaid until all such Senior Debt has been paid in full in
cash or Cash Equivalents after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(c) To the extent any payment of Senior Debt (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
has not occurred.
(d) 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 or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 10.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V.
SECTION 10.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Senior Debt of the Company, the Holders of the Senior
Subordinated Securities shall be subrogated to the rights of the holders of such
Senior Debt to receive payments or distributions of cash, property or securities
of the Company made on such Senior Debt until the principal of and interest on
the Senior Subordinated Securities shall be paid in full in cash or Cash
Equivalents; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of the Company of any cash,
property or securities to which the Holders of the Senior Subordinated
Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article X, and no payment over pursuant to the provisions of
this Article X to the holders of Senior Debt of the Company by Holders of the
Senior Subordinated Securities or the Trustee on their behalf shall, as between
the Company, its creditors other than holders of Senior Debt of the Company, and
the Holders of the Senior Subordinated Securities, be deemed to be a payment by
the Company to or on account of the Senior Debt of the Company. It is understood
that the provisions of this Article X are and are intended solely for the
purpose of defining the relative rights of the Holders of the Senior
Subordinated Securities, on the one hand, and the holders of the Senior Debt of
the Company, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article X shall have been applied, pursuant to the provisions
of this Article X, to the payment of all amounts payable under Senior Debt, then
and in such case, the Holders of the Senior Subordinated Securities shall be
entitled to receive from the holders of such Senior Debt any payments or
distributions received by such holders of Senior Debt in excess of the amount
required to make payment in full in cash of such Senior Debt.
SECTION 10.05 Obligations of the Company Unconditional. Nothing
contained in this Article X or elsewhere in this Indenture or in the Senior
Subordinated Securities is intended to or shall impair, as among the Company and
the Holders of the Senior Subordinated Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Senior Subordinated Securities the principal of and interest on the Senior
Subordinated Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Senior Subordinated Securities and creditors of the
Company other than the holders of the Senior Debt of the Company, nor shall
anything herein or therein prevent the Holder of any Senior Subordinated
Security or the Trustee on their behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article X of the holders of the Senior Debt of the
Company in respect of cash, property or securities of the Company received upon
the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article X shall restrict the right of the Trustee or the
Holders of Senior Subordinated Securities to take any action to declare the
Senior Subordinated Securities to be due and payable prior to their stated
maturity pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
PROVIDED, HOWEVER, that all Senior Debt of the Company then due and payable
shall first be paid in full in cash or Cash Equivalents before the Holders of
the Senior Subordinated Securities or the Trustee are entitled to receive any
direct or indirect payment from, or on behalf of, the Company on account of any
Obligations on the Senior Subordinated Securities.
SECTION 10.06 Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the Senior
Subordinated Securities pursuant to the provisions of this Article X (although
the failure to give any such notice shall not affect the subordination
provisions set forth in this Article X). The Trustee shall not be charged with
knowledge of the existence of any event of default with respect to any Senior
Debt of the Company or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
Officer of the Company, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article VII, be entitled to assume that no such facts exist;
PROVIDED, HOWEVER, that if the Trustee shall not have received the notice
provided for in this Section 10.06 at least two Business Days prior to the date
upon which by the terms of this Indenture any moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of or
interest on any Senior Subordinated Security), then, regardless of anything
herein to the contrary, the Trustee shall have full power and authority to
receive any moneys from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date (although the
receipt of such moneys by any Holder of Senior Subordinated Securities shall
otherwise be subject to the provisions of this Article X). Nothing contained in
this Section 10.06 shall limit the right of the holders of Senior Debt of the
Company to recover payments from Holders as contemplated by Section 10.02 or
10.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Debt of the Company (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or distribution
pursuant to this Article X, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt of the Company 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 X, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 10.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article X, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt of the Company 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 X.
SECTION 10.08 Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article X
with respect to any Senior Debt of the Company which may at any time be held by
it in its individual or any other capacity to the same extent as any other
holder of Senior Debt of the Company, and nothing in this Indenture shall
deprive the Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article X, and no implied
covenants or obligations with respect to the holders of Senior Debt of the
Company shall be read into this Indenture against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt of the
Company (except as provided in Section 10.02 and Section 10.03(b), subject to
Section 10.06). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Senior Subordinated Securities or to the Company or to any other Person cash,
property or securities to which any holders of Senior Debt of the Company shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt. No right of any present or
future holders of any Senior Debt of the Company to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article X are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt of the Company.
SECTION 10.10. Holders Authorize Trustee To Effectuate
Subordination of Senior Subordinated Securities. Each Holder of Senior
Subordinated Securities by its acceptance of such Senior Subordinated Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article X, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his
Senior Subordinated Securities in the form required in those proceedings. If the
Trustee does not file a proper claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Debt or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Senior Subordinated
Securities. Nothing herein contained shall be deemed to authorize the Trustee or
the holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Securities or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article X shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 10.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article X shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 10.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 10.09, the holders of Senior Debt of
the Company may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Senior Subordinated Securities,
without incurring responsibility to the Holders of the Senior Subordinated
Securities and without impairing or releasing the subordination provided in this
Article X or the obligations hereunder of the Holders of the Senior Subordinated
Securities to the holders of Senior Debt of the Company, do any one or more of
the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Debt or any instrument
evidencing the same or any agreement under which such Senior Debt is outstanding
or secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (c) release any
Person liable in any manner for the collection of such Senior Debt; and (d)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
X.
SECTION 10.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article X (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XI
SUBSIDIARY GUARANTEES
SECTION 11.01 Subsidiary Guarantees. Each Guarantor hereby
jointly and severally unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest (including interest on overdue principal and interest on overdue
interest, to the extent lawful) on the Senior Subordinated Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture (including obligations
to the Trustee) and the Senior Subordinated Securities and (b) the full and
punctual performance of all other obligations of the Company whether for
expenses, indemnification or otherwise under this Indenture and the Senior
Subordinated Securities (all of the foregoing being collectively called the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article XI notwithstanding any extension or renewal of
any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Senior Subordinated Securities or the Guaranteed Obligations. The
obligations of each Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Senior Subordinated Securities or any other agreement or otherwise; (b) any
extension or renewal of any Guaranteed Obligations; (c) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Indenture,
the Senior Subordinated Securities or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Guaranteed Obligations or
any of them; (e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; (f) any change
in the ownership of such Guarantor; (g) the validity, regularity or
enforceability of the Senior Subordinated Securities or this Indenture.
The Subsidiary Guarantee of each Guarantor is, to the extent and
in the manner set forth in Article XII, subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Debt and is made
subject to such provisions of this Indenture.
Each Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Senior Subordinated Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Guaranteed Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in U.S. Legal Tender, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid principal amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest, premium and liquidated damages,
if any, on such Guaranteed Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Guaranteed Obligations of the Company to the
Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations and all Guarantor Senior Debt as provided in Article XII. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Subsidiary Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
Each Guarantor 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 Section.
SECTION 11.02 Execution and Delivery of Subsidiary Guarantee. (a)
To evidence each Guarantor's Subsidiary Guarantee set forth in this Article XI,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee shall
be placed on each Senior Subordinated Security authenticated and delivered by
the Trustee.
(b) This Indenture shall be executed on behalf of each Guarantor,
and an Officer of each Guarantor shall sign the notation of the Subsidiary
Guarantee on each Senior Subordinated Security, by manual or facsimile
signature. If an Officer whose signature is on this Indenture or the notation of
Subsidiary Guarantee on any Senior Subordinated Security no longer holds that
office at the time the Trustee authenticates such Senior Subordinated Security
on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be
valid nevertheless. Each Guarantor hereby agrees that the Subsidiary Guarantee
set forth in Section 11.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Subordinated Security a
notation of the Subsidiary Guarantee.
(c) The delivery of any Senior Subordinated Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of
each Guarantor.
SECTION 11.03 Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be guaranteed (after giving effect to all its guarantees
of Indebtedness under the Credit Agreement) without rendering this Indenture, as
it relates to any Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
SECTION 11.04 Successors and Assigns. This Article XI shall be
binding upon each Guarantor and its successors and assigns and shall inure 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
Senior Subordinated Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.05 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 XI 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 XI
at law, in equity, by statute or otherwise.
SECTION 11.06 Release of Guarantors. The Subsidiary Guarantee
furnished by a Guarantor shall be automatically and unconditionally released and
discharged (at which time such Person shall cease to be a Guarantor), without
any further action required on the part of the Trustee or any Holder, upon the
occurrence of (i) the release and discharge of the guarantee which resulted in
the creation of such Subsidiary Guarantee (as well as the release or discharge
of any subsequently created guarantees which would have resulted in the creation
of such Subsidiary Guarantee if same did not already exist), in each case except
a discharge or release by or as a result of payment under such Subsidiary
Guarantee and (ii) any sale or other disposition (by merger, stock purchase,
asset sale or otherwise) to any Person which is not a Restricted Subsidiary of
the Company of all of the Company's and its other Restricted Subsidiaries'
Capital Stock in such Guarantor ((or all or substantially all of its assets);
PROVIDED that such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of this Indenture.
SECTION 11.07 Modification. No modification, amendment or waiver
of any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt. Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Senior Subordinated Securities by their acceptance thereof
likewise covenant and agree, (i) that all Subsidiary Guarantees shall be issued
subject to the provisions of this Article XII; and each Person holding any
Subsidiary Guarantee, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture pursuant to the Subsidiary Guarantee
made by or on behalf of such Guarantor shall, to the extent and in the manner
set forth in this Article XII, be subordinated and junior in right of payment to
the prior payment in full in cash or Cash Equivalents of all Obligations on
Guarantor Senior Debt of such Guarantor, whether outstanding on the Issue Date
or thereafter Incurred, including, without limitation, such Guarantor's
Obligations under the Credit Agreement, and (ii) that the subordination is for
the benefit of, and shall be enforceable directly by, the holders of Guarantor
Senior Debt, and that each holder of Guarantor Senior Debt whether now
outstanding or hereafter created, Incurred, assumed or guaranteed shall be
deemed to have acquired Guarantor Senior Debt in reliance upon the covenants and
provisions contained in this Indenture, the Senior Subordinated Securities, and
the Subsidiary Guarantees.
SECTION 12.02 No Payment on Securities in Certain Circumstances.
Unless Section 12.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Guarantor Senior Debt, no payment of any kind or character
shall be made by or on behalf of any Guarantor or any other Person on its behalf
with respect to any Obligations on the Subsidiary Guarantees of any Guarantor or
to acquire any of the Subsidiary Guarantees of any Guarantor for cash or
property or otherwise (except that holders of the Subsidiary Guarantees may
receive Defeasance Trust Payments from a trust described under Article VIII so
long as, on the date or dates the respective amounts were paid into the trust,
such payments were made with respect to the Subsidiary Guarantees in accordance
with the provisions of Article VIII and without violating the provisions of
Article X or Article XII of this Indenture).
In addition, unless Section 12.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Guarantor Senior Debt, as such event of default is defined in the instrument
creating or evidencing such Designated Guarantor Senior Debt, permitting the
holders of such Designated Guarantor Senior Debt then outstanding to accelerate
the maturity thereof and if the Representative for the respective issue of
Designated Guarantor Senior Debt gives written notice of the event of default to
the Trustee (a "Guarantor Default Notice"), then, unless and until all events of
default have been cured or waived or have ceased to exist or the Trustee
receives notice from the Representative for the respective issue of Designated
Guarantor Senior Debt terminating the Guarantor Blockage Period, during the 180
days after the receipt by the Trustee of such Guarantor Default Notice (the
"Guarantor Blockage Period"), neither any Guarantor nor any other Person on
either of its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on the Subsidiary Guarantees of such Guarantor or (y)
acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Guarantor Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Guarantor Default Notice and only one such Guarantor Blockage
Period may be commenced within any 360 consecutive days. No event of default
which existed or was continuing on the date of the commencement of any Guarantor
Blockage Period with respect to the Designated Guarantor Senior Debt shall be,
or be made, the basis for commencement of a second Guarantor Blockage Period by
the Representative of such Designated Guarantor Senior Debt whether or not
within a period of 360 consecutive days, unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Guarantor Blockage Period that, in either case, would give rise to an event of
default pursuant to any provisions under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 12.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of any Guarantor of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Subsidiary
Guarantees at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 12.02 and before all Obligations in respect
of Designated Guarantor Senior Debt of such Guarantor are paid in full in cash
or Cash Equivalents, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Designated Guarantor Senior Debt (PRO RATA to such holders on the basis of the
respective amounts of Designated Guarantor Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Designated Guarantor Senior Debt may
have been issued, as their respective interests may appear, for application to
the payment of such Designated Guarantor Senior Debt remaining unpaid until all
such Designated Guarantor Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Designated Guarantor Senior
Debt.
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of any Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of any Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to such Guarantor or its property, whether voluntary or involuntary,
all Obligations due or to become due upon all Guarantor Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Guarantor Senior Debt whether or not such interest is an allowed
claim in such proceeding) shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt, before any payment or distribution of any kind
or character is made on account of any Obligations on the Subsidiary Guarantees,
or for the acquisition of any of the Senior Subordinated Securities for cash or
property or otherwise (except that Holders of the Senior Subordinated Securities
may receive Defeasance Trust Payments). Before any payment may be made by, or on
behalf of, any Guarantor of any Obligations on the Subsidiary Guarantees upon
any such dissolution or winding-up or total liquidation or reorganization, any
payment or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities (excluding any Defeasance
Trust Payment), to which the Holders of the Subsidiary Guarantees or the Trustee
on their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (PRO RATA to such holders on the basis of the respective amounts of
Guarantor Senior Debt held by such holders) or their Representatives or to the
trustee or trustees or agent or agents under any agreement or indenture pursuant
to which any of such Guarantor Senior Debt may have been issued, as their
respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Debt in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any Defeasance Trust Payment), shall be
received by the Trustee or any Holder of Subsidiary Guarantees at a time when
such payment or distribution is prohibited by Section 12.03(a) and before all
Obligations in respect of Guarantor Senior Debt of such Guarantor are paid in
full in cash or Cash Equivalents, such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Guarantor Senior Debt of such Guarantor (PRO RATA to such holders
on the basis of the respective amounts of Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Guarantor Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Guarantor Senior Debt remaining unpaid until all such Guarantor Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(c) To the extent any payment of Guarantor Senior Debt (whether
by or on behalf of any Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Guarantor Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(d) The consolidation of any Guarantor with, or the merger of
such Guarantor with or into, another Person or the liquidation or dissolution of
such Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another Person upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V.
SECTION 12.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Guarantor Senior Debt of any Guarantor, the Holders of
the Subsidiary Guarantees of such Guarantor shall be subrogated to the rights of
the holders of such Guarantor Senior Debt to receive payments or distributions
of cash, property or securities of such Guarantor made on such Guarantor Senior
Debt until the principal of and interest on the Senior Subordinated Securities
shall be paid in full in cash or Cash Equivalents; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Guarantor Senior
Debt of such Guarantor of any cash, property or securities to which the Holders
of the Senior Subordinated Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article XII, and no payment over
pursuant to the provisions of this Article XII to the holders of Guarantor
Senior Debt of such Guarantor by Holders of the Senior Subordinated Securities
or the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of Guarantor Senior Debt of such Guarantor, and the Holders
of the Senior Subordinated Securities, be deemed to be a payment by such
Guarantor to or on account of the Guarantor Senior Debt of such Guarantor. It is
understood that the provisions of this Article XII are and are intended solely
for the purpose of defining the relative rights of the Holders of the Senior
Subordinated Securities, on the one hand, and the holders of the Guarantor
Senior Debt of such Guarantor, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article XII shall have been applied, pursuant to the
provisions of this Article XII, to the payment of all amounts payable under
Guarantor Senior Debt, then and in such case, the Holders of the Senior
Subordinated Securities shall be entitled to receive from the holders of such
Guarantor Senior Debt any payments or distributions received by such holders of
Guarantor Senior Debt in excess of the amount required to make payment in full
in cash of such Guarantor Senior Debt.
SECTION 12.05 Obligations of the Guarantors Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture, the Senior
Subordinated Securities or in the Subsidiary Guarantees is intended to or shall
impair, as among the Guarantors and the Holders of the Senior Subordinated
Securities, the obligation of the Guarantors, which is absolute and
unconditional, to pay to the Holders of the Subsidiary Guarantees the principal
of and interest on the Subsidiary Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Subsidiary Guarantees and
creditors of the Guarantors other than the holders of the Guarantor Senior Debt
of the Guarantors, nor shall anything herein or therein prevent the Holder of
any Senior Subordinated Security or the Trustee on their behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of the Guarantor Senior Debt of the Guarantors in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article XII shall restrict the right of the Trustee or the
Holders of Subsidiary Guarantees to take any action to declare the Subsidiary
Guarantees to be due and payable prior to their stated maturity pursuant to
Section 6.02 or to pursue any rights or remedies hereunder; PROVIDED, HOWEVER,
that all Guarantor Senior Debt of the Guarantors then due and payable shall
first be paid in full in cash or Cash Equivalents before the Holders of the
Subsidiary Guarantees or the Trustee are entitled to receive any direct or
indirect payment from, or on behalf of, the Guarantors on account of any
Obligations on the Subsidiary Guarantees.
SECTION 12.06 Notice to Trustee. Each 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 in respect of the Senior
Subordinated Securities and the Subsidiary Guarantees pursuant to the provisions
of this Article XII (although the failure to give any such notice shall not
affect the subordination provisions set forth in this Article XII). The Trustee
shall not be charged with knowledge of the existence of any event of default
with respect to any Guarantor Senior Debt of any Guarantor or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing at its Corporate Trust
Office to that effect signed by an Officer of any Guarantor, or by a holder of
Guarantor Senior Debt or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article VII, be entitled
to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 12.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Subsidiary Guarantee), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Guarantors and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date
(although the receipt of such moneys by any Holder of Senior Subordinated
Securities shall otherwise be subject to the provisions of this Article XII).
Nothing contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Debt of the Guarantors to recover payments from Holders as
contemplated by Section 12.02 or 12.03. The Trustee shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself or
itself to be a holder of any Guarantor Senior Debt of any Guarantor (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Guarantor Senior Debt or a
trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt of any Guarantor to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt of any Guarantor 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
XII, 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 12.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article XII, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Guarantor Senior Debt of the Guarantors and
other indebtedness of the Guarantors, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII.
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt. The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Debt of the Guarantors
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 Debt of the Guarantors,
and nothing in this Indenture shall deprive the Trustee or any Paying Agent of
any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt of the
Guarantors, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XII, and
no implied covenants or obligations with respect to the holders of Guarantor
Senior Debt of the Guarantors 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 Debt of the Guarantors (except as provided in
Section 12.02 and Section 12.03(b), subject to Section 12.06). The Trustee shall
not be liable to any such holders if the Trustee shall in good faith mistakenly
pay over or distribute to Holders of Senior Subordinated Securities or to the
Guarantors or to any other Person cash, property or securities to which any
holders of Guarantor Senior Debt of any Guarantor shall be entitled by virtue of
this Article XII or otherwise.
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor Senior Debt. No right of any
present or future holders of any Guarantor Senior Debt of any Guarantor to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any such Guarantor with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article XII are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Guarantor Senior Debt of
any such Guarantor.
SECTION 12.10. Holders Authorize Trustee To Effectuate
Subordination of Subsidiary Guarantees. Each Holder of Senior Subordinated
Securities and Subsidiary Guarantees by its acceptance of them authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its or his Senior Subordinated Securities in the form required in
those proceedings. If the Trustee does not file a proper claim or proof of debt
in the form required in any proceeding referred to in Section 6.09 prior to 30
days before the expiration of the time to file such claim or claims, then any of
the holders of the Guarantor Senior Debt or their Representative is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Senior Subordinated Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Subordinated Securities, the Subsidiary Guarantees or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Guarantor Senior Debt or their Representative to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 12.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article XII shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article XII shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 12.09, the holders of Guarantor
Senior Debt of any Guarantor may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Senior Subordinated
Securities, without incurring responsibility to the Holders of the Senior
Subordinated Securities and without impairing or releasing the subordination
provided in this Article XII or the obligations hereunder of the Holders of the
Senior Subordinated Securities to the holders of Guarantor Senior Debt of any
Guarantor, do any one or more of the following: (a) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, such
Guarantor Senior Debt or any instrument evidencing the same or any agreement
under which such Guarantor Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Guarantor Senior Debt; (c) release any Person liable in
any manner for the collection of such Guarantor Senior Debt; and (d) exercise or
refrain from exercising any rights against any Guarantor and any other Person.
SECTION 12.14. Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
XII.
SECTION 12.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article XII (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act 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 notice or communication shall be in
writing and delivered in person, mailed by first-class mail, transmitted by
confirmed telecopy or sent by overnight courier, addressed as follows:
if to the Company or any Guarantor:
Cadmus Communications Corporation
6620 West Broad Street
Richmond, VA 23230
Telephone: (804) 287-5690
Facsimile: (804) 287-5683
Attention: Bruce V. Thomas, Chief Financial Officer
with a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219-4074
Telephone: (804) 788-8464
Facsimile: (804) 788-8212
Attention: T. Justin Moore, III, Esq.
if to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Telephone: (302) 651-8681
Facsimile: (302) 651-8882
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; five
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a change of address shall not be deemed to have been given
until actually received by the addressee); when receipt acknowledged, if
telecopied; and the next Business Day after timely delivered to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication mailed to a Holder, including any
notice delivered in connection with Sections 310(b), 313(c), 314(a) and 315(b)
of the TIA shall be mailed to such Holder at such Holder's address as it appears
on the Security Register and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture, the Subsidiary Guarantees or the
Senior Subordinated Securities. The Company, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or a Guarantor to the Trustee to
take or refrain from taking any action under this Indenture after the Issue
Date, at the request of the Trustee, the Company or such Guarantor, as the case
may be, shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
To the extent applicable, the Company and the Guarantors shall
comply with the provisions of TIA ss. 314(c)(3).
SECTION 13.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06 When Senior Subordinated Securities Disregarded. In
determining whether the Holders of the required principal amount of Senior
Subordinated Securities have concurred in any direction, waiver or consent,
Senior Subordinated Securities owned by the Company, the Guarantors or any of
their Affiliates shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Senior Subordinated
Securities which the Trustee actually knows are so owned shall be so
disregarded.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of Delaware or the State of New York. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.09 GOVERNING LAW. THIS INDENTURE, THE SUBSIDIARY
GUARANTEES, AND THE SENIOR SUBORDINATED SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10 Submission to Jurisdiction. The Company, each
Guarantor and each Holder of Senior Subordinated Securities, by its acceptance
thereof, consents to the jurisdiction of, and elects as the sole judicial forum
for the adjudication of any matters arising under or in connection with this
Indenture or the Senior Subordinated Securities, the courts of the County of New
York, State of New York, or of the United States of America for the Southern
District of New York.
SECTION 13.11 No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Senior Subordinated Securities, the Subsidiary Guarantees or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Senior Subordinated Security, each
Holder waives and releases all such liability. The waiver and release shall be
part of the consideration for the issue of the Senior Subordinated Securities.
SECTION 13.12 Successors. All agreements of the Company and each
Guarantor in this Indenture, the Senior Subordinated Securities and the
Subsidiary Guarantees, as the case may be, shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.13 Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
One signed copy is enough to prove this Indenture.
SECTION 13.14 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.15 Severability. In case any provision of this
Indenture, in the Senior Subordinated Securities or in a Subsidiary Guarantee
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
CADMUS COMMUNICATIONS CORPORATION
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
WILMINGTON TRUST COMPANY,
as Trustee
By: ________________________________________
Name:
Title:
GUARANTORS:
CADMUS JOURNAL SERVICES, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
WASHBURN GRAPHICS, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
AMERICAN GRAPHICS, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
EXPERT GRAPHICS, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
CADMUS DIRECT MARKETING, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
THREE SCORE, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
MACK PRINTING COMPANY
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
PORT CITY PRESS, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
MACK PRINTING GROUP, INC.
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
SCIENCE CRAFTSMAN INCORPORATED
By: ________________________________________
Name: David E. Bosher
Title: Vice President and Treasurer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
SECTION 1.01 Definitions...............................................1
SECTION 1.02 Other Definitions........................................28
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........28
SECTION 1.04 Rules of Construction....................................29
ARTICLE II THE SENIOR SUBORDINATED SECURITIES..............................................29
SECTION 2.01 Form and Dating; Issuance................................29
SECTION 2.02 Execution and Authentication.............................30
SECTION 2.03 Registrar and Paying Agent...............................31
SECTION 2.04 Paying Agent To Hold Money in Trust......................32
SECTION 2.05 Senior Subordinated Securityholder Lists.................32
SECTION 2.06 Registration of Transfer and Exchange....................32
SECTION 2.07 Replacement Senior Subordinated Securities...............33
SECTION 2.08 Outstanding Senior Subordinated Securities...............34
SECTION 2.09 Temporary Senior Subordinated Securities.................34
SECTION 2.10 Cancellation.............................................34
SECTION 2.11 Defaulted Interest.......................................35
SECTION 2.12 CUSIP Numbers............................................35
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities...............................................35
SECTION 2.14 Special Transfer Provisions..............................36
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes....................................................37
ARTICLE III REDEMPTION.....................................................................37
SECTION 3.01 Notices to Trustee.......................................37
SECTION 3.02 Selection................................................37
SECTION 3.03 Notice...................................................38
SECTION 3.04 Effect of Notice of Redemption...........................39
SECTION 3.05 Deposit of Redemption Price..............................39
SECTION 3.06 Senior Subordinated Securities Redeemed in Part..........39
SECTION 3.07 Optional Redemption......................................39
SECTION 3.08 Mandatory Redemption.....................................40
SECTION 3.09 Senior Subordinated Securities Acquired by the
Company..................................................40
ARTICLE IV COVENANTS.......................................................................40
SECTION 4.01 Payment of Senior Subordinated Securities................40
SECTION 4.02 Reports..................................................41
SECTION 4.03 Incurrence of Indebtedness...............................41
SECTION 4.04 Restricted Payments......................................41
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries.............................................43
SECTION 4.06 Asset Sales..............................................44
SECTION 4.07 Maximum Total Leverage Ratio.............................47
SECTION 4.08 Transactions with Affiliates.............................47
SECTION 4.09 Change of Control........................................48
SECTION 4.10 Compliance Certificate...................................51
SECTION 4.11 Maintenance of Properties and Insurance .................51
SECTION 4.12 Limitation on Liens......................................52
SECTION 4.13 Additional Subsidiary Guarantees.........................52
SECTION 4.14 No Layering..............................................53
SECTION 4.15 Capital Expenditures.....................................53
SECTION 4.16 Conduct of Business......................................53
SECTION 4.17 Environmental Matters....................................53
SECTION 4.18 Environmental Release....................................53
SECTION 4.19 Compliance with Laws.....................................53
SECTION 4.20 Payment of Taxes and Other Claims........................54
SECTION 4.21 Notice of Defaults.......................................54
SECTION 4.22 Waiver of Stay, Extension or Usury Laws..................54
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries............54
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries.............................................54
SECTION 4.25 Maintenance of Office or Agency..........................56
SECTION 4.26 Corporate Existence......................................56
ARTICLE V SUCCESSOR COMPANY................................................................56
SECTION 5.01 Merger, Consolidation or Sale of All or Substantially
All Assets of the Company................................56
SECTION 5.02 Merger or Consolidation of a Guarantor...................58
ARTICLE VI DEFAULTS AND REMEDIES...........................................................58
SECTION 6.01 Events of Default and Remedies...........................58
SECTION 6.02 Acceleration.............................................60
SECTION 6.03 Other Remedies...........................................61
SECTION 6.04 Waiver of Past Defaults..................................61
SECTION 6.05 Control by Majority......................................61
SECTION 6.06 Limitation on Suits......................................62
SECTION 6.07 Rights of Holders to Receive Payment.....................62
SECTION 6.08 Collection Suit by Trustee...............................62
SECTION 6.09 Trustee May File Proofs of Claim.........................62
SECTION 6.10 Priorities...............................................63
SECTION 6.11 Undertaking for Costs....................................63
ARTICLE VII THE TRUSTEE....................................................................64
SECTION 7.01 Duties of Trustee........................................64
SECTION 7.02 Rights of Trustee........................................65
SECTION 7.03 Individual Rights of Trustee.............................66
SECTION 7.04 Trustee's Disclaimer.....................................66
SECTION 7.05 Notice of Defaults.......................................66
SECTION 7.06 Reports by Trustee to Holders............................66
SECTION 7.07 Compensation and Indemnity...............................67
SECTION 7.08 Replacement of Trustee...................................68
SECTION 7.09 Successor Trustee by Merger..............................69
SECTION 7.10 Eligibility; Disqualification............................69
SECTION 7.11 Preferential Collection of Claims Against Company........69
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................................70
SECTION 8.01 Legal Defeasance and Covenant Defeasance.................70
SECTION 8.02 Conditions to Legal or Covenant Defeasance...............71
SECTION 8.03 Deposited Money and Government Senior
Subordinated Securities to be Held in Trust; Other
Miscellaneous Provisions.................................72
SECTION 8.04 Repayment to Company.....................................72
SECTION 8.05 Reinstatement............................................72
SECTION 8.06 Satisfaction and Discharge of Indenture..................73
ARTICLE IX AMENDMENTS......................................................................74
SECTION 9.01 Without Consent of Holders...............................74
SECTION 9.02 With Consent of Holders..................................75
SECTION 9.03 Compliance with Trust Indenture Act......................76
SECTION 9.04 Revocation and Effect of Consents and Waivers............76
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities...............................................76
SECTION 9.06 Trustee To Sign Amendments...............................77
SECTION 9.07 Payment for Consent......................................77
ARTICLE X SUBORDINATION OF SENIOR SUBORDINATED SECURITIES..................................77
SECTION 10.01 Senior Subordinated Securities Subordinated to Senior
Debt.....................................................77
SECTION 10.02 No Payment on Securities in Certain Circumstances........78
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc...........79
SECTION 10.04 Subrogation..............................................80
SECTION 10.05 Obligations of the Company Unconditional ................81
SECTION 10.06 Notice to Trustee........................................81
SECTION 10.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................82
SECTION 10.08 Trustee's Relation to Senior Debt........................82
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.......83
SECTION 10.10 Holders Authorize Trustee To Effectuate Subordination
of Senior Subordinated Securities........................83
SECTION 10.11 This Article Not To Prevent Events of Default............83
SECTION 10.12 Trustee's Compensation Not Prejudiced....................83
SECTION 10.13 No Waiver of Subordination Provisions....................83
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................84
SECTION 10.15 Amendments...............................................84
ARTICLE XI SUBSIDIARY GUARANTEES...........................................................84
SECTION 11.01 Subsidiary Guarantees....................................84
SECTION 11.02 Execution and Delivery of Subsidiary Guarantee...........86
SECTION 11.03 Limitation on Liability..................................86
SECTION 11.04 Successors and Assigns...................................86
SECTION 11.05 No Waiver................................................86
SECTION 11.06 Release of Guarantors....................................86
SECTION 11.07 Modification.............................................87
ARTICLE XII SUBORDINATION OF SUBSIDIARY GUARANTEES.........................................87
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt..............................................87
SECTION 12.02 No Payment on Securities in Certain Circumstances........89
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc...........90
SECTION 12.04 Subrogation..............................................91
SECTION 12.05 Obligations of the Guarantors Unconditional..............91
SECTION 12.06 Notice to Trustee........................................91
SECTION 12.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................92
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt..............92
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Debt..............................................93
SECTION 12.10 Holders Authorize Trustee To Effectuate Subordination
of Subsidiary Guarantees.................................93
SECTION 12.11 This Article Not To Prevent Events of Default............93
SECTION 12.12 Trustee's Compensation Not Prejudiced....................93
SECTION 12.13 No Waiver of Subordination Provisions....................93
SECTION 12.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................94
SECTION 12.15 Amendments...............................................94
ARTICLE XIII MISCELLANEOUS.................................................................94
SECTION 13.01 Trust Indenture Act Controls.............................94
SECTION 13.02 Notices..................................................94
SECTION 13.03 Communication by Holders with Other Holders..............95
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.......95
SECTION 13.05 Statements Required in Certificate or Opinion............96
SECTION 13.06 When Senior Subordinated Securities Disregarded..........96
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar.............96
SECTION 13.08 Legal Holidays...........................................96
SECTION 13.09 GOVERNING LAW............................................97
SECTION 13.10 Submission to Jurisdiction...............................97
SECTION 13.11 No Recourse Against Others...............................97
SECTION 13.12 Successors...............................................97
SECTION 13.13 Multiple Originals.......................................97
SECTION 13.14 Table of Contents; Headings..............................97
SECTION 13.15 Severability.............................................97
EXHIBITS
EXHIBIT A - Form Of Senior Subordinated Note
EXHIBIT B - Form Of Rollover Note
EXHIBIT C - Global Senior Subordinated Securities Legend
</TABLE>
Exhibit 10.3
CADMUS COMMUNICATIONS CORPORATION
SENIOR SUBORDINATED INCREASING RATE NOTES, SERIES B
INDENTURE
DATED AS OF APRIL 1, 1999
WILMINGTON TRUST COMPANY,
TRUSTEE
<PAGE>
INDENTURE, dated as of April 1, 1999, among CADMUS COMMUNICATIONS
CORPORATION, a Virginia corporation (the "Company"), the GUARANTORS (as defined
herein) and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee
(the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Company's Senior
Subordinated Increasing Rate Notes, Series B, issued pursuant to this Indenture
on the date hereof and guaranteed by the Guarantors (the "Senior Subordinated
Notes"), (ii) any Roll-Over Notes (as defined herein) that may be issued upon
the Initial Maturity Date (as defined herein) and (iii) any Exchange Notes or
Private Exchange Notes (each as defined herein) if and when issued as provided
in the Registration Rights Agreement (as defined herein) in exchange for any
Roll-Over Notes. The Senior Subordinated Notes, any Roll-Over Notes, any
Exchange Notes and any Private Exchange Notes, treated as one class, are
collectively referred to as the "Senior Subordinated Securities."
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or that is assumed in connection with the
acquisition of assets from such Person, in each case, not Incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"ACQUISITION" means the acquisition contemplated by the Stock Purchase
Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and
the terms "controlling" and "controlled" have meanings correlative of the
foregoing. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Securitization Entity makes an
Investment in connection with a Qualified Securitization Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"APPLICABLE CALL PREMIUM" means, as of a particular date, the
number set forth opposite such date in the table below, expressed as a
percentage of the principal amount of the Roll-Over Notes or Exchange Notes, as
the case may be.
REDEMPTION DATE PREMIUM
2004.............................................. 107.000%
2005.............................................. 104.667%
2006.............................................. 102.333%
2007 and thereafter............................... 100.000%
"ASSET ACQUISITION" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or of any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) 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 comprises any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Restricted Subsidiary of the Company or
(b) any other property or assets of the Company or any Restricted Subsidiary of
the Company other than in the ordinary course of business. Notwithstanding the
foregoing, the following shall not be deemed to be Asset Sales: (w) a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than $250,000;
(x) the sale, lease, conveyance, disposition or other transfer of all or
substantially all of the assets of the Company as permitted by Section 5.01; (y)
sales of accounts receivable and related assets (including contract rights) of
the type specified in the definition of "Qualified Securitization Transaction"
to a Securitization Entity for the fair market value thereof, including cash in
an amount at least equal to 75% of the fair market value thereof as determined
in accordance with GAAP (for the purposes of this clause (y), Purchase Money
Notes shall be deemed to be cash); and (z) transfers of accounts receivable and
related assets (including contract rights) of the type specified in the
definition of Qualified Securitization Transaction (or a fractional undivided
interest therein) by a Securitization Entity in a Qualified Securitization
Transaction.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banking institutions in the State of Delaware or the City of New York
are authorized or required by law or governmental action to be closed.
"CAPITAL EXPENDITURES" means, for any period, the sum of all capital
expenditures Incurred during such period by the Company and its Consolidated
Subsidiaries (other than capitalized interest), as determined in accordance with
GAAP
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing regulations and
amendments.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group"), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of this Indenture); (ii) the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any Person or Group is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 14(d) 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),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company, measured by voting power rather than number of shares; (iv) the first
day on which a majority of the members of the Board of Directors of the Company
are not Continuing Directors; or (v) the Company consolidates with, or merges
with or into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Capital
Stock) of the surviving or transferee Person constituting a majority of such
Voting Stock of such surviving or transferee Person, measured by voting power
rather than number of shares (immediately after giving effect to such issuance).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such in the introductory paragraphs
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and thereafter, means such successor.
"CONSOLIDATED CASH FLOW" means, for any period, the sum, without
duplication, of (a) Consolidated Net Income for such period, (b) taxes on income
of the Company and its Consolidated Subsidiaries for such period to the extent
deducted in determining Consolidated Net Income for such period, (c) interest
expensed in respect of Indebtedness of the Company or any of its Consolidated
Subsidiaries (other than any Obligations of the Company or such Consolidated
Subsidiaries under Currency Agreements or Interest Swap Agreements) outstanding
during such period, PROVIDED that there shall be excluded from such interest
amount any amount that would otherwise be included therein with respect to the
non-cash amortization of deferred financing costs, (d) book depreciation
expenses of the Company and its Consolidated Subsidiaries for such period, and
(e) amortization of intangible assets of the Company and its Consolidated
Subsidiaries for such period, all determined with respect to the Company and its
Consolidated Subsidiaries on a consolidated basis for such period and in
accordance with GAAP. In determining Consolidated Cash Flow for any period, (i)
any Consolidated Subsidiary acquired during such period by the Company or any
other Consolidated Subsidiary shall be included on a PRO FORMA, historical basis
as if it had been a Consolidated Subsidiary during such entire period, (ii) any
amounts which would be included in a determination of Consolidated Cash Flow for
such period with respect to assets acquired during such period by the Company or
any Consolidated Subsidiary shall be included in the determination of
Consolidated Cash Flow for such period and the amount thereof shall be
calculated on a PRO FORMA, historical basis as if such assets had been acquired
by the Company or such Consolidated Subsidiary prior to the first day of such
period, (iii) any Consolidated Subsidiary sold during such period by the Company
or any other Consolidated Subsidiary shall be excluded as if it had not been a
Consolidated Subsidiary at any time during such period, and (iv) any amounts
which would be otherwise included in a determination of Consolidated Cash Flow
for such period with respect to assets sold or otherwise disposed of during such
period by the Company or any Consolidated Subsidiary shall be excluded in the
determination of Consolidated Cash Flow for such period and the amount excluded
shall be calculated as if such assets had been sold or otherwise disposed of by
the Company or such Consolidated Subsidiary prior to the first day of such
period; provided that for each fiscal quarter of the Company ending June 30,
1999, September 30, 1999 and December 31, 1999, Consolidated Cash Flow shall be
increased by the amount of the Net Cash Flow Adjustment for such fiscal quarter
of the Company.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the
extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes
of such Person and its Restricted Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges LESS any non-cash items
increasing Consolidated Net Earnings for such period, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in accordance
with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "Transaction
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a PRO FORMA basis (in accordance with Article
11 of Regulation S-X under the Securities Act) for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
Incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the Incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital or revolving credit facilities, occurring during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such Incurrence or repayment, as the case
may be (and the application of the proceeds thereof), had occurred on the first
day of the Four Quarter Period and (ii) 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 of such
Person arising as a result of the Asset Acquisition) Incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any PRO FORMA expense and cost reductions
calculated in accordance with Article 11 of Regulation S-X under the Securities
Act) attributable to the assets which are the subject of the Asset Acquisition
or Asset Sale or other disposition during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or other disposition or Asset Acquisition (including the Incurrence,
assumption or liability for any such Acquired Indebtedness) occurred on the
first day of the Four Quarter Period. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the Incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly Incurred or otherwise assumed such guaranteed Indebtedness. If, since
the beginning of such Four Quarter Period, any Person (that subsequently became
a Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such Four
Quarter Period) shall have made any Asset Sale or other disposition or Asset
Acquisition that would have required adjustment pursuant to this definition,
then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving PRO
FORMA effect thereto (in accordance with Article 11 of Regulation S-X under the
Securities Act) as if such Asset Sale or other disposition or Asset Acquisition
had occurred at the beginning of the applicable Four Quarter Period.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of the "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 agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock) paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated federal, state and local
tax rate of such Person, expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount and amortization or write-off
of deferred financing costs, (b) the net costs under Interest Swap Obligations,
(c) all capitalized interest and (d) the interest portion of any deferred
payment obligation; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET EARNINGS" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom: (a) after-tax gains
from Asset Sales (without regard to the $250,000 limitation set forth in the
definition thereof) or abandonments or reserves relating thereto; (b) after-tax
items classified as extraordinary, unusual or nonrecurring gains; (c) the net
income of any Person acquired in a "pooling of interests" transaction accrued
prior to the date it becomes a Restricted Subsidiary of the referent Person or
is merged or consolidated with the referent Person or any Restricted Subsidiary
of the referent Person; (d) the net income (but not loss) of any Restricted
Subsidiary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by a contract, operation of law or otherwise; (e) the net income
of any Person, other than a Restricted Subsidiary of the referent Person, except
to the extent of cash dividends or distributions paid to the referent Person or
to a Wholly Owned Restricted Subsidiary of the referent Person by such Person;
(f) any restoration of income of any contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Earnings
accrued at any time following the Issue Date; (g) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period, whether or not such operations were classified as
discontinued); and (h) 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 Person prior to such consolidation, merger or transfer
of assets.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis,
but excluding (i) any non-cash restructuring and/or integration charges taken by
the Company in connection with the transactions described in the Stock Purchase
Agreement up to an aggregate amount of $12.0 million, (ii) extraordinary items
and (iii) any equity interests of the Company or any Subsidiary of the Company
in the unremitted earnings of any Person that is not a Subsidiary of the
Company.
"CONSOLIDATED NET WORTH" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash charges
and expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Earnings of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary item or loss or any
such charge which requires an accrual of or a reserve for cash charges for any
future period).
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary of the
Company or other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Company in its consolidated financial statements
as of such date.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate Indebtedness
of the Company and its Consolidated Subsidiaries plus all Securitization
Facility Attributed Debt, determined on a consolidated basis as of such date.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of such
Board of Directors on the Issue Date; or (2) was nominated for election or
elected to the Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001.
"CREDIT AGREEMENT" means the Credit Agreement dated as of April 1, 1999,
among the Company, the lenders party thereto in their capacities as lenders
thereunder, NationsBank, N.A., as Documentation Agent, First Union National
Bank, as Syndication Agent, and Wachovia Bank, N.A., as Agent, together with the
related documents thereto (including 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 or adding Restricted Subsidiaries of the Company
as additional borrowers or guarantors thereof) 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.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"CUSTODIAN" means the custodian with respect to any Global Senior
Subordinated Security (as appointed by the Depositary), or any successor entity
thereto as provided in Section 2.03.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to the Senior Subordinated Securities
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 as the Depositary with respect to the Senior Subordinated
Securities, until a successor shall have been appointed and become such pursuant
to the applicable provisions of this Indenture, and thereafter, "Depositary"
shall mean or include such successor.
"DESIGNATED GUARANTOR SENIOR DEBT" means (i) Indebtedness of a Guarantor
under or in respect of the Credit Agreement, (ii) Indebtedness of a Guarantor
under or in respect of the Series A Indenture, (iii) Indebtedness of a Guarantor
under or in respect of the Series C Indenture and (iv) any other Indebtedness
constituting Guarantor Senior Debt which, at the time of determination, has an
aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Guarantor Senior Debt as
"Designated Guarantor Senior Debt."
"DESIGNATED SENIOR DEBT" means (i) Indebtedness of the Company under or
in respect of the Credit Agreement, (ii) Indebtedness of the Company under or in
respect of the Series A Indenture, (iii) Indebtedness of the Company under or in
respect of the Series C Indenture and (iv) any other Indebtedness constituting
Senior Debt which, at the time of determination, has an aggregate principal
amount of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Debt as "Designated Senior Debt."
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof on or prior to the final maturity date
of the Senior Subordinated Securities. Notwithstanding the preceding sentence,
any Capital Stock that would constitute Disqualified Capital Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or asset sale
shall not constitute Disqualified Capital Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.04 of this Indenture.
"DOLLARS" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the
Company that is incorporated or otherwise organized under the laws of the United
States or any State thereof or the District of Columbia.
"ENVIRONMENTAL AUTHORITY" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"ENVIRONMENTAL RELEASES" means releases as defined by CERCLA or under
any applicable state or local environmental law or regulation.
"ENVIRONMENTAL REQUIREMENTS" means any legal requirement relating to
health, safety or the environment and applicable to the Company, any Subsidiary
of the Company or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees and common law.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"EXCHANGE NOTES" means the Company's Senior Subordinated Notes due 2009
issued in exchange for the Roll-Over Notes pursuant to the Registration Rights
Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GLOBAL SENIOR SUBORDINATED SECURITIES LEGEND" means the legend set
forth in Exhibit C.
"GLOBAL SENIOR SUBORDINATED SECURITY" means a Senior Subordinated
Security that bears the Global Senior Subordinated Securities Legend.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letter of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"GUARANTOR" means (1) each of Cadmus Journal Services, Inc., a Virginia
corporation, Washburn Graphics, Inc., a North Carolina corporation, American
Graphics, Inc., a Georgia corporation, Expert Graphics, Inc., a Virginia
corporation, Cadmus Direct Marketing, Inc., a North Carolina corporation, Three
Score, Inc., a Georgia corporation, Mack Printing Company, a Pennsylvania
corporation, Port City Press, Inc., a Maryland corporation, Mack Printing Group,
Inc., a Delaware corporation, and Science Craftsman Incorporated, a New York
corporation, and (2) each of the Company's Restricted Subsidiaries that in the
future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; PROVIDED that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.
"GUARANTOR SENIOR DEBT" means, with respect to any Guarantor, the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Guarantor,
whether outstanding on the Issue Date or thereafter created, Incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Subsidiary Guarantee of such Guarantor. Without limiting the
generality of the foregoing, "Guarantor Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of (1) all monetary obligations of every nature of such Guarantor in respect of
the Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (2) all monetary obligations of every nature of such
Guarantor in respect of the Series A Indenture, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (3) all monetary obligations
of every nature of such Guarantor in respect of the Series C Indenture,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (4) all Interest Swap Obligations (including guarantees thereof),
and (5) all obligations under Currency Agreements (including guarantees
thereof), in each case, whether outstanding on the Issue Date or thereafter
Incurred. Notwithstanding the foregoing, "Guarantor Senior Debt," with respect
to any Guarantor, shall not include (i) any Indebtedness of such Guarantor to a
Subsidiary or Affiliate of such Guarantor, or any Subsidiary of such Affiliate,
(ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director,
officer or employee of such Guarantor or any Subsidiary of such Guarantor
(including, without limitation, amounts owed for compensation), (iii)
Indebtedness to trade creditors and other amounts Incurred in connection with
obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by such Guarantor, (vi) that portion of Indebtedness
Incurred in violation of the provisions of Section 4.03 (but, as to any such
obligation, no such violation shall be deemed to exist for purposes of this
clause (vi) if the holder(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Company to the
effect that the Incurrence of such Indebtedness does not (or, in the case of
revolving credit indebtedness, that the Incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (vii) Indebtedness which,
when Incurred and without respect to any election under Section 1111(b) of Title
11, United States Code, is without recourse to such Guarantor, and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of such Guarantor.
"HAZARDOUS MATERIALS" means, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, 42
U.S.C. ss.6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) any "hazardous substance",
"pollutant" or "containment", as defined in CERCLA, or in any applicable state
or local law regulation, (c) gasoline, or any other petroleum product or
by-product, including crude oil or any fraction thereof, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any applicable
state or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time.
"HOLDER" OR "SENIOR SUBORDINATED SECURITYHOLDER" means the Person in
whose name a Senior Subordinated Security is registered on the Registrar's
books.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all Obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all Obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person and (ix) all Disqualified Capital Stock issued by
such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to any
provision hereof, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT FINANCIAL ADVISOR" means a nationally recognized investment
banking or accounting firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company or any of its Subsidiaries and (ii) which, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL MATURITY DATE" means April 1, 2000, the maturity date of the
Senior Subordinated Notes; PROVIDED, that if on such date there exists any
Default under Section 6.01(a), (c), (d), (e) or (h) but any applicable grace
period has not expired as of such date, the Initial Maturity Date shall be
postponed until the earlier to occur of (i) the date on which all such Defaults
are cured and (ii) the date on which any such grace period expires.
"INTEREST" means, with respect to any Senior Subordinated Security, the
sum of cash interest and any Additional Interest (as defined in the Registration
Rights Agreement) on such Senior Subordinated Securities.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including a guarantee) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
Person. "Investment" shall exclude extensions of trade credit by the Company and
its Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case
may be. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Restricted Subsidiary is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Common Stock
of such Restricted Subsidiary not sold or disposed of.
"ISSUE DATE" means the date of original issuance of the Senior
Subordinated Notes.
"JUNIOR SUBORDINATED NOTES" means, collectively, the three (3) 11.5%
subordinated promissory notes due March 31, 2010 of the Company.
"LIBOR PERIOD" means each period which begins on the last day of the
immediately preceding LIBOR Period (or, in the case of the first LIBOR Period,
which begins on the Issue Date) and ends on the date occurring ninety (90) days
thereafter; provided that if such date is not a Business Day, the respective
LIBOR Period shall end on the next succeeding Business Day.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"NET CASH FLOW ADJUSTMENT" means, for any period, solely for calculating
Consolidated Cash Flow for any four fiscal quarter period of the Company ending
on or before the first anniversary of the Issue Date, an amount (up to a maximum
amount of $3,034,000 for any such four fiscal quarter period) equal to any
quantifiable cost savings, the amount of which the Company demonstrates in
reasonable detail to the agent under the Credit Agreement as having been
realized by the Company and its Subsidiaries as a result of, or in connection
with, the Acquisition, such cost savings in each case to be given PRO FORMA
effect as if they had been realized commencing as of the beginning of the third
fiscal quarter of the Company immediately preceding the fiscal quarter in which
the Company demonstrates such cost savings to the agent under the Credit
Agreement (in each case without duplication of any amounts already included in
Consolidated Cash Flow for the relevant period or any portion thereof).
"NET CASH PROCEEDS" means, (a) with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Subsidiaries from such Asset
Sale net of (i) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions); (ii) taxes paid or payable relating to such
Asset Sale after taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing arrangements;
(iii) the repayment of Indebtedness that is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets; and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
of the Company, as the case may be, as a reserve, in accordance with GAAP,
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary of the Company, as the case may be, after
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, and (b) with respect to any issuance or sale of Take-Out
Securities by any Person, the proceeds of such Incurrence, issuance or sale in
the form of cash or Cash Equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received by such Person in the form of cash or
Cash Equivalents and proceeds from the conversion of other property received by
such Person when converted to cash or Cash Equivalents, net of reasonable
out-of-pocket fees and expenses (including reasonable attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and reasonable brokerage, consultant and other fees) Incurred in
connection with such Incurrence, issuance or sale.
"NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or the Controller of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
such Person that meets the requirements set forth in Sections 13.04 and 13.05 of
this Indenture.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"PARTICIPATING SUBSIDIARY" means any Subsidiary of the Company that is a
participant in a Permitted Securitization.
"PERMITTED BUSINESS" means any business (including stock or assets) that
derives its revenues from the business engaged in by the Company and its
Restricted Subsidiaries on the Issue Date and/or activities that are reasonably
similar, ancillary or related to, or a reasonable extension, development or
expansion of, the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(i) Indebtedness under the Senior Subordinated Securities, the
Series A Securities, the Series C Securities, this Indenture, the Series
A Indenture, the Series C Indenture and the Subsidiary Guarantees.
(ii) Indebtedness Incurred by the Company pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed $200.0 million, reduced by (a) the amount of all mandatory
principal payments actually made by the Company in respect of term loans
thereunder; (b) the amount of all required permanent repayments, if any
(which are accompanied by a corresponding permanent commitment
reduction), thereunder; and (c) the aggregate amount of Indebtedness of
Securitization Entities in Qualified Securitization Transactions at the
time outstanding, to the extent that the net proceeds from such
Indebtedness are not used (within 5 Business Days of the Incurrence of
such Indebtedness) to make mandatory principal payments or required
permanent repayments in accordance with clauses (a) and (b) above;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually
paid or permanent reductions thereof;
(iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of
its Restricted Subsidiaries; PROVIDED that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness
Incurred in accordance with this Indenture to the extent that the
notional principal amount of any such Interest Swap Obligation does not
exceed the principal amount of the Indebtedness to which such Interest
Swap Obligation relates;
(v) Indebtedness of the Company or any of its Restricted
Subsidiaries under Currency Agreements; PROVIDED that such Currency
Agreements are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in the value of foreign currencies
purchased or received in the ordinary course of business; PROVIDED,
FURTHER, that, in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the Indebtedness
of the Company and its Restricted Subsidiaries outstanding other than as
a result of fluctuations of foreign currency exchange rates or by reason
of fees, indemnities and compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly Owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary of the Company, in each case subject
to no Lien held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company; PROVIDED that if as of any date
any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
Incurrence of Indebtedness not constituting Permitted Indebtedness by
the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company, in each case subject
to no Lien; PROVIDED that (a) any Indebtedness of the Company to any
Wholly Owned Restricted Subsidiary of the Company that is not a
Guarantor is unsecured and subordinated, pursuant to a written
agreement, to the Company's Obligations under this Indenture and the
Senior Subordinated Securities and (b) if as of any date any Person
other than a Wholly Owned Restricted Subsidiary of the Company owns or
holds any such Indebtedness or any Person holds a Lien in respect of
such Indebtedness, such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two Business Days
of Incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations
in connection with self-insurance or similar requirements in the
ordinary course of business;
(x) Refinancing Indebtedness;
(xi) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Indebtedness of the Company and its Restricted
Subsidiaries Incurred in the ordinary course of business not to exceed
$5.0 million at any one time outstanding;
(xii) the Incurrence by a Securitization Entity of Indebtedness
in a Qualified Securitization Transaction that is without recourse to
the Company or any Subsidiary of the Company (except for Standard
Securitization Undertakings);
(xiii) so long as no Senior Subordinated Note, Series A Note or
Series C Note is then outstanding, additional Indebtedness of the
Company and its Restricted Subsidiaries in an aggregate principal amount
not to exceed $10.0 million at any one time outstanding (which amount
may, but need not, be Incurred in whole or in part under the Credit
Agreement); and
(xiv) Indebtedness under the Take-Out Senior Subordinated Debt
and any guarantees thereof.
For purposes of determining compliance with Section 4.03, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xi),
(xiii) or (xiv) above or is otherwise entitled to be Incurred pursuant to
Section 4.03(a), the Company shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with such
Section. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Capital Stock will not be deemed to be an Incurrence of Indebtedness of an
issuance of Disqualified Capital Stock for purposes of Section 4.03. The amount
of Indebtedness issued at a price that is either less or greater than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
"PERMITTED INVESTMENTS" means: (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Wholly Owned Restricted Subsidiary
of the Company that is a Guarantor or any Person if as a result of such
Investment such Person shall become a Wholly Owned Restricted Subsidiary of the
Company that is a Guarantor or will merge or consolidate with or into the
Company or a Wholly Owned Restricted Subsidiary of the Company that is a
Guarantor; (ii) Investments in the Company by any Restricted Subsidiary of the
Company; PROVIDED that any Indebtedness evidencing such Investment is unsecured
and subordinated, pursuant to a written agreement and to the same extent the
Series A Securities, the Series C Securities, Senior Subordinated Securities and
the Series A Indenture, the Series C Indenture and this Indenture are
subordinated to Senior Debt, to the Company's Obligations under the Senior
Subordinated Securities and this Indenture; (iii) Investments in cash and Cash
Equivalents; (iv) loans and advances to employees and officers of the Company
and its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes in an aggregate principal amount not to exceed $2.0 million at
any one time outstanding; (v) Currency Agreements and Interest Swap Obligations
entered into in the ordinary course of the Company's or its Restricted
Subsidiaries' businesses and otherwise in compliance with this Indenture; (vi)
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; (vii) Investments made by the
Company or its Restricted Subsidiaries as a result of consideration received in
connection with an Asset Sale made in compliance with the provisions of Section
4.06; (viii) additional Investments having an aggregate fair market value, when
taken together with all other Investments made pursuant to this clause (viii)
that are at that time outstanding, not to exceed $5.0 million (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value); (ix) any Investment by the
Company or a Restricted Subsidiary of the Company in a Securitization Entity or
any Investment by a Securitization Entity in any other Person in connection with
a Qualified Securitization Transaction; PROVIDED that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest; and (x) Investments in Permitted Businesses made by the Company or any
Wholly Owned Restricted Subsidiary of the Company that is a Guarantor having an
aggregate fair market value, when taken together with all other Investments made
pursuant to this clause (x) after the Issue Date, not to exceed $5.0 million
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value).
"PERMITTED LIENS" means the following types of Liens:
(i) Liens securing Senior Debt and Guarantor Senior Debt
(including Liens securing Indebtedness outstanding under the Credit
Agreement) to the extent that the Indebtedness secured thereby is
permitted to be Incurred pursuant to Section 4.03;
(ii) Liens securing the Series A Securities, the Series C
Securities, the Senior Subordinated Securities and the Subsidiary
Guarantees;
(iii) Liens in favor of the Company or any Wholly Owned
Restricted Subsidiary of the Company on assets of any Restricted
Subsidiary of the Company;
(iv) Liens existing on the Issue Date securing Indebtedness
existing on the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date;
(v) Liens securing Refinancing Indebtedness which is Incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this Indenture and which has been Incurred in accordance with the
provisions of this Indenture, PROVIDED that such Liens (a) are no less
favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced and (b) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing
the Indebtedness so Refinanced;
(vi) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or any of its
Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;
(vii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen and repairmen and other
Liens imposed by law Incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(viii) Liens Incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(ix) judgment Liens not giving rise to an Event of Default so
long as any 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;
(x) 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;
(xi) any interest or title of a lessor under any Capitalized
Lease Obligation, PROVIDED that such Liens do not extend to any property
of asset which is not leased property subject to such Capitalized Lease
Obligation;
(xii) Liens securing Purchase Money Indebtedness of the Company
or any Restricted Subsidiary of the Company, PROVIDED that (a) the
Purchase Money Indebtedness shall not exceed the purchase price or the
cost of construction or improvement of such property or assets, as the
case may be, and shall not be secured by any property or assets of the
Company or any Restricted Subsidiary of the Company other than the
property or assets so acquired, constructed or improved and (b) the Lien
securing such Indebtedness shall be created within 90 days of such
acquisition or completion of construction or improvement;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(xiv) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xv) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(xvi) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under this Indenture;
(xvii) Liens securing Indebtedness under Currency Agreements;
(xviii)Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of custom duties in connection with
the importation of goods;
(xix) Liens securing Acquired Indebtedness Incurred in compliance
with Section 4.03, PROVIDED that (a) such Liens secured such Acquired
Indebtedness at the time of and prior to the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company
and were not granted in anticipation of the Incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company
and (b) such Liens do not extend to or cover any property or assets of
the Company or of any of its Restricted Subsidiaries other than the
property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
Incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company; and
(xx) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case Incurred in connection
with a Qualified Securitization Transaction.
"PERMITTED SECURITIZATION" means any financing program providing for the
sale or transfer of Securitization Assets by the Company or its Participating
Subsidiaries, in transactions purporting to be sales (and treated as sales for
GAAP purposes) (1) to one or more limited purpose financing companies, special
purpose entities and/or other financial institutions; (2) in each case, on a
non-recourse basis as to the Company and the Participating Subsidiaries; and (3)
in each case, the fair market value of the Securitization Assets sold or
transferred, including cash in an amount at least equal to 75% of the fair
market value thereof, as determined in accordance with GAAP (for purposes of
this definition, Purchase Money Notes shall be deemed cash).
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization. trust or joint venture, or a
governmental agency or political subdivision thereof.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRIVATE EXCHANGE NOTES" means the "Private Exchange Notes," as defined
in the Registration Rights Agreement.
"PRODUCTIVE ASSETS" means properties and assets (including Capital
Stock) that are used or useful by the Company and its Restricted Subsidiaries in
Permitted Businesses.
"PROPERTIES" means all real property owned, leased or otherwise used or
occupied by the Company or any Subsidiary of the Company, wherever located.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries Incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
construction or improvement, of property or equipment.
"PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company in connection with a Qualified Securitization
Transaction to a Securitization Entity, which note shall be repaid from cash
available to the Securitization Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of newly generated receivables.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series
of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any or its Subsidiaries may sell,
convey or otherwise transfer to (a) a Securitization Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and contract rights and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable.
"RECEIVABLES SUBSIDIARY" means a special purpose, bankruptcy remote
Wholly Owned Subsidiary of the Company which may be formed for the sole and
exclusive purpose of engaging in activities in connection with the purchase,
sale and financing of Securitization Assets in connection with and pursuant to a
Permitted Securitization.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness (the proceeds of which are applied within 60
days after the Incurrence thereof) in exchange or replacement for, such security
or Indebtedness in whole or in part. "Refinanced" and "Refinancing" have
correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness Incurred in accordance with
the provisions of Section 4.03 (other than pursuant to clause (ii), (iv), (v),
(vi), (vii), (viii), (ix), (xi), (xii) or (xiii) of the definition of Permitted
Indebtedness), in each case that does not (1) directly or indirectly result in
an increase in the aggregate principal amount (or accreted value, if applicable)
of Indebtedness of the Company or such Restricted Subsidiary as of the date of
such Refinancing (plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness and plus the amount of
reasonable fees and expenses Incurred by the Company or such Restricted
Subsidiary in connection with such Refinancing) or (2) create Indebtedness with
(A) a Weighted Average Life to Maturity as of the date of such Refinancing that
is less than the Weighted Average Life to Maturity at such time of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; PROVIDED that (x) such
Refinancing Indebtedness shall be Indebtedness solely by the obligor of the
Indebtedness being Refinanced and (y) if such Indebtedness being Refinanced is
subordinate or junior to the Series A Securities, the Series C Securities, the
Senior Subordinated Securities or a Subsidiary Guarantee, then such Refinancing
Indebtedness shall be subordinate to the Senior Subordinated Securities or such
Subsidiary Guarantee, as the case may be, at least to the same extent and in the
same manner as the Indebtedness being Refinanced.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of April 1, 1999, among the Company, the Guarantors and the Holders.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative in respect of any Senior Debt or Guarantor Senior Debt; PROVIDED
that if, and for so long as, any Senior Debt or Guarantor Senior Debt lacks such
a representative, then the Representative for such Senior Debt or Guarantor
Senior Debt shall at all times constitute the holders of a majority in
outstanding principal amount of such Senior Debt or Guarantor in respect of any
Senior Debt or Guarantor Senior Debt.
"RESTRICTED SECURITIES LEGEND" means the legend to substantially the
following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, BUT HAS
BEEN ISSUED IN RELIANCE ON AN EXEMPTION FROM SUCH REGISTRATION, AND IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER DESCRIBED IN THE NOTE
PURCHASE AGREEMENT DATED APRIL 1, 1999, AMONG CADMUS COMMUNICATIONS
CORPORATION, THE GUARANTORS NAMED THEREIN, PURICO (IOM) LIMITED, MELHAM
U.S. INC., PAUL F. MACK AND STATE STREET BANK AND TRUST COMPANY N.A., AS
SPECIAL PURPOSE ESCROW AGENT (THE "NOTE PURCHASE AGREEMENT'). NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF EXCEPT (I) IN ACCORDANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
IN THE NOTE PURCHASE AGREEMENT AND (II) PURSUANT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
OR, PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"ROLL-OVER NOTES" means any of the Company's Senior Subordinated Notes
due 2009 issued upon the Initial Maturity Date of the Senior Subordinated Notes
pursuant to the provisions of this Indenture and guaranteed by the Guarantors.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of the Company of any
property, whether owned by the Company or any Restricted Subsidiary of the
Company at the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"SECURITIZATION ASSETS" means all accounts receivable (whether now
existing or arising in the future) of the Company or any of its Participating
Subsidiaries which are sold or transferred pursuant to a Permitted
Securitization, and any assets related thereto, including without limitation (i)
all collateral given by any of the foregoing, (ii) all contracts and all
guarantees (but not by the Company or any of its Subsidiaries) or other
obligations directly related to any of the foregoing, (iii) other related assets
including those set forth in the Securitization Documents, and (iv) proceeds of
all of the foregoing.
"SECURITIZATION DOCUMENTS" shall mean all documentation relating to any
Permitted Securitization.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) 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
Securitization Entity: (a) no portion of the Indebtedness or any other
obligation (contingent or otherwise) of which (i) is guaranteed by the Company
or any Subsidiary of the Company (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings), (ii) is recourse to or obligates the Company or
any Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of the
Company or any Subsidiary of the Company, directly or indirectly, contingently
or otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither the Company nor any
Subsidiary of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or such
Subsidiary 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 receivables of such entity, and (c) to
which neither the Company nor any 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 such designation by the
Board of Directors of the Company shall be evidenced to the Trustee by filing
with the Trustee a Board Resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"SECURITIZATION FACILITY ATTRIBUTED DEBT" at any time means, without
duplication, the aggregate net outstanding amount theretofore paid to the
Receivables Subsidiary, the Company or any Participating Subsidiary in respect
of the Securitization Assets sold or transferred by it in connection with a
Permitted Securitization (it being the intent of the parties that the amount of
Securitization Facility Attributed Debt at any time outstanding approximate as
closely as possible the principal amount of Indebtedness which would be
outstanding at such time under the Permitted Securitization if the same were
structured as a secured lending agreement rather than a purchase agreement).
"SENIOR DEBT" means, the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, Incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Senior Subordinated Securities. Without
limiting the generality of the foregoing, "Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of (1) all monetary obligations of every nature of the Company under the Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (2) all monetary obligations of every nature of the Company under
the Series A Indenture, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (3) all monetary obligations of every nature of the
Company in respect of the Series C Indenture, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (4) all Interest Swap
Obligations (including guarantees thereof), and (5) all obligations under
Currency Agreements (including guarantees thereof), in each case, whether
outstanding on the Issue Date or thereafter Incurred. Notwithstanding the
foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company
to any Subsidiary or Affiliate of the Company, or any Subsidiary of such
Affiliate, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of the Company or any Subsidiary of the Company
(including, without limitation, amounts owed for compensation), (iii)
Indebtedness to trade creditors and other amounts Incurred in connection with
obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Capital Stock, (v) any liability for federal, state, local or other
taxes owed or owing by the Company, (vi) that portion of any Indebtedness
Incurred in violation of Section 4.03 (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause (vi) if the
holder(s) of such obligation or their representative and the Trustee shall have
received an Officers' Certificate of the Company to the effect that the
Incurrence of such Indebtedness does not (or, in the case of revolving credit
indebtedness, that the Incurrence of the entire committed amount thereof at the
date on which the initial borrowing thereunder is made would not) violate such
provisions of this Indenture), (vii) Indebtedness which, when Incurred and
without respect to any election under Section 1111(b) of Title 11 of the United
States Code, is without recourse to the Company, and (viii) any Indebtedness
which is, by its express terms, subordinated in right of payment to any other
Indebtedness of the Company.
"SENIOR SUBORDINATED NOTES" shall have the meaning set forth in the
Recitals hereto.
"SENIOR SUBORDINATED SECURITIES" shall have the meaning set forth in the
Recitals hereto.
"SERIES A INDENTURE" means the indenture, dated the date hereof, among
the Company, the guarantors named therein and Wilmington Trust Company, as
trustee, as amended or supplemented from time to time, relating to $40.0 million
in aggregate principal amount of the Company's senior subordinated increasing
rate notes, Series A.
"SERIES C INDENTURE" means the indenture, dated the date hereof, among
the Mack Printing Company, the guarantors named therein and Wilmington Trust
Company, as trustee, as amended or supplemented from time to time, relating to
$10.0 million in aggregate principal amount of the Mack Printing Company's
senior subordinated increasing rate notes, Series C.
"SERIES A NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series A Indenture.
"SERIES C NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series C Indenture.
"SERIES A SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series A Indenture.
"SERIES C SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series C Indenture.
"SIGNIFICANT SUBSIDIARY" with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act; PROVIDED, HOWEVER, that, for purposes of Section 4.13, such
satisfaction shall be determined based on 5.0%, rather than 10.0%.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which are reasonably customary in an accounts
receivable transaction.
"STATED MATURITY" means, with respect to any installment of principal or
interest on any Senior Subordinated Securities, the date on which such payment
of principal or interest was scheduled to be paid pursuant hereto, and shall not
include any contingent obligations to repay, redeem or repurchase any such
principal or interest prior to the date scheduled for the payment thereof.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of April 1, 1999, by and among the Company, Melham U.S. Inc., Purico (IOM) Ltd.
and Paul F. Mack, as such agreement may be supplemented or amended.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation a
majority of whose Voting Stock shall at the time be owned, directly or
indirectly, by such Person, or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person.
"SUBSIDIARY GUARANTEE" means any guarantee of the Senior Subordinated
Securities by a Guarantor pursuant to Article XI.
"TAKE-OUT SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, including the Take-Out Senior Subordinated Debt, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, in each case issued in compliance with the terms of the
Credit Agreement as in effect on the Issue Date.
"TAKE-OUT SENIOR SUBORDINATED DEBT" means unsecured notes or debentures
of the Company (which may be guaranteed by one or more of the Guarantors on a
senior subordinated basis), subordinated to the prior payment of the Senior
Debt, that may be issued by the Company after the Issue Date solely to Refinance
the Indebtedness represented by the Senior Subordinated Notes, the Series A
Notes and the Series C Notes.
"THIRD PARTIES" means all lessees, sublessees, licensees and other users
of the Properties in the ordinary course of the Company's business and on a
temporary basis.
"THREE-MONTH LIBOR" means, for any LIBOR Period, the rate for deposits
in Dollars for a three-month period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the first day of such LIBOR Period. If such rate
does not appear on Telerate page 3750, the rate for that determination date will
be determined on the basis of the rate offered by Morgan Guaranty Trust Company
of New York at approximately 11:00 a.m., London time, on that day to prime banks
in the London interbank market for Dollar deposits for a three-month period. If
Three-Month LIBOR cannot be determined with respect to any LIBOR Period using
the foregoing methods, the rate for such Interest Period will be Three-Month
LIBOR as in effect during the preceding LIBOR Period. "Telerate Page 3750" means
the display page currently so designated on the Dow Jones Telerate Service (or
such other page as may replace that page on that service for the purpose of
displaying comparable rates or prices).
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture (except as provided in Section 9.03) until such time
as this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA.
"TOTAL LEVERAGE RATIO" means, as of any date, the ratio of (i)
Consolidated Total Debt as of such date to (ii) Consolidated Cash Flow for the
Four Quarter Period (as defined in the definition of "Consolidated Fixed Charge
Coverage Ratio") most recently ended on or prior to such date.
"TRANSFER RESTRICTED SECURITIES" means Senior Subordinated Securities
that bear or are required to bear the Restricted Securities Legend.
"TRUSTEE" means the party named as such in the introductory paragraphs
of this Indenture until a successor replaces it and, thereafter, means the
successor.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer of the Trustee assigned by the Trustee to administer this
Indenture.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America that as at the time of payment shall be legal tender for the payment of
public and private debts.
"UNRESTRICTED SUBSIDIARY" of any Person means (1) any Subsidiary of such
Person formed or acquired after the Issue Date that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the Board of
Directors of such Person in compliance with Section 4.24 of this Indenture; and
(2) any Subsidiary of an Unrestricted Subsidiary.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency) and, with respect to the Company, shall be
deemed to include the Common Stock of the Company.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any Wholly
Owned Subsidiary of such Person which, at the time of determination, is a
Restricted Subsidiary of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding Voting Stock (other than in the case of a
Subsidiary that is incorporated in a jurisdiction other than a State in the
United States or the District of Columbia, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) is owned by such Person or any Wholly Owned Subsidiary of such
Person.
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Acceleration Notice"........................ 6.02
"Affiliate Transaction"...................... 4.08
"Agent Members".............................. 2.13(a)
"Bankruptcy Law"............................. 6.01
"Change of Control Date"..................... 4.09(a)
"Change of Control Offer".................... 4.09
"Change of Control Payment Date"............. 4.09(c)
"Covenant Defeasance"........................ 8.01(c)
"CUSIP"...................................... 2.12
"custodian".................................. 6.01
"Defeasance Trust Payment"................... 10.02
"Events of Default".......................... 6.01
"Exchange Offer ............................. 2.01
"Exchange Registration Statement............. 2.01
"Guarantor Blockage Period".................. 12.02
"Guarantor Default Notice"................... 12.02
"Guaranteed Obligations...................... 11.01
"Incur"...................................... 4.03
"Indemnified Party".......................... 7.07
"Legal Defeasance"........................... 8. 01(b)
"Legal Holiday".............................. 13.08
"Net Proceeds Offer.......................... 4.06(a)
"Net Proceeds Offer Amount".................. 4.06(a)
"Net Proceeds Offer Payment Date"............ 4.06(a)
"Net Proceeds Offer Trigger Date"............ 4.06(a)
"Net Proceeds Trigger Date".................. 4.06(a)
"outstanding"................................ 8. 01(b)
"Paying Agent"............................... 2.03
"Payment Blockage Notice".................... 10.02
"Payment Blockage Period".................... 10.02
"Reference Date"............................. 4.04
"Registrar".................................. 2.03
"Restricted Payment"......................... 4.04
"Revolving Credit Commitment"................ 6.02
"Securities Register"........................ 2.06
"Surviving Entity"........................... 5.01
"Term Loan Commitment"....................... 6.02
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the United States Securities and Exchange Commission.
"indenture securities" means the Senior Subordinated Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, each Guarantor
and any other obligor on the Senior Subordinated Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them by such
definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular; and
(6) "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE SENIOR SUBORDINATED SECURITIES
SECTION 2.01 Form and Dating; Issuance. (a) The Senior
Subordinated Notes, the notation thereon relating to the Subsidiary Guarantees,
and the Trustee's certificate of authentication thereon shall be substantially
in the form of Exhibit A, which is hereby incorporated in and expressly made a
part of this Indenture. Any Roll-Over Notes, the notation thereon relating to
the Subsidiary Guarantees, and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit B, which is hereby
incorporated in and expressly made a part of this Indenture. Any Exchange Notes
or Private Exchange Notes, the notation thereon relating to the Subsidiary
Guarantees, and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit B; PROVIDED that, in the case of the
Exchange Note, such Exchange Notes shall not bear the Restricted Securities
Legend. The Senior Subordinated Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company or any Guarantor is subject, if any, or usage. Each Senior Subordinated
Security shall be dated the date of its authentication. The terms of the Senior
Subordinated Securities and the Subsidiary Guarantees set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture. The Senior Subordinated
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof.
(b) The Senior Subordinated Securities shall be represented by
certificates registered in the names of the Holders and may be represented by
one or more Global Senior Subordinated Securities. The aggregate principal
amount of any Global Senior Subordinated Security may from time to time be
increased or decreased in accordance with the provisions of this Article II by
adjustments made on the records of the Trustee as Custodian.
(c) On the Issue Date, the Company shall issue, and the Trustee
shall authenticate in accordance with Section 2.02, the Senior Subordinated
Notes in an aggregate principal amount of $60,000,000. On the Issue Date, each
Guarantor shall execute a Subsidiary Guarantee in the manner set forth in
Article XI.
(d) If the Company has not redeemed or repaid the Senior
Subordinated Notes in full on or prior to the Initial Maturity Date, the
Holders, subject to the provisions of this Section 2.01(d), on the Initial
Maturity Date shall exchange their Senior Subordinated Notes for Roll-Over Notes
in an equal aggregate principal amount and the Company shall issue (and, in the
case of the Subsidiary Guarantees, each Guarantor shall execute), and the
Trustee shall authenticate in accordance with Section 2.02, Roll-Over Notes in
an aggregate principal amount equal to the aggregate principal amount of Senior
Subordinated Notes then outstanding. The obligation of the Holders to exchange
their Senior Subordinated Notes for Roll-Over Notes is subject to the condition
that no Default or Event of Default under Section 6.01(a), (b) or (d) shall have
occurred and be continuing on the Initial Maturity Date.
(e) At such time as an "Exchange Registration Statement" (as
defined in the Registration Rights Agreement) has been declared effective by the
Commission and an "Exchange Offer" (as defined in the Registration Rights
Agreement) has been consummated as contemplated by the Registration Rights
Agreement, the Company shall issue (and, in the case of the Subsidiary
Guarantees, each Guarantor shall execute), and the Trustee shall authenticate in
accordance with Section 2.02, Exchange Notes in an aggregate principal amount
equal to the principal amount of Roll-Over Notes surrendered for exchange or
Private Exchange Notes in accordance with the Registration Rights Agreement.
SECTION 2.02 Execution and Authentication. Two Officers of the
Company shall sign the Senior Subordinated Securities by manual or facsimile
signature.
If an Officer whose signature is on a Senior Subordinated
Security no longer holds that office at the time the Trustee authenticates the
Senior Subordinated Security, the Senior Subordinated Security shall be valid
nevertheless.
A Senior Subordinated Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Senior Subordinated Security. The signature shall be
conclusive evidence that the Senior Subordinated Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
upon a written order of the Company signed by two of its Officers (1) Senior
Subordinated Notes for original issue on the Issue Date in an aggregate
principal amount of $60,000,000, (2) subject to Section 2.01(d), Roll-Over Notes
in an aggregate principal amount equal to the aggregate principal amount of
Senior Subordinated Notes then outstanding and (3) subject to Section 2.01(e),
Exchange Notes or Private Exchange Notes, as the case may be, issued upon
surrender of an equal aggregate principal amount of Roll-Over Notes in an
Exchange Offer. Such order shall specify the amount of the Senior Subordinated
Securities to be authenticated, the date on which the original issue of Senior
Subordinated Securities is to be authenticated and whether the Senior
Subordinated Securities are to be Senior Subordinated Notes, Roll-Over Notes or
Exchange Notes. The aggregate principal amount of Senior Subordinated Securities
outstanding at any time may not exceed $60,000,000, except as provided in
Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Senior Subordinated Securities.
Any such appointment shall be evidenced by an instrument signed by a Trust
Officer of the Trustee, a copy of which shall be furnished to the Company.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Senior Subordinated Securities whenever the Trustee may do so.
After any such appointment, each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An authenticating agent
has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
SECTION 2.03 Registrar and Paying Agent. The Company shall
maintain an office or agency where Senior Subordinated Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Senior Subordinated Securities may be presented for
payment (the "Paying Agent"). The Company may have one or more co-registrars and
one or more additional paying agents.
The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company may act as Paying Agent, Registrar, co-registrar or transfer agent;
PROVIDED that the Company may not act as Paying Agent for purposes of Article
III, Article VIII, and Sections 4.06 and 4.09.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Senior Subordinated Securities.
The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Senior Subordinated Securities, and
the Trustee shall initially be the Custodian with respect to the Global Senior
Subordinated Securities.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee, PROVIDED that no
such removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company
and such successor Registrar or Paying Agent, as the case may be, and delivered
to the Trustee or (2) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
not less than three Business Days' prior written notice to the Company;
PROVIDED, HOWEVER, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04 Paying Agent To Hold Money in Trust. Prior to 11:00
a.m., New York City time, on each due date of the principal and interest on any
Senior Subordinated Security, the Company shall deposit with the Paying Agent
(or if the Company is acting as Paying Agent, segregate and hold in trust for
the benefit of the Persons entitled thereto) a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Senior Subordinated Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Senior Subordinated Securities and shall notify the Trustee
in writing of any default by the Company in making any such payment within one
Business Day thereof. If the Company acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05 Senior Subordinated Securityholder Lists. The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders of Senior
Subordinated Securities. If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Senior Subordinated Securities.
SECTION 2.06 Registration of Transfer and Exchange. The Senior
Subordinated Securities shall be issued in registered form only. The Company
shall cause to be kept at the principal corporate trust office of the Trustee a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Registrar shall provide for the
registration of transfer of Senior Subordinated Securities entitled to be
transferred as herein provided or the exchange of Senior Subordinated Securities
for an equal principal amount of Senior Subordinated Securities of other
authorized denominations. To permit registration of transfers and exchanges, the
Company shall execute (and, in the case of the Subsidiary Guarantees, each
Guarantor shall execute) and the Trustee shall authenticate Senior Subordinated
Securities at the Registrar's or co-registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the Registrar may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any registration of transfer or exchange
pursuant to this Section 2.06 (other than any such taxes, assessments or other
governmental charges payable upon transfers or exchanges pursuant to Sections
2.09, 3.06, 4.09, and 9.05). The Registrar need not register transfers or
exchanges of Senior Subordinated Securities selected for redemption (except, in
the case of Senior Subordinated Securities to be redeemed in part, the portion
thereof not to be redeemed) or transfers or exchanges of any Senior Subordinated
Securities for a period of 15 days before a selection of Senior Subordinated
Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Senior Subordinated Security, the Company, each Guarantor, the Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the Person in
whose name a Senior Subordinated Security is registered as the absolute owner of
such Senior Subordinated Security for the purpose of receiving payment of
principal of and accrued and unpaid interest on such Senior Subordinated
Security and for all other purposes whatsoever, whether or not such Senior
Subordinated Security is overdue, and none of the Company, any Guarantor, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
Any Holder of a Global Senior Subordinated Security shall, by
acceptance of such Global Senior Subordinated Security, agree that transfers of
beneficial interests in such Global Senior Subordinated Security may be effected
only through the Depositary, in accordance with the provisions of this Indenture
and such Depositary's usual procedures.
All Senior Subordinated Securities issued upon any registration
of transfer or exchange pursuant to this Section 2.06 will evidence the same
debt and will be entitled to the same benefits under this Indenture as the
Senior Subordinated Securities surrendered upon such registration of transfer or
exchange.
SECTION 2.07 Replacement Senior Subordinated Securities. If a
mutilated Senior Subordinated Security is surrendered to the Registrar or if the
Holder of a Senior Subordinated Security claims that the Senior Subordinated
Security has been lost, destroyed or wrongfully taken, the Company shall issue
(and, in the case of the Subsidiary Guarantees, each Guarantor shall issue) and
the Trustee shall authenticate a replacement Senior Subordinated Security if the
Holder satisfies any reasonable requirements of the Trustee including evidence
of the destruction, loss or theft of the Senior Subordinated Security. If
required by the Trustee or the Company, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Trustee to protect the Company, the
Guarantors, the Trustee, the Paying Agent, the Registrar and any co-registrar
from any loss that any of them may suffer if a Senior Subordinated Security is
replaced. The Company and the Trustee may charge the Holder for their reasonable
out-of-pocket expenses in replacing a Senior Subordinated Security, including
the payment of a sum sufficient to cover any tax or other governmental charge
that may be required. In the event any such mutilated, lost, destroyed or
wrongfully taken Senior Subordinated Security has become or is about to become
due and payable, the Company in its discretion may pay such Senior Subordinated
Security instead of issuing a new Senior Subordinated Security in replacement
thereof.
Every replacement Senior Subordinated Security is an additional
obligation of the Company.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Senior Subordinated Securities.
SECTION 2.08 Outstanding Senior Subordinated Securities. The
Senior Subordinated Securities outstanding at any time are all Senior
Subordinated Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding. A Senior Subordinated Security does not cease
to be outstanding because the Company, any Guarantor or an Affiliate of the
Company or any Guarantor holds the Senior Subordinated Security.
If a Senior Subordinated Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee and the Company receive
proof satisfactory to them that the replaced Senior Subordinated Security is
held by a protected purchaser (as defined in Article 8 of the Uniform Commercial
Code).
If the Paying Agent (other than the Company or any Subsidiary of
the Company) segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date U.S. Legal Tender sufficient to pay all
principal and interest payable on that date with respect to the Senior
Subordinated Securities (or portions thereof) to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Holders of Senior Subordinated Securities on that date pursuant to the terms
of this Indenture, then on and after that date such Senior Subordinated
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09 Temporary Senior Subordinated Securities. Until
definitive Senior Subordinated Securities are ready for delivery, the Company
may prepare (and, in the case of the Subsidiary Guarantees, each Guarantor shall
prepare) and the Trustee shall authenticate temporary Senior Subordinated
Securities. Temporary Senior Subordinated Securities shall be substantially in
the form of definitive Senior Subordinated Securities. Without unreasonable
delay, the Company shall prepare (and, in the case of the Subsidiary Guarantees,
each Guarantor shall prepare) and the Trustee shall authenticate definitive
Senior Subordinated Securities and deliver them in exchange for temporary Senior
Subordinated Securities upon surrender of such temporary Senior Subordinated
Securities at the office or agency of the Company, without charge to the Holder.
SECTION 2.10 Cancellation. The Company at any time may deliver
Senior Subordinated Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Senior Subordinated
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Senior Subordinated Securities surrendered
for registration of transfer, exchange, payment or cancellation and dispose of
such Senior Subordinated Securities in accordance with its customary procedures,
unless the Company otherwise directs in writing to the Trustee. The Company may
not issue new Senior Subordinated Securities to replace Senior Subordinated
Securities that have been redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Senior Subordinated Securities
in place of canceled Senior Subordinated Securities other than pursuant to the
terms of this Indenture.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Senior Subordinated Securities, the Company shall pay
the defaulted interest (plus interest on such defaulted interest at the rate
then payable in respect of such Senior Subordinated Securities to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to the
Persons who are Holders of Senior Subordinated Securities on a subsequent
special record date. The Company shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Trustee and
shall promptly mail or cause to be mailed to each Holder of Senior Subordinated
Securities a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any
other lawful manner not inconsistent with the requirements (if applicable) of
any securities exchange on which the Senior Subordinated Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this paragraph, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.12 CUSIP Numbers. The Company in issuing the Senior
Subordinated Securities may use "CUSIP" numbers (if then generally in use) and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Senior Subordinated Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Senior Subordinated Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any changes in "CUSIP" numbers for the
Senior Subordinated Securities.
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities. If the Senior Subordinated Securities are issued in the form of a
Global Senior Subordinated Security, the following provisions shall apply:
(a) Each Global Senior Subordinated Security initially shall (i)
be registered in the name of the Depositary for such Global Senior
Subordinated Security or the nominee of such Depositary and (ii) be
delivered to the Trustee as the initial Custodian for such Depositary.
Beneficial interests in Global Senior Subordinated Securities may be
held indirectly through members of or participants in ("Agent Members")
the Depositary.
Agent Members shall have no rights under this Indenture with
respect to any Global Senior Subordinated Security held on their behalf
by the Depositary, or the Trustee as Custodian, or under such Global
Senior Subordinated Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Senior Subordinated Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Senior
Subordinated Security.
(b) Transfers of a Global Senior Subordinated Security shall be
limited to transfers of such Global Senior Subordinated Security in
whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Senior
Subordinated Security may be transferred in accordance with the rules
and procedures of the Depositary (and Agent Member, if applicable) and
the provisions of Section 2.14. The Trustee shall register the transfer
of Senior Subordinated Securities to all beneficial owners in exchange
for their beneficial interests in a Global Senior Subordinated Security
if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Senior Subordinated
Security or the Depositary ceases to be a clearing agency registered
under the Exchange Act, at a time when the Depositary is required to be
so registered in order to act as Depositary, and in each case a
successor Depositary is not appointed by the Company within 90 days of
such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Senior
Subordinated Security shall be so exchangeable or (iii) an Event of
Default has occurred and is continuing and the Registrar has received a
request from the Trustee or the Depositary to permit such transfers.
SECTION 2.14 Special Transfer Provisions. Unless and until a
Transfer Restricted Security is transferred or exchanged under an effective
registration statement under the Securities Act, the following provisions shall
apply:
(a) Upon the registration of transfer, exchange or replacement of
Senior Subordinated Securities not bearing the Restricted Securities
Legend, the Registrar shall deliver Senior Subordinated Securities that
do not bear the Restricted Securities Legend. Upon the registration of
transfer, exchange or replacement of Senior Subordinated Securities
bearing the Restricted Securities Legend, the Registrar shall deliver
only Senior Subordinated Securities that bear the Restricted Securities
Legend unless (i) the requested transfer is after the second anniversary
of the Issue Date (PROVIDED, HOWEVER, that neither the Company nor any
Affiliate of the Company has held any beneficial interest in such Senior
Subordinated Security, or portion thereof, at any time prior to the
second anniversary of the Issue Date) or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company
and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(b) By its acceptance of any Senior Subordinated Security bearing
the Restricted Securities Legend, each Holder of such a Senior
Subordinated Security acknowledges that transfer of such Senior
Subordinated Security may be restricted pursuant to the provisions of
the Securities Act as set forth in the Restricted Securities Legend and
agrees that it shall transfer such Senior Subordinated Security only in
a transaction that is exempt from the registration requirements of the
Securities Act.
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes. Notwithstanding any other provision of this Indenture, prior to the
Initial Maturity Date, (i) no registration of transfer of any Senior
Subordinated Note and (ii) no Lien (other than Liens contemplated by the Stock
Purchase Agreement) of any kind shall be created in or placed on any Senior
Subordinated Note, in each case without the written consent of the Company,
which consent shall not be unreasonably withheld (it being understood that
solely because any registration of transfer results in an increase in the number
of Holders of Senior Subordinated Notes to not more than eight Holders shall not
constitute reasonable grounds for withholding such consent); PROVIDED, HOWEVER,
that the registration of transfer to, and the creation of Liens in favor of,
Affiliates of such Holders shall not be prohibited by this Section 2.15.
ARTICLE III
REDEMPTION
SECTION 3.01 Notices to Trustee. If the Company elects to redeem
Senior Subordinated Securities pursuant to Section 3.07 or is required to redeem
Senior Subordinated Notes pursuant to Section 3.08, it shall notify the Trustee
in writing of the redemption date, the redemption price, the principal amount of
Senior Subordinated Securities to be redeemed and the Section of this Indenture
pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section 3.01 not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but no more than
60 days before the redemption date unless the Trustee consents to a shorter
period. Such notice shall be accompanied by an Officers' Certificate and an
Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. Any such notice may be canceled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.02 Selection. If less than all of the Senior
Subordinated Securities are to be redeemed at any time, selection of Senior
Subordinated Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Senior Subordinated Securities are listed, or, if the Senior
Subordinated Securities are not so listed, on a PRO RATA basis, by lot or by
such method as the Trustee shall deem fair and appropriate; PROVIDED that no
Senior Subordinated Security of $1,000 or less shall be redeemed in part. If any
Senior Subordinated Security is to be redeemed in part only, the notice of
redemption that relates to such Senior Subordinated Security shall state the
portion of the principal amount thereof to be redeemed. On and after the
redemption date, unless the Company defaults in making the redemption payment or
the Paying Agent is prohibited from making the redemption payment pursuant to
the terms of this Indenture, interest ceases to accrue on Senior Subordinated
Securities or portions of them called for redemption.
SECTION 3.03 Notice. Notices of redemption shall be mailed by
first class mail not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but not more than
60 days before the redemption date to each Holder of Senior Subordinated
Securities to be redeemed at its registered address. Notices of redemption may
not be conditional. The Trustee shall notify the Company promptly of the Senior
Subordinated Securities or portions of Senior Subordinated Securities to be
redeemed.
The notice shall identify the Senior Subordinated Securities to
be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Senior Subordinated Securities called for redemption
must be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Senior Subordinated
Securities are to be redeemed, the certificate numbers and principal
amounts of the particular Senior Subordinated Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Senior Subordinated
Securities (or portion thereof) called for redemption ceases to accrue
on and after the redemption date;
(7) the paragraph of the Senior Subordinated Securities or the
Section of this Indenture pursuant to which the Senior Subordinated
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Senior Subordinated
Securities being redeemed;
(9) in the case of a partial redemption, that any Holder of a
Senior Subordinated Security redeemed in part shall receive a
replacement Senior Subordinated Security in the principal amount equal
to the principal amount of the Senior Subordinated Security not so
redeemed; and
(10) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Senior Subordinated Securities.
At the Company's request (which may be revoked at any time in
writing prior to the time at which the Trustee shall have given such notice to
the Holders), the Trustee shall give the notice of redemption in the Company's
name and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section 3.03.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed, Senior Subordinated Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Senior Subordinated
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest to the redemption date; PROVIDED that if the redemption date is
after a regular record date and on or prior to the interest payment date, the
accrued interest shall be payable to the Holder of the redeemed Senior
Subordinated Securities registered on the relevant record date. If mailed in the
manner herein, the notice shall be conclusively presumed to have been given
whether or not the Holder receives such notice. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05 Deposit of Redemption Price. Prior to 11:00 a.m. New
York City time on the redemption date, the Company shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the redemption price of and accrued
interest on all Senior Subordinated Securities to be redeemed on the redemption
date other than Senior Subordinated Securities or portions of Senior
Subordinated Securities called for redemption that have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06 Senior Subordinated Securities Redeemed in Part.
Upon surrender of a Senior Subordinated Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Senior Subordinated Security equal in principal amount
to the unredeemed portion of the Senior Subordinated Security surrendered.
SECTION 3.07 Optional Redemption. The Company may at any time and
from time to time redeem the Senior Subordinated Notes, in whole or in part,
without premium (except as otherwise provided in this Section 3.07) or penalty,
at a price equal to the principal amount so to be redeemed plus all accrued and
unpaid interest. Prior to April 1, 2004, the Company may not redeem Roll-Over
Notes, Exchange Notes or Private Exchange Notes. From and after such date, the
Company may at any time and from time to time redeem the Roll-Over Notes,
Exchange Notes or Private Exchange Notes, in whole or in part, at a price equal
to the principal amount so to be redeemed multiplied by the Applicable Call
Premium, plus all accrued and unpaid interest to the date of redemption. Partial
redemptions pursuant to this Section 3.07 shall be in an aggregate principal
amount of $500,000 (in the aggregate as to all Senior Subordinated Securities)
or a whole multiple of $100,000 in excess thereof. Notwithstanding anything to
the contrary contained above, if any redemption is made pursuant to this Section
3.07 within 30 days of the occurrence of any Change of Control, the Applicable
Call Premium shall be accompanied by a redemption premium in an amount equal to
1% of the principal amount of Senior Subordinated Securities so redeemed. If any
redemption is made pursuant to this Section 3.07 without the payment of such a
redemption premium, and any Change of Control occurs within 30 days thereafter,
on the date of the occurrence of such Change of Control the premium provided in
the immediately preceding sentence shall be due and payable on such date
(notwithstanding that all other amounts pursuant to this Indenture may
theretofore have been repaid).
SECTION 3.08 Mandatory Redemption. (a) If, prior to the Initial
Maturity Date, the Company or any of its Subsidiaries shall issue any Take-Out
Securities, 100% of the Net Cash Proceeds thereof (after application of such Net
Cash Proceeds in accordance with Section 3.08(a) of the Series A Indenture and
the Series C Indenture) shall, on the date of the Company's or any such
Subsidiary's receipt thereof, be deposited with the Paying Agent, so long as,
with respect to the Take-Out Securities other than Take-Out Senior Subordinated
Debt, such deposit is permitted by the terms of the Senior Debt, including the
Credit Agreement, to be applied to redeem Senior Subordinated Notes at a price
equal to the principal amount so to be redeemed plus all accrued and unpaid
interest and any break funding fees incurred by the Holder thereof in connection
therewith, PROVIDED that the Company's failure to so deposit such amounts (and
so long as, with respect to the Take-Out Securities other than Take-Out Senior
Subordinated Debt, such deposit is permitted by the terms of the Credit
Agreement) shall constitute an Event of Default under Section 6.01(b);
(b) If the Company or any of its Restricted Subsidiaries shall
apply, or be required to apply, any Net Cash Proceeds pursuant to Section
4.06(a) to redeem Senior Subordinated Securities, such Net Cash Proceeds shall,
on the date of the Company's (or any of its Restricted Subsidiaries') receipt
thereof (or such later date as is provided in the last sentence of Section
4.06(a), to the extent relevant) be deposited with the Paying Agent (so long as
such deposit is permitted by the terms of the Credit Agreement) to be applied to
redeem such Senior Subordinated Securities.
(c) All redemptions made pursuant to the provisions of this
Section 3.08 shall be made at par. In addition, each redemption payment made
pursuant to this Section 3.08 with respect to any Senior Subordinated Securities
shall be accompanied by the payment of accrued and unpaid interest (through the
date the redemption is actually effected) on the principal amount of Senior
Subordinated Notes to be so redeemed; PROVIDED that any such redemption payment
made with respect to any Senior Subordinated Notes shall be accompanied by any
reasonable break funding fees incurred by the Holder thereof in connection
therewith. Notwithstanding anything to the contrary contained above in Section
3.08(a), the Company shall use good faith efforts to provide notices of any
mandatory redemption pursuant to Section 3.08(a) sufficiently in advance of its
receipt of the proceeds or the occurrence of the event which will require a
redemption pursuant to this Section 3.08 so that the respective mandatory
redemption may be made on the date of the Company's receipt of such proceeds.
SECTION 3.09 Senior Subordinated Securities Acquired by the
Company. Any Senior Subordinated Security redeemed or repurchased or otherwise
acquired by the Company shall be surrendered to the Trustee for cancellation.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Senior Subordinated Securities. The
Company shall promptly pay the principal of and interest on the Senior
Subordinated Securities on the dates and in the manner provided in the Senior
Subordinated Securities, in this Indenture and in the Registration Rights
Agreement. An installment of principal and interest shall be considered paid on
the date due if on such date the Trustee or the Paying Agent (but only if other
than the Company, a Guarantor or any of their respective Affiliates) holds by
11:00 a.m., New York City time, in accordance with this Indenture U.S. Legal
Tender sufficient to pay such installment and the Trustee or the Paying Agent,
as the case may be, is not prohibited from paying such money to the Holders of
Senior Subordinated Securities on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal (including
post-petition interest in an action or proceeding under any Bankruptcy Law) at
the rate specified therefor in the Senior Subordinated Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
SECTION 4.02 Reports. The Company will deliver to the Trustee,
within 15 days after the filing of the same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company will file with the Commission, to the extent
permitted, and provide the Trustee and Holders or prospective Holders (upon
request) with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
also comply with the other provisions of TIA ss. 314(a).
SECTION 4.03 Incurrence of Indebtedness. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively, "Incur") any Indebtedness (other than Permitted
Indebtedness); PROVIDED, HOWEVER, that so long as (i) no Default or Event of
Default shall have occurred and be continuing at the time of, or as a
consequence of, the Incurrence of any such Indebtedness and (ii) no Senior
Subordinated Notes are then outstanding, the Company and any Guarantor may Incur
Indebtedness (including, without limitation, Acquired Indebtedness), in each
case if on the date of the Incurrence of such Indebtedness, after giving effect
to the Incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than (x) 2.75 to 1.0 if such Indebtedness is Incurred on or
before April 1, 2001, or (y) 3.0 to 1.0 if such Indebtedness is Incurred
thereafter.
SECTION 4.04 Restricted Payments. The Company will not, and will
not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, (a) declare or pay any dividend or make any distribution (other than
(x) dividends or distributions made to the Company or any Wholly Owned
Restricted Subsidiary of the Company that is a Guarantor and (y) dividends or
distributions payable in Qualified Capital Stock of the Company or in warrants,
rights or options to purchase or acquire shares of such Qualified Capital Stock)
on or in respect of shares of Capital Stock of the Company or any Restricted
Subsidiary of the Company to holders of such Capital Stock, (b) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or any
Restricted Subsidiary of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock, (c) make any
Investment (other than Permitted Investments) or (d) make any principal payment
on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire
for value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Company or a Restricted
Subsidiary of the Company that is subordinate or junior in right of payment to
the Series A Securities, the Series C Securities, the Senior Subordinated
Securities or such Restricted Subsidiary's Subsidiary Guarantee, as the case may
be (each of the foregoing actions set forth in clauses (a), (b), (c) and (d)
being referred to as a "Restricted Payment"), if (A) any Series A Notes, Series
C Notes, or Senior Subordinated Notes are then outstanding or (B) at the time of
such Restricted Payment or immediately after giving effect thereto, (i) a
Default or an Event of Default shall have occurred and be continuing, (ii) the
Company is not able to Incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with the provisions of Section 4.03
or (iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Issue Date (the amount expended for
such purposes, if other than cash, being the fair market value of such property
as determined reasonably and in good faith by the Board of Directors of the
Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net
Earnings (or, if cumulative Consolidated Net Earnings shall be a loss, minus
100% of such loss) of the Company earned subsequent to the Issue Date through
the last day of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (the "Reference Date"), treating such period as a single accounting
period; plus (x) 100% of the aggregate net cash proceeds received by the Company
from any Person (other than a Restricted Subsidiary of the Company) from the
issuance and sale subsequent to the Issue Date and on or prior to the Reference
Date of Qualified Capital Stock of the Company plus (y) to the extent not
otherwise included in the Company's Consolidated Net Earnings, in the case of
the disposition or repayment of any Investment constituting a Restricted Payment
made after the Issue Date, an amount equal to the lesser of (A) the cash return
of capital with respect to such Investment and (B) the initial amount of such
Investment, in either case, less the cost of the disposition of such Investment;
plus (z) without duplication of any amounts included in clause (iii)(x) above,
100% of the aggregate net cash proceeds of any equity contribution received by
the Company from a holder of the Company's Capital Stock.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
within 60 days after the date of declaration of such dividend if such dividend
would have been permitted on the date of declaration; (2) if no Default or Event
of Default shall have occurred and be continuing, the redemption, repurchase or
other acquisition or retirement of any shares of Capital Stock of the Company,
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company or (ii) through the application (within 60 days after the sale thereof)
of the net cash proceeds of a sale for cash (other than to a Restricted
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any Indebtedness of
the Company or any Guarantor that is subordinate or junior in right of payment
to the Senior Subordinated Securities or such Guarantor's Subsidiary Guarantee,
as the case may be, either (i) solely in exchange for shares of Qualified
Capital Stock of the Company or warrants, rights or options to purchase or
acquire shares of Qualified Capital Stock of the Company or (ii) through the
application (within 60 days of the sale thereof) of net proceeds of a sale for
cash (other than to a Restricted Subsidiary of the Company) of (A) shares of
Qualified Capital Stock of the Company or (B) Refinancing Indebtedness; (4) if
no Default or Event of Default shall have occurred and be continuing,
repurchases by the Company of Common Stock of the Company pursuant to repurchase
options in stock option agreements between the Company and employees of the
Company and any of its Subsidiaries from such employees or their authorized
representatives upon the death, disability or termination of employment of such
employees, in the aggregate not to exceed $250,000 in any calendar year, and (5)
the declaration and payment, consistent with past practice, of dividends on
shares of the Company's Common Stock to holders of such Common Stock if, at the
time of such payment and immediately after giving effect thereto, (x) no Default
or Event of Default shall have occurred and be continuing and (y) the Company is
able to Incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with the provisions of Section 4.03. In determining
the aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the first paragraph of this Section 4.04,
amounts expended pursuant to clauses (1), (2)(ii) ,and (4) and (5) of this
paragraph shall be included in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances, or pay any Indebtedness or other obligation owed, to the Company or
any other Restricted Subsidiary of the Company; or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture, the Senior Subordinated
Securities and the Subsidiary Guarantees; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary of the Company; (4) any agreement governing Acquired
Indebtedness, but only if such encumbrance or restriction shall not apply to any
Person, or the assets of any Person, other than the Person, or the assets of the
Person, so acquired; (5) agreements existing on the Issue Date, to the extent
and in the manner such agreements are in effect on the Issue Date; (6) the
Credit Agreement; (7) any instrument governing a Permitted Lien, to the extent
and only to the extent such instrument restricts the transfer or other
disposition of assets subject to such Permitted Lien; (8) any contract for the
sale of specified assets, including, without limitation, any restriction with
respect to a Restricted Subsidiary of the Company imposed pursuant to any
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary, to be consummated
in accordance with the terms of this Indenture, pending the closing of such sale
or disposition; PROVIDED that any such restriction relates solely to the Capital
Stock or assets that are the subject of such agreement; (9) Indebtedness or
other contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction or the charter documents of such
Securitization Entity; PROVIDED that, in any case, such restrictions apply only
to such Securitization Entity; and (10) any agreement governing Indebtedness
Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to
an agreement referred to in clause (2), (4), (5) or (6) above; PROVIDED,
HOWEVER, that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are not materially more restrictive, as
determined by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, in their reasonable and good faith judgment,
than the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4), (5) or (6).
SECTION 4.06 Asset Sales. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Company or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined
reasonably and in good faith by the Company's Board of Directors), (ii) at least
80% of the consideration received by the Company or such Restricted Subsidiary,
as the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition and (iii) upon the
consummation of an Asset Sale, the Company applies, or causes such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
270 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor
Senior Debt (and, in the case of Senior Debt or Guarantor Senior Debt under any
revolving credit facility, including the Credit Agreement, effect a
corresponding permanent reduction in the availability under such revolving
credit facility), (B) to reinvest in Productive Assets, or (C) a combination of
prepayment and investment permitted by the foregoing clauses (iii)(A) and
(iii)(B). On the 271st day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (iii)(A), (iii)(B) or (iii)(C) of the preceding sentence (each,
a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in such clauses (iii)(A), (iii)(B) and (iii)(C) (each a "Net Proceeds
Offer Amount") shall be applied by the Company or such Restricted Subsidiary, as
the case may be, to make an offer to purchase (the "Net Proceeds Offer") on a
date (the "Net Proceeds Offer Payment Date") not less than 20 Business Days nor
more than 30 Business Days following the date on which the notice of such Net
Proceeds Offer is mailed to the Holders, from all Holders on a PRO RATA basis,
that principal amount of Senior Subordinated Securities equal to the Net
Proceeds Offer Amount at a price equal to 100% of the principal amount of the
Senior Subordinated Securities to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase; PROVIDED, HOWEVER, that if at any time
any non-cash consideration received by the Company or any Restricted Subsidiary
of the Company, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.06.
Notwithstanding the foregoing, the Company may defer the Net Proceeds Offer
until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in
excess of $5.0 million resulting from one or more Asset Sales (at which time,
the entire unutilized Net Proceeds Offer Amount, and not just the amount in
excess of $5.0 million, shall be applied as required pursuant to this
paragraph). Upon completion of a Net Proceeds Offer, the amount of Net Cash
Proceeds and the amount of aggregate unutilized Net Proceeds Offer Amount will
be reset to zero. To the extent that any Net Proceeds remain after the
consummation of a Net Proceeds Offer, the Company or any Restricted Subsidiary
of the Company, as the case may be, may use such Net Proceeds for any purposes
not prohibited by this Indenture. Notwithstanding the provisions of this Section
4.06(a), the Company shall not make a Net Proceeds Offer if the Company is
prohibited from doing so under the terms of the Credit Agreement, PROVIDED that
the Company's failure to comply with the covenant in this Section 4.06(a) shall
constitute an Event of Default described in clause (b) under Section 6.01.
(b) In the event of the transfer of substantially all (but not
all) of the property and assets of the Company and its Restricted Subsidiaries
as an entirety to a Person in a transaction permitted by Section 5.01, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed for purposes of this Section 4.06 to have sold the properties
and assets of the Company and its Restricted Subsidiaries not so transferred,
and shall comply with the provisions of this Section 4.06 with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market value of
such properties and assets of the Company or its Restricted Subsidiaries deemed
to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section
4.06.
(c) Notwithstanding the provisions of Section 4.06(a), the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraph to the extent that (i) at least 80%
of the consideration for such Asset Sale constitutes Productive Assets and (ii)
such Asset Sale is for fair market value; PROVIDED that any consideration
consisting of cash or Cash Equivalents received by the Company or any of its
Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds subject to
the provisions of Section 4.06(a).
(d) Each notice of a Net Proceeds Offer pursuant to this Section
4.06 shall be mailed or caused to be mailed, by first class mail, by the Company
not more than 25 days after the Net Proceeds Offer Trigger Date to all Holders
at their last registered addresses as of a date within 15 days of the mailing of
such notice, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Subordinated
Securities pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.06 and that all Senior Subordinated Securities tendered will
be accepted for payment; PROVIDED, HOWEVER, that if the aggregate
principal amount of Senior Subordinated Securities tendered in a Net
Proceeds Offer at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, the Company shall select the Senior
Subordinated Securities to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Senior Subordinated Securities in denominations of $1,000 or multiples
thereof shall be purchased);
(ii) the Net Proceeds Offer Amount, the purchase price (including
the amount of accrued interest) and the Net Proceeds Offer Payment Date;
PROVIDED that the Net Proceeds Offer Payment Date for the Senior
Subordinated Securities shall be a date subsequent to any payment dates
for the purchase or other repayment of Senior Debt having similar
provisions;
(iii) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(iv) that unless the Company defaults in making payment therefor,
any Senior Subordinated Securities accepted for payment pursuant to the
Net Proceeds Offer shall cease to accrue interest after the Net Proceeds
Offer Payment Date;
(v) that Holders electing to have Senior Subordinated Securities
purchased pursuant to a Net Proceeds Offer will be required to surrender
the Senior Subordinated Securities, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day prior to
the Net Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
fifth Business Day prior to the Net Proceeds Offer Payment Date, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Senior Subordinated Security purchased;
(vii) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior Subordinated Securities
in a principal amount equal to the unpurchased portion of the Senior
Subordinated Securities surrendered; PROVIDED that each Senior
Subordinated Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount of $1,000 or
integral multiples thereof;
(viii) the calculations used in determining the amount of the Net
Proceeds Offer Amount to be applied to the purchase of the Senior
Subordinated Securities;
(ix) any other procedures that a Holder must follow to accept the
Net Proceeds Offer; and
(x) the name and address of the Paying Agent.
On or before the Net Proceeds Offer Payment Date, the Company
shall (i) accept for payment Senior Subordinated Securities or portions thereof
tendered pursuant to the Net Proceeds Offer which are to be purchased in
accordance with item (d)(i) above, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of, plus accrued interest, if any,
on, all Senior Subordinated Securities to be purchased or portions thereof and
(iii) deliver to the Trustee Senior Subordinated Securities so accepted together
with an Officers' Certificate stating that the Senior Subordinated Securities or
portions thereof were accepted by the Company for payment in accordance with the
terms of this Section 4.06. The Paying Agent shall promptly (but in any case not
later than five Business Days after the Net Proceeds Offer Payment Date) mail or
deliver to each Holder of Senior Subordinated Securities so accepted payment in
an amount equal to the purchase price plus accrued interest, if any, and the
Company shall promptly execute and issue New Senior Subordinated Securities, and
the Trustee shall promptly authenticate and mail or deliver to each Holder such
new Senior Subordinated Securities equal in principal amount to any unpurchased
portion of the Senior Subordinated Securities surrendered. For purposes of this
Section 4.06, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Net Proceeds Offer shall be returned by the Paying
Agent to the Company.
(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 Senior Subordinated Securities pursuant to a Net Proceeds Offer.
To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 4.06, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.06 by virtue thereof
SECTION 4.07 Maximum Total Leverage Ratio. So long as any Senior
Subordinated Note is outstanding, the Company shall not suffer or permit the
Total Leverage Ratio at any time during each period set forth in the chart below
to exceed the applicable ratio set forth opposite such period.
Fiscal Quarter Ending During the Period: Total Leverage Ratio:
---------------------------------------- ---------------------
Issue Date through 6/30/00 4.75 to 1.00
7/1/00 through 6/30/01 4.25 to 1.00
7/1/01 through 6/30/02 4.0 to 1.00
7/1/02 and thereafter 3.5 to 1.00
SECTION 4.08 Transactions with Affiliates. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to occur any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
the guaranteeing of any Indebtedness or the rendering of any service) with, or
for the benefit of, any of their respective Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under Section
4.08(b) and (y) Affiliate Transactions on terms that are no less favorable to
the Company or such Restricted Subsidiary, as the case may be, than those that
could reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate of the Company or
such Restricted Subsidiary, as the case may be. All Affiliate Transactions (and
each series of related Affiliate Transactions which are similar or part of a
common plan) involving aggregate payments or other property with a fair market
value in excess of $1.0 million shall be approved by the Board of Directors of
the Company or such Restricted Subsidiary, as the case may be, such approval to
be evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Restricted Subsidiary of the Company enters into an Affiliate
Transaction (or a series of related Affiliate Transactions which are similar or
part of a common plan) that involves aggregate payments or other property with a
fair market value in excess of $10.0 million, the Company or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Restricted Subsidiary, as the case
may be, from a financial point of view, from an Independent Financial Advisor
and file the same with the Trustee.
(b) The restrictions set forth in Section 4.08(a) shall not apply
to (i) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company as determined reasonably and in good faith
by the Board of Directors or senior management of the Company or such Restricted
Subsidiary, as the case may be; (ii) transactions exclusively between or among
the Company and any of its Wholly Owned Restricted Subsidiaries or exclusively
between or among such Wholly Owned Restricted Subsidiaries; PROVIDED that such
transactions are not otherwise prohibited by this Indenture; (iii) Restricted
Payments permitted by this Indenture; (iv) transactions effected as part of a
Qualified Securitization Transaction; and (v) any agreement as in effect as of
the Issue Date or any amendment thereto and any transaction contemplated thereby
(including pursuant to any amendment) or 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 4.09 Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder will have the right to require that the Company
purchase all or a portion of such Holder's Senior Subordinated Securities
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in
any event within 30 days following any Change of Control, the Company will (i)
repay in full and terminate all commitments under the Credit Agreement and all
other Senior Debt the terms of which require repayment upon a Change of Control
or offer to repay in full and terminate all commitments under the Credit
Agreement and all other such Senior Debt and to repay the Indebtedness owed to
each lender which has accepted such offer or (ii) obtain the requisite consents
under the Credit Agreement and all other Senior Debt to permit the repurchase of
the Senior Subordinated Securities as provided below. The Company must first
comply with the covenant described in the preceding sentence before it shall be
required to repurchase Senior Subordinated Securities in the event of a Change
of Control; provided that the Company's failure to comply with the covenant
described in the preceding sentence shall constitute an Event of Default
described in clause (c) and not in clause (b) under Section 6.01.
(c) Within 30 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company will send, by first
class mail, a notice to each Holder, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Senior Subordinated Securities pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.09 and that all Senior Subordinated
Securities tendered and not withdrawn will be accepted for
payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier
than 20 Business Days nor later than 30 Business Days from
the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
PROVIDED that the Change of Control Payment Date for the
Senior Subordinated Securities shall be a date subsequent
to any payment dates for the purchase or other repayment
of Senior Debt having similar provisions;
(3) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(4) that, unless the Company defaults in making payment
therefor, any Senior Subordinated Securities accepted for
payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have a Senior Subordinated
Security purchased pursuant to a Change of Control Offer
will be required to surrender the Senior Subordinated
Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control
Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of
business on the fifth Business Day prior to the Change of
Control Payment Date, a telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Senior Subordinated
Securities purchased;
(7) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior
Subordinated Securities in a principal amount equal to the
unpurchased portion of the Senior Subordinated Securities
surrendered; PROVIDED that each Senior Subordinated
Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof;
(8) the circumstances and relevant facts regarding such Change
of Control;
(9) any other procedures that a Holder must follow to accept
the Change of Control Offer; and
(10) the name and address of the Paying Agent.
On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Senior Subordinated Securities or portions thereof
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the purchase price of, plus accrued
and unpaid interest, if any, on, all Senior Subordinated Securities so tendered
and (iii) deliver to the Trustee Senior Subordinated Securities so accepted
together with an Officers' Certificate stating that the Senior Subordinated
Securities or portions thereof were accepted by the Company for payment in
accordance with the terms of this Section 4.09. The Paying Agent shall promptly
(but in any case not later than five Business Days after the Change of Control
Payment Date) mail or deliver to each Holder of Senior Subordinated Securities
so accepted payment in an amount equal to the purchase price plus accrued and
unpaid interest, if any, and the Company shall promptly execute and issue new
Senior Subordinated Securities, and the Trustee shall promptly authenticate and
mail or deliver to each Holder new Senior Subordinated Securities equal in
principal amount to any unpurchased portion of the Senior Subordinated
Securities surrendered. Any Senior Subordinated Securities not so accepted shall
be promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.09, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Change of Control Offer shall be returned by the Paying
Agent to the Company.
(d)(A) If the Company or any Restricted Subsidiary thereof has
issued any outstanding (i) Indebtedness that is subordinated in right of payment
to the Senior Subordinated Securities or (ii) Preferred Stock, and the Company
or such Restricted Subsidiary is required to make an offer to purchase or 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 purchase
price in full to the Holders of Senior Subordinated Securities that have
accepted the Company's Change of Control Offer and shall otherwise have
consummated the Change of Control Offer made to Holders of the Senior
Subordinated Securities and (B) the Company shall not issue Indebtedness that is
subordinated in right of payment to the Senior Subordinated Securities or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Senior Subordinated
Securities in the event of a Change in Control under this Indenture.
(e) Neither the Board of Directors of the Company nor the Trustee
may waive the provisions of this Section 4.09 relating to a Holder's right to
redemption upon a Change of Control. 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 Senior Subordinated Securities
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.09, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
provisions of this Section 4.09 by virtue thereof.
SECTION 4.10 Compliance Certificate. The Company and each
Guarantor shall deliver to the Trustee within 90 days after the end of each
fiscal year of the Company an Officers' Certificate (one of the signers of which
shall be the principal executive officer, principal financial officer or
principal accounting officer of such Person) stating that a review of the
activities of the Company and its Subsidiaries has been made under the
supervision of the signing Officers with a view to determining whether the
Company and its Subsidiaries have kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each Officer
signing such certificate, that to the best of his or her knowledge the Company
and its Subsidiaries have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and are 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 such Default 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 Senior
Subordinated Securities are prohibited or if such event has occurred, a
description of the event and what action the Company and its Subsidiaries are
taking or propose to take with respect thereto.
SECTION 4.11 Maintenance of Properties and Insurance . (a)
Subject to Article V, the Company shall cause all material properties owned by
or leased to it or any of its Subsidiaries and used or useful in the conduct of
its 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 equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section 4.11 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 such Subsidiary
concerned, or of an Officer (or other agent employed by the Company or of any
such Subsidiary) of the Company or such Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any such Subsidiary of the Company, and if such discontinuance
or disposal is not adverse in any material respect to the Holders.
(b) The Company will maintain, and will cause each of its
Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary's own name), with responsible carriers, insurance 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 or
similar size, including property and casualty loss, workers' compensation, and
interruption of business insurance, and as otherwise may be necessary in the
judgment of the Company.
SECTION 4.12 Limitation on Liens. Other than Permitted Liens, the
Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, Incur, assume or permit or
suffer to exist any Liens of any kind against or upon any property or assets of
the Company or any of its Restricted Subsidiaries whether owned on the Issue
Date or acquired after the Issue Date, or any proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom unless (i) in
the case of Liens securing Indebtedness that is expressly subordinate or junior
in right of payment to the Senior Subordinated Securities, the Senior
Subordinated Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens at least to the same extent
that the Senior Subordinated Securities are senior in priority to such
Indebtedness and (ii) in all other cases, the Senior Subordinated Securities are
equally and ratably secured.
SECTION 4.13 Additional Subsidiary Guarantees. If the Company or
any of its Restricted Subsidiaries transfers or causes to be transferred, in one
transaction or a series of related transactions, any property to any Domestic
Restricted Subsidiary that is not a Guarantor, or if the Company or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in or hold
an Investment in a Domestic Restricted Subsidiary that is not a Guarantor having
total consolidated assets, with a book value in excess of $2.0 million, then
such transferee or acquired or other Domestic Restricted Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture
in form satisfactory to the Trustee pursuant to which such Domestic
Restricted Subsidiary shall unconditionally guarantee all of the
Company's Obligations under the Senior Subordinated Securities and this
Indenture on the terms set forth in this Indenture; and
(2) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered
by such Domestic Restricted Subsidiary and constitutes a legal, valid,
binding and enforceable obligation of such Domestic Restricted
Subsidiary;
PROVIDED, HOWEVER, that notwithstanding the foregoing, each transferee or
acquired Domestic Restricted Subsidiary or other Domestic Restricted Subsidiary
organized by the Company or any of its Restricted Subsidiaries or in which the
Company or any of its Restricted Subsidiaries shall invest or hold an Investment
shall comply with clauses (1) and (2) above if such Domestic Restricted
Subsidiary, together with the Company's other Restricted Subsidiaries that are
not Guarantors, after giving PRO FORMA effect to such transfer, organization,
acquisition or Investment, would constitute a Significant Subsidiary of the
Company (using 5.0%, rather than 10.0%, for purposes of such calculation).
Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for
all purposes of this Indenture.
SECTION 4.14 No Layering. The Company will not, and will not
permit any Guarantor to, Incur or suffer to exist Indebtedness that is senior in
right of payment to the Senior Subordinated Securities or such Guarantor's
Subsidiary Guarantee, as the case may be, and subordinated in right of payment
to any other Indebtedness of the Company or such Guarantor's Subsidiary
Guarantee, as the case may be.
SECTION 4.15 Capital Expenditures. So long as any Senior
Subordinated Note is outstanding, the aggregate amount of all Capital
Expenditures Incurred after the Issue Date will not exceed in the aggregate in
any fiscal year of the Company the sum of $30.0 million; PROVIDED that after
giving effect to the Incurrence of any Capital Expenditures permitted by this
Section 4.15, no Default or Event of Default shall have occurred and be
continuing.
SECTION 4.16 Conduct of Business. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, engage in any businesses
other than a Permitted Business.
SECTION 4.17 Environmental Matters. So long as any Senior
Subordinated Note is outstanding, the Company and its Subsidiaries will not, and
will not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for: (1)
Hazardous Materials such as inks, other chemicals used in printing operations,
cleaning solvents, pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed, managed
or otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements; and (2) the trichloroethylene that is
being remediated at the property commonly known as 3575 Hempland Road,
Lancaster, Pennsylvania.
SECTION 4.18 Environmental Release. So long as any Senior
Subordinated Note is outstanding, the Company agrees that upon the occurrence of
an Environmental Release at or on any of the Properties it will act immediately
to investigate the extent of, and to take appropriate remedial action to
eliminate, such Environmental Release, whether or not ordered or otherwise
directed to do so by any Environmental Authority.
SECTION 4.19 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 are
not in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
SECTION 4.20 Payment of Taxes and Other Claims. The Company
shall, and shall cause each of its Subsidiaries to, pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (1) all material
taxes, assessments and governmental charges levied or imposed upon the Company
or any such Subsidiary or upon the income, profits or property of the Company or
any such Subsidiary and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the property, of the Company or any such Subsidiary; PROVIDED,
HOWEVER, that neither the Company nor any of its Subsidiaries shall 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 and for which appropriate provision has
been made.
SECTION 4.21 Notice of Defaults. Upon becoming aware of any
Default or Event of Default, the Company shall promptly deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default, and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.22 Waiver of Stay, Extension or Usury Laws. Each of the
Company and the Guarantors covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company or such
Guarantor from paying all or any portion of the principal of, premium, if any,
and/or interest on the Senior Subordinated Securities 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 and each Guarantor hereby expressly waive all
benefit or advantage of any such law, and covenant that they shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries. The
Company will not cause or permit any of its Restricted Subsidiaries to issue to
any Person (other than to the Company or to a Wholly Owned Restricted Subsidiary
of the Company) any Preferred Stock or permit any Person (other than the Company
or a Wholly Owned Restricted Subsidiary of the Company) to own any Preferred
Stock of any Restricted Subsidiary of the Company.
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries. The Board of Directors of the Company may designate an
Unrestricted Subsidiary of the Company to be a Restricted Subsidiary of the
Company under this Indenture only if: (1) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation; (2) any such designation shall be deemed to be an Incurrence as of
the date of such designation by a Restricted Subsidiary of the Company of the
Indebtedness (if any) of such designated Subsidiary of the Company for purposes
of Section 4.03; and (3) immediately after giving effect to such designation and
the Incurrence of such additional Indebtedness, the Company is able to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.03.
The Board of Directors of the Company may designate any
Restricted Subsidiary of the Company (other than a Guarantor) to be an
Unrestricted Subsidiary of the Company under this Indenture only if: (1) no
Default or Event of Default shall have occurred and be continuing at the time of
or after giving effect to such designation; (2) such designation is at that time
permitted pursuant to Section 4.04 (other than pursuant to clause (viii) of the
definition of Permitted Investments); and (3) immediately after giving effect to
such designation, the Company is able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.03.
Any such designation by the Board of Directors of the Company of
an Unrestricted Subsidiary to be a Restricted Subsidiary or of a Restricted
Subsidiary to be an Unrestricted Subsidiary shall be evidenced to the Trustee by
the filing with the Trustee of a Board Resolution of the Company giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and setting forth in
reasonable detail the underlying calculations.
For purposes of Section 4.04: (1) an Investment shall be deemed
to have been made at the time any Restricted Subsidiary of the Company is
designated to be an Unrestricted Subsidiary of the Company in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to the
net worth of such Restricted Subsidiary at the time that such Restricted
Subsidiary is designated to be an Unrestricted Subsidiary; (2) at any date the
aggregate amount of all Restricted Payments made as Investments since the Issue
Date shall exclude and be reduced by an amount (proportionate to the Company's
equity interest in such Subsidiary) equal to the net worth of any Unrestricted
Subsidiary of the Company at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary of the Company, not to exceed, in the case of
any such designation of an Unrestricted Subsidiary of the Company as a
Restricted Subsidiary of the Company, the amount of Investments previously made
by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary
(in the case of each of clauses (1) and (2), "net worth" shall be calculated
based upon the fair market value of the assets of such Subsidiary as of any such
date of designation); and (3) any property transferred to or from an
Unrestricted Subsidiary of the Company shall be valued at its fair market value
at the time of such transfer.
Notwithstanding the foregoing, the Board of Directors of the
Company may not designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary of the Company if, after such designation: (1) the
Company or any of its Restricted Subsidiaries (x) provides credit support for,
or a guarantee of, any Indebtedness of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (y) is
directly or indirectly liable for any Indebtedness of such Restricted
Subsidiary; (2) a default with respect to any Indebtedness of such Subsidiary
(including any right which the holders thereof may have to take enforcement
action against such Restricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its final stated
maturity; or (3) such Subsidiary owns any Capital Stock of, or owns or holds any
Lien on any property of, any Restricted Subsidiary which is not a Subsidiary of
the Subsidiary to be so designated.
Subsidiaries of the Company that are not designated by the Board
of Directors of the Company as Restricted or Unrestricted Subsidiaries will be
deemed to be Restricted Subsidiaries.
SECTION 4.25 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where (a) Senior Subordinated Securities may be presented or surrendered for
registration of transfer or for exchange, (b) Senior Subordinated Securities may
be presented or surrendered for payment and (c) notices and demands in respect
of the Senior Subordinated Securities 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 to or served on the Trustee, c/o Wilmington
Trust FSB, 520 Madison Avenue, 33rd Floor, New York, New York 10022. The Company
hereby initially designates the Trustee at its address c/o Wilmington Trust FSB,
520 Madison Avenue, 33rd Floor, New York, New York 10022 as its office or agency
in the Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.26 Corporate Existence. Except as otherwise permitted
by Article V, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Restricted Subsidiaries
in accordance with the respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and each of its Restricted Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right, licenses and
franchises or corporate existence 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 Restricted Subsidiaries, taken as a whole,
and that the loss thereof is not, and will not be, adverse in any material
respect to the Holders.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01 Merger, Consolidation or Sale of All or
Substantially All Assets of the Company. (a) The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or into
any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or
cause or permit any Restricted Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and the
Company's Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless: (i) either (1) the Company shall be the surviving
or continuing corporation or (2) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other disposition
the properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be
a corporation organized and validly existing under the laws of the United States
or any State thereof or the District of Columbia and (y) shall expressly assume,
by supplemental indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual payment of the
principal of and interest on all of the Senior Subordinated Securities and the
performance of every covenant of the Senior Subordinated Securities, this
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such transaction
and the assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to
be Incurred in connection with or in respect of such transaction), the Company
or such Surviving Entity, as the case may be, (x) shall have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction and (y) shall be able to Incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with the provisions of Section 4.03 of this Indenture; (iii)
immediately before and immediately after giving effect to such transaction and
the assumption contemplated by clause (i)(2)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be
Incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; (iv) each Guarantor, unless it is the other party to the
transactions described above, shall have by supplemental indenture to this
Indenture confirmed that its Guarantee of the Senior Subordinated Securities
shall apply to such Person's obligations under this Indenture and the Senior
Subordinated Securities; and (v) the Company or the Surviving Entity, as the
case may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
For purposes of this Section 5.01(a), the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(b) Upon any consolidation, combination or merger or any transfer
of all or substantially all of the assets of the Company in accordance with the
provisions of Section 5.01(a), in which the Company is not the continuing
corporation, the Surviving Entity formed by such consolidation or into which the
Company is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture and the Senior Subordinated Securities with the
same effect as if such Surviving Entity had been named as such.
SECTION 5.02 Merger or Consolidation of a Guarantor. No Guarantor
(other than a Guarantor whose Subsidiary Guarantee is to be released in
accordance with Section 11.05 of this Indenture) may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
Person (other than the Company or another Guarantor) unless:
(i) the Person formed by or surviving such consolidation or merger
(if other than the Guarantor) shall be a corporation organized and
validly existing under the laws of the United States or any State
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of
such Guarantor under its Subsidiary Guarantee and this Indenture
pursuant to a supplemental indenture in form and substance satisfactory
to the Trustee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iv) the Guarantor or such Surviving Entity, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the
Guarantor's Consolidated Net Worth immediately prior to such
transaction;
(v) immediately after giving effect to such transaction, the
Company could satisfy the provisions of Section 5.01(a)(ii) of this
Indenture; and
(vi) the Person formed by or surviving such consolidation or merger
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation or merger and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the applicable
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.
Notwithstanding the foregoing clauses (iii), (iv) and (v) above,
any Guarantor may consolidate with or merge with or into the Company (with the
Company being the surviving entity) or any other Guarantor.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default and Remedies. The following events
are "Events of Default":
(a) the failure to pay interest on any Senior Subordinated
Securities when the same becomes due and payable and such default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the provisions of Article X or XII);
(b) the failure to pay the principal on any Senior Subordinated
Securities when such principal becomes due and payable, at maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Senior Subordinated Securities tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer) (whether or not such payment
shall be prohibited by the provisions of Article X or XII);
(c) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 30 days after written notice specifying the
default (and demanding that such default be remedied) is furnished to
the Company by the Trustee or to the Company and the Trustee by the
Holders of least 25% of the outstanding principal amount of the Senior
Subordinated Securities (except in the case of a default with respect to
the provisions of Article V, which will constitute an Event of Default
with such notice requirement but without such passage of time
requirement);
(d) the failure to pay at final stated maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal
amount of the any of the Junior Subordinated Notes or any other
Indebtedness of the Company or any Restricted Subsidiary of the Company
(other than a Securitization Entity), or the acceleration of the final
stated maturity of any of the Junior Subordinated Notes or any such
other Indebtedness (which acceleration is not rescinded, annulled or
otherwise cured within 20 days after receipt by the Company or such
Restricted Subsidiary of notice of any such acceleration), if, in the
case of any such other Indebtedness, the aggregate principal amount of
such Indebtedness, together with the principal amount of any other
Indebtedness in default for failure to pay principal at final maturity
or which has been accelerated, aggregate $10.0 million or more at any
time;
(e) one or more judgments in an aggregate amount in excess of
$10.0 million (which are not covered by third party insurance as to
which the insurer has not disclaimed coverage) shall have been rendered
against the Company or any of its Restricted Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 60
days after such judgment or judgments become final and non-appealable;
or
(f) the Company or any Subsidiary of the Company that is a
Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law: (A) commences a voluntary case or proceeding; (B)
consents to the entry of an order for relief against it in an
involuntary case or proceeding; (C) consents to the appointment of a
custodian of it or for any substantial part of its property; (D) makes a
general assignment for the benefit of its creditors, takes any
comparable action under any foreign laws relating to insolvency or any
of them takes any 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 Subsidiary of the Company that is a Significant Subsidiary in an
involuntary case or proceeding; (B) appoints a custodian of the Company
or any Subsidiary of the Company that is a Significant Subsidiary or for
any substantial part of its property; (C) orders the winding up or
liquidation of the Company or any Subsidiary of the Company that is a
Significant Subsidiary; or (D) any similar relief is granted under any
foreign laws and, in each case, the order or decree relating thereto
remains unstayed and in effect for 60 days; and
(h) any Subsidiary Guarantee of a Subsidiary of the Company that
is a Significant Subsidiary ceases to be in full force and effect or any
Subsidiary Guarantee of a Subsidiary of the Company that is a
Significant Subsidiary is declared to be null and void and unenforceable
or any Subsidiary Guarantee of a Subsidiary of the Company that is a
Significant Subsidiary is found to be invalid or any Guarantor that is a
Significant Subsidiary of the Company denies its liability under its
Subsidiary Guarantee (other than by reason of release of a Guarantor in
accordance with Section 11.05 of this Indenture).
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar federal or state law for the relief of debtors. For purposes of this
Article VI only, the term "custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, or similar official under any Bankruptcy Law.
SECTION 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(f) or (g) with respect to the Company
or a Guarantor) shall occur and be continuing, the Trustee or the Holders of at
least 25% in principal amount of outstanding Senior Subordinated Securities may,
and the Trustee upon the request of the Holders of at least 25% in principal
amount of outstanding Senior Subordinated Securities shall, declare the
principal of, premium, if any, and accrued and unpaid interest on all the
outstanding Senior Subordinated Securities to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under the Credit Agreement or any "Revolving Credit
Commitment" or "Term Loan Commitment" (as each such term is defined in the
Credit Agreement) is in effect, shall become immediately due and payable upon
the first to occur of an acceleration under the Credit Agreement or five
Business Days after receipt by the Company and the Representative under the
Credit Agreement of such Acceleration Notice but only if such Event of Default
is then continuing. If an Event of Default specified in Section 6.01(f) or (g)
with respect to the Company or a Guarantor occurs and is continuing, then all
unpaid principal of, premium, if any, and accrued and unpaid interest on all of
the outstanding Senior Subordinated Securities shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration with respect to
the Senior Subordinated Securities as described in the preceding paragraph, the
Holders of a majority in principal amount of Senior Subordinated Securities may
rescind and cancel such declaration and its consequences (i) if the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and all
other amounts due pursuant to Section 7.07 and (v) in the event of the cure or
waiver of an Event of Default of the type described in Section 6.01(f) or (g)
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.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Senior Subordinated Securities or to enforce
the performance of any provision of the Senior Subordinated Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Subordinated Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of Senior
Subordinated Securities in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults. Subject to Section 6.02,
the Holders of a majority in aggregate principal amount of the Senior
Subordinated Securities then outstanding by written notice to the Trustee may on
behalf of the Holders of all of the Senior Subordinated Securities waive any
existing Default or Event of Default and its consequences except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the Senior Subordinated Securities. When a Default is waived, it is deemed cured
and ceases to exist and any Event of Default arising therefrom shall be deemed
to have been cured and waived for every purpose under this Indenture, but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any consequent right.
SECTION 6.05 Control by Majority. Subject to Section 13.06, the
Holders of a majority in aggregate principal amount of the outstanding Senior
Subordinated Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee by this Indenture. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders of Senior Subordinated Securities, it being
understood that subject to Section 7.01 the Trustee shall have no duty or
obligation to determine whether or not such actions or forbearances are unduly
prejudicial to such Holders, or would involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06 Limitation on Suits. Except to enforce the right to
receive payment of principal or interest when due, a Holder of Senior
Subordinated Securities may not pursue any remedy with respect to this Indenture
or the Senior Subordinated Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Senior Subordinated Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of
the Senior Subordinated Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
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, premium, if any, and interest on such
Holder's Senior Subordinated Securities, on or after the respective due dates
expressed in the Senior Subordinated Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Senior Subordinated Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest overdue on principal and to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
per annum borne by the Senior Subordinated Securities and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 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 and the Holders allowed in
any judicial proceedings relative to the Company or any other obligor upon the
Senior Subordinated Securities, their respective creditors or their property and
shall be entitled and empowered to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior Subordinated Securities or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent
required by Article X or XII;
THIRD: to Holders for amounts due and unpaid on the Senior
Subordinated Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Subordinated Securities for principal and
interest, respectively; and
FOURTH: to the Company or the Guarantors, as their
respective interests may appear.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Senior Subordinated
Securities.
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this Section 7.01(c) does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise Incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02 Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does
not constitute willful misconduct or negligence.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in principal
amount of the Senior Subordinated Securities at the time outstanding,
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.
(f) The Trustee shall not be required to give any note, bond or
surety in respect of the execution of the trusts and powers under this
Indenture.
(g) The permissive rights of the Trustee to take any action
enumerated in this Indenture shall not be construed as a duty to take
such action.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee may, in
the absence of bad faith on its part, rely upon an Officers'
Certificate.
(j) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Senior Subordinated
Securities unless either (1) a Trust Officer shall have actual knowledge
of such Default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by the
Company, the Guarantors or any Holder.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior
Subordinated Securities and may otherwise deal with the Company, the Guarantors
or their respective Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Subsidiary Guarantee or the Senior Subordinated Securities,
it shall not be accountable for the Company's use of the proceeds of the Senior
Subordinated Securities or any money paid to the Company or upon the Company's
direction under any provision of this Indenture and it shall not be responsible
for any statement of the Company or any Guarantors in this Indenture or in any
document issued in connection with the issuance of the Senior Subordinated
Securities or in the Senior Subordinated Securities other than the Trustee's
certificate of authentication.
SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is actually known to the Trustee, the Trustee shall mail to
each Holder of Senior Subordinated Securities at the expense of the Company
notice of the Default within the earlier of 90 days after it occurs or 30 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in payment of principal of or interest
on any Senior Subordinated Security, including an acceleration under Section
6.02, the Trustee may withhold the notice if and so long as a committee of its
trust officers in good faith determines that withholding the notice is in the
interests of the Holders of the Senior Subordinated Securities. Notwithstanding
anything to the contrary expressed in this Indenture, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default hereunder, except in
the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is
acting as the Paying Agent, unless and until a Trust Officer receives written
notice thereof at its Corporate Trust Office specified in Section 13.02, from
the Company, a Guarantor or a Holder that such Default or Event of Default has
occurred.
SECTION 7.06 Reports by Trustee to Holders. The Trustee shall
transmit to the Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times and in
the manner provided pursuant thereto. To the extent that any such report is
required by the TIA with respect to any 12-month period, such report shall cover
the 12-month period ending December 31 and shall be transmitted by the next
succeeding March 1.
A copy of each report at the time of its mailing to Holders of
Senior Subordinated Securities shall be filed with the Commission and each stock
exchange (if any) on which the Senior Subordinated Securities are listed. The
Company agrees to notify promptly the Trustee whenever the Senior Subordinated
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time such reasonable compensation as is agreed to in
writing by the Trustee and Company for the Trustee's services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket disbursements, advances and expenses
Incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company and each Guarantor, jointly and
severally, shall indemnify the Trustee and its officers, directors,
shareholders, agents and employees (each, an "Indemnified Party") for and hold
each Indemnified Party harmless against any and all loss, liability or expense
(including reasonable attorneys' fees) Incurred by them without negligence or
bad faith on their part arising out of or in connection with the acceptance or
administration of this Indenture or the Senior Subordinated Securities and the
performance of their duties hereunder, including the cost and expense of
enforcing this Indenture against the Company (including this Section 7.07), and
defending itself against any claim (whether asserted by a Holder or any other
Person). The Trustee and its officers, directors, shareholders, agents and
employees in its capacity as Paying Agent, Registrar, Custodian and agent for
service of notice and demands shall have the full benefit of the foregoing
indemnity as well as all other benefits, rights and privileges accorded to the
Trustee in this Indenture when acting in such other capacity. The Trustee shall
notify the Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof, PROVIDED that any failure so to notify the
Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder. The Company shall defend the claim and the Indemnified
Party shall provide reasonable cooperation at the Company's expense in the
defense. Such Indemnified Parties may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel; provided that the
Company shall not be required to pay such fees and expenses if it assumes such
Indemnified Parties' defense and in such Indemnified Parties' reasonable
judgment, there is no conflict of interest between the Company and such
Indemnified Parties in connection with such defense. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss,
liability or expense Incurred by an Indemnified Party through such party's own
willful misconduct, negligence or bad faith. The Company and the Guarantors need
not pay any settlement made without the Company's consent (which consent shall
not be unreasonably withheld).
To secure the Company's and the Guarantors' payment obligations
in this Section 7.07, the Trustee shall have a lien on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Senior Subordinated Securities. Such
lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee. The Trustee's right to receive payment of
any amounts due under this Indenture shall not be subordinated to any other
indebtedness of the Company or the Guarantors and the Senior Subordinated
Securities shall be subordinate to the Trustee's rights to receive such payment.
The Company's and the Guarantors' payment obligations pursuant to
this Section 7.07 shall survive the satisfaction or discharge of this Indenture,
any rejection or termination of this Indenture under any Bankruptcy Law or the
resignation or removal of the Trustee. When the Trustee Incurs expenses after
the occurrence of a Default specified in Section 6.01(f) or (g) with respect to
the Company or any Guarantor, the expenses are intended to constitute expenses
of administration under the Bankruptcy Law.
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 Senior Subordinated Securities may remove the Trustee by
so notifying the Trustee and the Company in writing and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Senior Subordinated Securities
and such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of at least 10% in aggregate principal amount of the Senior Subordinated
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's and the Guarantors' obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, PROVIDED that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Senior Subordinated Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Senior Subordinated Securities so authenticated; and in case at that time any of
the Senior Subordinated Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Senior Subordinated Securities
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Senior Subordinated Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Legal Defeasance and Covenant Defeasance. (a) The
Company may, at the option of its Board of Directors evidenced by a Board
Resolution, at any time, elect to have either Section 8.01(b) or 8.01(c) be
applied to all outstanding Senior Subordinated Securities upon compliance with
the conditions set forth below in this Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
deemed to have been discharged from their obligations with respect to all
outstanding Senior Subordinated Securities and any Subsidiary Guarantee on the
date the conditions set forth below are satisfied ("Legal Defeasance"). For this
purpose, Legal Defeasance means that the Company and each Guarantor shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Subordinated Securities and any Subsidiary Guarantee, which
Senior Subordinated Securities and Subsidiary Guarantees shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.03 and the other
Sections of this Indenture referred to in clauses (i) and (ii) below, and to
have satisfied all their other obligations under such Senior Subordinated
Securities, the Subsidiary Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Senior Subordinated Securities to receive payments in respect of the
principal of and interest on such Senior Subordinated Securities, solely from
the trust fund described in Section 8.03, when such payments are due, (ii) the
Company's obligations with respect to the Senior Subordinated Securities under
Sections 2.01(a) and (b) and 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 2.14 and
2.15 and 4.25 which shall survive until the Senior Subordinated Securities have
been paid in full, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder (including claims of, or payments to, the Trustee under or
pursuant to Section 7.07) and (iv) this Article VIII. Subject to compliance with
this Article VIII, the Company may exercise its option under this Section
8.01(b) notwithstanding the prior exercise of its option under Section 8.01(c).
(c) Upon the Company's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19,
4.20, 4.21, 4.23, 4.24, 4.25, 4.26, 5.01(a)(ii), (iv) and (v) and 5.02 with
respect to the outstanding Senior Subordinated Securities on and after the date
the conditions set forth below are satisfied ("Covenant Defeasance"), and the
Senior Subordinated Securities shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration of act of Holders
(and the consequences of any thereof) in connection with such Sections, but
shall continue to be deemed "outstanding" for all the other purposes hereunder.
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior Subordinated Securities, the Company and its Subsidiaries may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(c), but, except as specified above,
the remainder of this Indenture and such Senior Subordinated Securities shall be
unaffected thereby. In addition, upon the Company's exercise under Section
8.01(a) of the option applicable to this Section 8.01(c), subject to the
satisfaction of the conditions set forth in Section 8.03, Sections 6.01(d), (e)
and (h) shall not constitute Events of Default.
SECTION 8.02 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.01(b)
or 8.01(c) to the outstanding Senior Subordinated Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender, non-callable 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 and interest on the Senior Subordinated Securities on
the stated date for payment thereof or on the applicable redemption date, as the
case may be; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
Events of Default under Section 6.01(f) or (g) are concerned, at any time in the
period ending on the 91st day after the date of deposit; (v) 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; (vi) 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; (vii) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with; and (viii) the Company shall have delivered to the Trustee an Opinion of
Counsel to that effect that (a) the trust funds will not be subject to any
rights of holders of Senior Debt, including, without limitation, those arising
under this Indenture and (b) assuming no intervening bankruptcy of the Company
between the date of deposit and the 91st day following deposit and that no
Holder is an insider of the Company, after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) in the immediately preceding paragraph with respect to a Legal
Defeasance need not be delivered if all Senior Subordinated Securities not
theretofore delivered to the Trustee for cancellation (1) have become due and
payable; or (2) will become due and payable on the maturity date within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
SECTION 8.03 Deposited Money and Government Senior Subordinated
Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to
Section 8.04, U.S. Legal Tender and U.S. government obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 8.02 or Section
8.06 in respect of the outstanding Senior Subordinated Securities shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Subordinated Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of all sums due and to
become due thereon in respect of principal and interest, but such money need not
be segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any U.S. Legal Tender or U.S. government obligations
(including the proceeds thereof) held by it as provided in Section 8.02 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.02(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.04 Repayment to Company. Any U.S. Legal Tender
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or interest on any Senior Subordinated
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Senior Subordinated Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company, cause to be published once, in The
New York Times (national edition) and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.05 Reinstatement. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. government obligations in
accordance with this Article VIII by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and the Guarantors' obligations under this
Indenture and the Senior Subordinated Securities and the Guarantors' obligations
under the Subsidiary Guarantees shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
this Article VIII; PROVIDED, HOWEVER, that, if the Company or any Guarantor
makes any payment of principal of or interest on any Senior Subordinated
Security following the reinstatement of its obligations, the Company or any
Guarantor, as the case may be, shall be subrogated to the rights of the Holders
of such Senior Subordinated Securities to receive such payment from the money
held by the Trustee or Paying Agent.
SECTION 8.06 Satisfaction and Discharge of Indenture. Upon the
request of the Company, this Indenture will be discharged and will cease to be
of further effect (except as to surviving rights of registration of transfer or
exchange of the Senior Subordinated Securities, as expressly provided for herein
or pursuant hereto), the Company and the Guarantors will be discharged from
their obligations under the Senior Subordinated Securities and the Subsidiary
Guarantees, respectively, and the Trustee, at the expense of the Company, will
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when:
(a) either (i) all the Senior Subordinated Securities theretofore
authenticated and delivered (other than mutilated, destroyed, lost or
stolen Senior Subordinated Securities that have been replaced or paid
and Senior Subordinated Securities that have been subject to defeasance
under this Article VIII) have been delivered to the Trustee for
cancellation or (ii) all Senior Subordinated Securities not theretofore
delivered to the Trustee for cancellation (A) have become due and
payable, (B) will become due and payable at maturity within one year or
(C) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company, and the
Company, in the case of (A), (B) or (C) above, has irrevocably deposited
or caused to be deposited with the Trustee funds in trust for such
purpose in an amount sufficient to pay and discharge, without the need
to reinvest any proceeds thereof, the entire Indebtedness on such Senior
Subordinated Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest on the Senior Subordinated
Securities to the date of such deposit (in the case of Senior
Subordinated Securities that have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable
under this Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company and the Guarantors to the Trustee under Section
7.07 and, if money shall have been deposited with the Trustee pursuant to clause
(a)(ii) of this Section 8.06, the obligations of the Trustee under Section 8.06
and Section 2.04 shall survive.
ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Holders. From time to time, the
Company and each Guarantor, when authorized by a Board Resolution of their
respective Boards of Directors, and the Trustee, without the consent of the
Holders, may amend this Indenture or the Senior Subordinated Securities or the
Subsidiary Guarantees for the following purposes:
(1) to cure any ambiguity, defect or inconsistency, PROVIDED that
any such amendment does not, in the opinion of the Trustee, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect the
rights of any Holder or any holder of the Series A Securities or the
Series C Securities;
(2) to provide for uncertificated Senior Subordinated Securities
in addition to or in place of certificated Senior Subordinated
Securities (PROVIDED that the uncertificated Senior Subordinated
Securities are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Senior
Subordinated Securities are described in Section 163(f)(2)(B) of the
Code);
(3) to comply with Article V;
(4) to release any Guarantor from its Subsidiary Guarantee in
accordance with the provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights
or benefits to each of the Holders of Senior Subordinated Securities and
the holders of the Series A Securities and the Series C Securities,
treating, for such purpose, the Senior Subordinated Securities, the
Series A Securities and the Series C Securities as one class, or that
does not adversely affect the legal rights under this Indenture of any
such Holder of Senior Subordinated Securities or any holder of Series A
Securities or Series C Securities, or
(7) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article VII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
SECTION 9.02 With Consent of Holders. The Company, the Guarantors
and the Trustee may amend this Indenture, the Subsidiary Guarantees or the
Senior Subordinated Securities with the written consent of (i) the Holders of at
least 66 2/3% in principal amount of the outstanding Senior Subordinated
Securities, (ii) the holders of at least 66 2/3% in principal amount of the
Series A Securities and (iii) the holders of at least 66 2/3% in principal
amount of the Series C Securities. However, without the consent of (i) each
Holder of a Senior Subordinated Security, (ii) each holder of the Series A
Securities and (iii) each holder of the Series C Securities, an amendment may
not:
(i) reduce the principal amount of Senior Subordinated Securities
whose Holders must consent to an amendment;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Senior Subordinated Securities;
(iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Senior Subordinated Securities, or
change the date on which any Senior Subordinated Securities may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(iv) make any Senior Subordinated Securities payable in money other
than that stated in the Senior Subordinated Securities;
(v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Senior Subordinated Securities on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders
of a majority in principal amount of Senior Subordinated Securities to
waive Defaults or Events of Default;
(vi) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Senior
Subordinated Securities in a manner which adversely affects the Holders;
PROVIDED, HOWEVER, that it is understood that any amendment, the purpose
of which is to permit the Incurrence of additional Indebtedness under
this Indenture shall not be construed as adversely affecting the ranking
of the Senior Subordinated Securities; or
(vii) make any change to the Subsidiary Guarantees in any manner
that adversely affects the rights of the Holders.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof
No amendment under this Section 9.02 may make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article XII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Senior Subordinated Securities shall comply with the
TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Senior Subordinated
Security shall bind the Holder and every subsequent Holder of that Senior
Subordinated Security or portion of the Senior Subordinated Security that
evidences the same debt as the consenting Holder's Senior Subordinated Security,
even if notation of the consent or waiver is not made on the Senior Subordinated
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Senior Subordinated Security or portion of the
Senior Subordinated Security if the Trustee receives written notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Senior Subordinated
Securityholder. Except if otherwise specified in such amendment or waiver, an
amendment or waiver becomes effective once the requisite number of consents are
received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Senior Subordinated Securities
entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date
is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities. If an amendment changes the terms of a Senior Subordinated Security,
the Trustee may require the Holder of the Senior Subordinated Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Senior Subordinated Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Senior Subordinated Security shall issue and the Trustee
shall authenticate a new Senior Subordinated Security that reflects the changed
terms. Failure to make the appropriate notation or to issue a new Senior
Subordinated Security shall not affect the validity of such amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel, each stating that such amendment is authorized or permitted by this
Indenture and that such amendment is the legal, valid and binding obligation of
the Company and the Guarantors enforceable against them in accordance with its
terms, subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
SECTION 9.07 Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture, any Subsidiary Guarantee or the Senior
Subordinated Securities unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
SUBORDINATION OF SENIOR SUBORDINATED SECURITIES
SECTION 10.01 Senior Subordinated Securities Subordinated to
Senior Debt. The Company covenants and agrees, and the Trustee and each Holder
of the Senior Subordinated Securities by their acceptance thereof likewise
covenant and agree, (i) that all Senior Subordinated Securities shall be issued
subject to the provisions of this Article X; and each Person holding any Senior
Subordinated Security, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture by the Company shall, to the extent
and in the manner set forth in this Article X, be subordinated and junior in
right of payment to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Debt of the Company, whether outstanding on the Issue Date
or thereafter Incurred, including, without limitation, the Company's Obligations
under the Credit Agreement, and (ii) that the subordination is for the benefit
of, and shall be enforceable directly by, the holders of Senior Debt, and that
each holder of Senior Debt whether now outstanding or hereafter created,
Incurred, assumed or guaranteed shall be deemed to have acquired Senior Debt in
reliance upon the covenants and provisions contained in this Indenture and the
Senior Subordinated Securities.
SECTION 10.02 No Payment on Securities in Certain Circumstances.
Unless Section 10.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Senior Debt, no payment of any kind or character shall be
made by or on behalf of the Company or any other Person on its behalf with
respect to any Obligations on the Senior Subordinated Securities or to acquire
any of the Senior Subordinated Securities for cash or property or otherwise
(except that holders of the Senior Subordinated Securities may receive payments
from a trust described under Article VIII so long as, on the date or dates the
respective amounts were paid into the trust, such payments were made with
respect to the Senior Subordinated Securities in accordance with the provisions
of Article VIII and without violating the provisions of Article X or Article XII
of this Indenture (a "Defeasance Trust Payment")).
In addition, unless Section 10.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Senior Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
written notice of the event of default to the Trustee (a "Payment Blockage
Notice"), then, unless and until all events of default have been cured or waived
or have ceased to exist or the Trustee receives notice from the Representative
for the respective issue of Designated Senior Debt terminating the Payment
Blockage Period, during the 180 days after the receipt by the Trustee of such
Payment Blockage Notice (the "Payment Blockage Period"), neither the Company nor
any other Person on its behalf shall (x) make any payment of any kind or
character with respect to any Obligations on the Senior Subordinated Securities
or (y) acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that Holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Payment Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Payment Blockage Notice and only one such Payment Blockage Period
may be commenced within any 360 consecutive days. No event of default which
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be made,
the basis for commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 10.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Senior Subordinated
Securities at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 10.02 and before all Obligations in respect
of Designated Senior Debt of the Company are paid in full in cash or Cash
Equivalents, such payment or distribution shall be received and held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Debt of the Company (PRO RATA to such holders on the basis of
the respective amounts of Designated Senior Debt held by such holders) or their
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Designated Senior Debt remaining unpaid until all such Designated Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Designated Senior Debt.
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of the Company or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to the Company or its property, whether voluntary or involuntary, all
Obligations due or to become due upon all Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the applicable
Senior Debt whether or not such interest is an allowed claim in such proceeding)
shall first be paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, before any
payment or distribution of any kind or character is made on account of any
Obligations on the Senior Subordinated Securities, or for the acquisition of any
of the Senior Subordinated Securities for cash or property or otherwise (except
that Holders of the Senior Subordinated Securities may receive Defeasance Trust
Payments). Before any payment may be made by, or on behalf of, the Company of
any Obligations on the Senior Subordinated Securities upon any such dissolution
or winding-up or total liquidation or reorganization, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), to which the Holders of the Senior Subordinated Securities or the
Trustee on their behalf would be entitled, but for the subordination provisions
of this Indenture, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Debt of the Company (PRO
RATA to such holders on the basis of the respective amounts of Senior Debt held
by such holders) or their Representatives or to the trustee or trustees or agent
or agents under any agreement or indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, to the
extent necessary to pay all such Senior Debt in full in cash or Cash Equivalents
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Senior Subordinated Securities at a time when such
payment or distribution is prohibited by Section 10.03(a) and before all
Obligations in respect of Senior Debt of the Company are paid in full in cash or
Cash Equivalents, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt of the Company (PRO RATA to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their
Representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of such
Senior Debt remaining unpaid until all such Senior Debt has been paid in full in
cash or Cash Equivalents after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(c) To the extent any payment of Senior Debt (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
has not occurred.
(d) 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 or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided in Article V shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 10.03 if such other Person
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article V.
SECTION 10.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Senior Debt of the Company, the Holders of the Senior
Subordinated Securities shall be subrogated to the rights of the holders of such
Senior Debt to receive payments or distributions of cash, property or securities
of the Company made on such Senior Debt until the principal of and interest on
the Senior Subordinated Securities shall be paid in full in cash or Cash
Equivalents; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of the Company of any cash,
property or securities to which the Holders of the Senior Subordinated
Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article X, and no payment over pursuant to the provisions of
this Article X to the holders of Senior Debt of the Company by Holders of the
Senior Subordinated Securities or the Trustee on their behalf shall, as between
the Company, its creditors other than holders of Senior Debt of the Company, and
the Holders of the Senior Subordinated Securities, be deemed to be a payment by
the Company to or on account of the Senior Debt of the Company. It is understood
that the provisions of this Article X are and are intended solely for the
purpose of defining the relative rights of the Holders of the Senior
Subordinated Securities, on the one hand, and the holders of the Senior Debt of
the Company, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article X shall have been applied, pursuant to the provisions
of this Article X, to the payment of all amounts payable under Senior Debt, then
and in such case, the Holders of the Senior Subordinated Securities shall be
entitled to receive from the holders of such Senior Debt any payments or
distributions received by such holders of Senior Debt in excess of the amount
required to make payment in full in cash of such Senior Debt.
SECTION 10.05 Obligations of the Company Unconditional. Nothing
contained in this Article X or elsewhere in this Indenture or in the Senior
Subordinated Securities is intended to or shall impair, as among the Company and
the Holders of the Senior Subordinated Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Senior Subordinated Securities the principal of and interest on the Senior
Subordinated Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Senior Subordinated Securities and creditors of the
Company other than the holders of the Senior Debt of the Company, nor shall
anything herein or therein prevent the Holder of any Senior Subordinated
Security or the Trustee on their behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article X of the holders of the Senior Debt of the
Company in respect of cash, property or securities of the Company received upon
the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article X shall restrict the right of the Trustee or the
Holders of Senior Subordinated Securities to take any action to declare the
Senior Subordinated Securities to be due and payable prior to their stated
maturity pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
PROVIDED, HOWEVER, that all Senior Debt of the Company then due and payable
shall first be paid in full in cash or Cash Equivalents before the Holders of
the Senior Subordinated Securities or the Trustee are entitled to receive any
direct or indirect payment from, or on behalf of, the Company on account of any
Obligations on the Senior Subordinated Securities.
SECTION 10.06 Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the Senior
Subordinated Securities pursuant to the provisions of this Article X (although
the failure to give any such notice shall not affect the subordination
provisions set forth in this Article X). The Trustee shall not be charged with
knowledge of the existence of any event of default with respect to any Senior
Debt of the Company or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
Officer of the Company, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article VII, be entitled to assume that no such facts exist;
PROVIDED, HOWEVER, that if the Trustee shall not have received the notice
provided for in this Section 10.06 at least two Business Days prior to the date
upon which by the terms of this Indenture any moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of or
interest on any Senior Subordinated Security), then, regardless of anything
herein to the contrary, the Trustee shall have full power and authority to
receive any moneys from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date (although the
receipt of such moneys by any Holder of Senior Subordinated Securities shall
otherwise be subject to the provisions of this Article X). Nothing contained in
this Section 10.06 shall limit the right of the holders of Senior Debt of the
Company to recover payments from Holders as contemplated by Section 10.02 or
10.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Debt of the Company (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or distribution
pursuant to this Article X, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Debt of the Company 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 X, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 10.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article X, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt of the Company 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 X.
SECTION 10.08 Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article X
with respect to any Senior Debt of the Company which may at any time be held by
it in its individual or any other capacity to the same extent as any other
holder of Senior Debt of the Company, and nothing in this Indenture shall
deprive the Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article X, and no implied
covenants or obligations with respect to the holders of Senior Debt of the
Company shall be read into this Indenture against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Debt of the
Company (except as provided in Section 10.02 and Section 10.03(b), subject to
Section 10.06). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Senior Subordinated Securities or to the Company or to any other Person cash,
property or securities to which any holders of Senior Debt of the Company shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt. No right of any present or
future holders of any Senior Debt of the Company to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article X are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt of the Company.
SECTION 10.10. Holders Authorize Trustee To Effectuate
Subordination of Senior Subordinated Securities. Each Holder of Senior
Subordinated Securities by its acceptance of such Senior Subordinated Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article X, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his
Senior Subordinated Securities in the form required in those proceedings. If the
Trustee does not file a proper claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Debt or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Senior Subordinated
Securities. Nothing herein contained shall be deemed to authorize the Trustee or
the holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Securities or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article X shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 10.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article X shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 10.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 10.09, the holders of Senior Debt of
the Company may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Senior Subordinated Securities,
without incurring responsibility to the Holders of the Senior Subordinated
Securities and without impairing or releasing the subordination provided in this
Article X or the obligations hereunder of the Holders of the Senior Subordinated
Securities to the holders of Senior Debt of the Company, do any one or more of
the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Debt or any instrument
evidencing the same or any agreement under which such Senior Debt is outstanding
or secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (c) release any
Person liable in any manner for the collection of such Senior Debt; and (d)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
X.
SECTION 10.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article X (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XI
SUBSIDIARY GUARANTEES
SECTION 11.01 Subsidiary Guarantees. Each Guarantor hereby
jointly and severally unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest (including interest on overdue principal and interest on overdue
interest, to the extent lawful) on the Senior Subordinated Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture (including obligations
to the Trustee) and the Senior Subordinated Securities and (b) the full and
punctual performance of all other obligations of the Company whether for
expenses, indemnification or otherwise under this Indenture and the Senior
Subordinated Securities (all of the foregoing being collectively called the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from each such Guarantor, and that each such Guarantor shall
remain bound under this Article XI notwithstanding any extension or renewal of
any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Senior Subordinated Securities or the Guaranteed Obligations. The
obligations of each Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Senior Subordinated Securities or any other agreement or otherwise; (b) any
extension or renewal of any Guaranteed Obligations; (c) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Indenture,
the Senior Subordinated Securities or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Guaranteed Obligations or
any of them; (e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; (f) any change
in the ownership of such Guarantor; (g) the validity, regularity or
enforceability of the Senior Subordinated Securities or this Indenture.
The Subsidiary Guarantee of each Guarantor is, to the extent and
in the manner set forth in Article XII, subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Debt and is made
subject to such provisions of this Indenture.
Each Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Senior Subordinated Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Guaranteed Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in U.S. Legal Tender, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid principal amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest, premium and liquidated damages,
if any, on such Guaranteed Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Guaranteed Obligations of the Company to the
Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations and all Guarantor Senior Debt as provided in Article XII. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Subsidiary Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
Each Guarantor 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 Section.
SECTION 11.02 Execution and Delivery of Subsidiary Guarantee. (a)
To evidence each Guarantor's Subsidiary Guarantee set forth in this Article XI,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee shall
be placed on each Senior Subordinated Security authenticated and delivered by
the Trustee.
(b) This Indenture shall be executed on behalf of each Guarantor,
and an Officer of each Guarantor shall sign the notation of the Subsidiary
Guarantee on each Senior Subordinated Security, by manual or facsimile
signature. If an Officer whose signature is on this Indenture or the notation of
Subsidiary Guarantee on any Senior Subordinated Security no longer holds that
office at the time the Trustee authenticates such Senior Subordinated Security
on which the Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be
valid nevertheless. Each Guarantor hereby agrees that the Subsidiary Guarantee
set forth in Section 11.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Subordinated Security a
notation of the Subsidiary Guarantee.
(c) The delivery of any Senior Subordinated Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of
each Guarantor.
SECTION 11.03 Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be guaranteed (after giving effect to all its guarantees
of Indebtedness under the Credit Agreement) without rendering this Indenture, as
it relates to any Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
SECTION 11.04 Successors and Assigns. This Article XI shall be
binding upon each Guarantor and its successors and assigns and shall inure 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
Senior Subordinated Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.05 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 XI 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 XI
at law, in equity, by statute or otherwise.
SECTION 11.06 Release of Guarantors. The Subsidiary Guarantee
furnished by a Guarantor shall be automatically and unconditionally released and
discharged (at which time such Person shall cease to be a Guarantor), without
any further action required on the part of the Trustee or any Holder, upon the
occurrence of (i) the release and discharge of the guarantee which resulted in
the creation of such Subsidiary Guarantee (as well as the release or discharge
of any subsequently created guarantees which would have resulted in the creation
of such Subsidiary Guarantee if same did not already exist), in each case except
a discharge or release by or as a result of payment under such Subsidiary
Guarantee and (ii) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company of all of the
Company's and its other Restricted Subsidiaries' Capital Stock in such
Guarantor; PROVIDED that such sale or disposition of such Capital Stock or
assets is otherwise in compliance with the terms of this Indenture.
SECTION 11.07 Modification. No modification, amendment or waiver
of any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt. Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Senior Subordinated Securities by their acceptance thereof
likewise covenant and agree, (i) that all Subsidiary Guarantees shall be issued
subject to the provisions of this Article XII; and each Person holding any
Subsidiary Guarantee, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture pursuant to the Subsidiary Guarantee
made by or on behalf of such Guarantor shall, to the extent and in the manner
set forth in this Article XII, be subordinated and junior in right of payment to
the prior payment in full in cash or Cash Equivalents of all Obligations on
Guarantor Senior Debt of such Guarantor, whether outstanding on the Issue Date
or thereafter Incurred, including, without limitation, such Guarantor's
Obligations under the Credit Agreement, and (ii) that the subordination is for
the benefit of, and shall be enforceable directly by, the holders of Guarantor
Senior Debt, and that each holder of Guarantor Senior Debt whether now
outstanding or hereafter created, Incurred, assumed or guaranteed shall be
deemed to have acquired Guarantor Senior Debt in reliance upon the covenants and
provisions contained in this Indenture, the Senior Subordinated Securities, and
the Subsidiary Guarantees.
SECTION 12.02 No Payment on Securities in Certain Circumstances.
Unless Section 12.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Guarantor Senior Debt, no payment of any kind or character
shall be made by or on behalf of any Guarantor or any other Person on its behalf
with respect to any Obligations on the Subsidiary Guarantees of any Guarantor or
to acquire any of the Subsidiary Guarantees of any Guarantor for cash or
property or otherwise (except that holders of the Subsidiary Guarantees may
receive Defeasance Trust Payments from a trust described under Article VIII so
long as, on the date or dates the respective amounts were paid into the trust,
such payments were made with respect to the Subsidiary Guarantees in accordance
with the provisions of Article VIII and without violating the provisions of
Article X or Article XII of this Indenture).
In addition, unless Section 12.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Guarantor Senior Debt, as such event of default is defined in the instrument
creating or evidencing such Designated Guarantor Senior Debt, permitting the
holders of such Designated Guarantor Senior Debt then outstanding to accelerate
the maturity thereof and if the Representative for the respective issue of
Designated Guarantor Senior Debt gives written notice of the event of default to
the Trustee (a "Guarantor Default Notice"), then, unless and until all events of
default have been cured or waived or have ceased to exist or the Trustee
receives notice from the Representative for the respective issue of Designated
Guarantor Senior Debt terminating the Guarantor Blockage Period, during the 180
days after the receipt by the Trustee of such Guarantor Default Notice (the
"Guarantor Blockage Period"), neither any Guarantor nor any other Person on
either of its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on the Subsidiary Guarantees of such Guarantor or (y)
acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Guarantor Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Guarantor Default Notice and only one such Guarantor Blockage
Period may be commenced within any 360 consecutive days. No event of default
which existed or was continuing on the date of the commencement of any Guarantor
Blockage Period with respect to the Designated Guarantor Senior Debt shall be,
or be made, the basis for commencement of a second Guarantor Blockage Period by
the Representative of such Designated Guarantor Senior Debt whether or not
within a period of 360 consecutive days, unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Guarantor Blockage Period that, in either case, would give rise to an event of
default pursuant to any provisions under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 12.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of any Guarantor of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Subsidiary
Guarantees at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 12.02 and before all Obligations in respect
of Designated Guarantor Senior Debt of such Guarantor are paid in full in cash
or Cash Equivalents, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Designated Guarantor Senior Debt (PRO RATA to such holders on the basis of the
respective amounts of Designated Guarantor Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Designated Guarantor Senior Debt may
have been issued, as their respective interests may appear, for application to
the payment of such Designated Guarantor Senior Debt remaining unpaid until all
such Designated Guarantor Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Designated Guarantor Senior
Debt.
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of any Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of any Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to such Guarantor or its property, whether voluntary or involuntary,
all Obligations due or to become due upon all Guarantor Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Guarantor Senior Debt whether or not such interest is an allowed
claim in such proceeding) shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt, before any payment or distribution of any kind
or character is made on account of any Obligations on the Subsidiary Guarantees,
or for the acquisition of any of the Senior Subordinated Securities for cash or
property or otherwise (except that Holders of the Senior Subordinated Securities
may receive Defeasance Trust Payments). Before any payment may be made by, or on
behalf of, any Guarantor of any Obligations on the Subsidiary Guarantees upon
any such dissolution or winding-up or total liquidation or reorganization, any
payment or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities (excluding any Defeasance
Trust Payment), to which the Holders of the Subsidiary Guarantees or the Trustee
on their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (PRO RATA to such holders on the basis of the respective amounts of
Guarantor Senior Debt held by such holders) or their Representatives or to the
trustee or trustees or agent or agents under any agreement or indenture pursuant
to which any of such Guarantor Senior Debt may have been issued, as their
respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Debt in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any Defeasance Trust Payment), shall be
received by the Trustee or any Holder of Subsidiary Guarantees at a time when
such payment or distribution is prohibited by Section 12.03(a) and before all
Obligations in respect of Guarantor Senior Debt of such Guarantor are paid in
full in cash or Cash Equivalents, such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Guarantor Senior Debt of such Guarantor (PRO RATA to such holders
on the basis of the respective amounts of Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Guarantor Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Guarantor Senior Debt remaining unpaid until all such Guarantor Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(c) To the extent any payment of Guarantor Senior Debt (whether
by or on behalf of any Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Guarantor Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(d) The consolidation of any Guarantor with, or the merger of
such Guarantor with or into, another Person or the liquidation or dissolution of
such Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another Person upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V.
SECTION 12.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Guarantor Senior Debt of any Guarantor, the Holders of
the Subsidiary Guarantees of such Guarantor shall be subrogated to the rights of
the holders of such Guarantor Senior Debt to receive payments or distributions
of cash, property or securities of such Guarantor made on such Guarantor Senior
Debt until the principal of and interest on the Senior Subordinated Securities
shall be paid in full in cash or Cash Equivalents; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Guarantor Senior
Debt of such Guarantor of any cash, property or securities to which the Holders
of the Senior Subordinated Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article XII, and no payment over
pursuant to the provisions of this Article XII to the holders of Guarantor
Senior Debt of such Guarantor by Holders of the Senior Subordinated Securities
or the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of Guarantor Senior Debt of such Guarantor, and the Holders
of the Senior Subordinated Securities, be deemed to be a payment by such
Guarantor to or on account of the Guarantor Senior Debt of such Guarantor. It is
understood that the provisions of this Article XII are and are intended solely
for the purpose of defining the relative rights of the Holders of the Senior
Subordinated Securities, on the one hand, and the holders of the Guarantor
Senior Debt of such Guarantor, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article XII shall have been applied, pursuant to the
provisions of this Article XII, to the payment of all amounts payable under
Guarantor Senior Debt, then and in such case, the Holders of the Senior
Subordinated Securities shall be entitled to receive from the holders of such
Guarantor Senior Debt any payments or distributions received by such holders of
Guarantor Senior Debt in excess of the amount required to make payment in full
in cash of such Guarantor Senior Debt.
SECTION 12.05 Obligations of the Guarantors Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture, the Senior
Subordinated Securities or in the Subsidiary Guarantees is intended to or shall
impair, as among the Guarantors and the Holders of the Senior Subordinated
Securities, the obligation of the Guarantors, which is absolute and
unconditional, to pay to the Holders of the Subsidiary Guarantees the principal
of and interest on the Subsidiary Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Subsidiary Guarantees and
creditors of the Guarantors other than the holders of the Guarantor Senior Debt
of the Guarantors, nor shall anything herein or therein prevent the Holder of
any Senior Subordinated Security or the Trustee on their behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of the Guarantor Senior Debt of the Guarantors in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article XII shall restrict the right of the Trustee or the
Holders of Subsidiary Guarantees to take any action to declare the Subsidiary
Guarantees to be due and payable prior to their stated maturity pursuant to
Section 6.02 or to pursue any rights or remedies hereunder; PROVIDED, HOWEVER,
that all Guarantor Senior Debt of the Guarantors then due and payable shall
first be paid in full in cash or Cash Equivalents before the Holders of the
Subsidiary Guarantees or the Trustee are entitled to receive any direct or
indirect payment from, or on behalf of, the Guarantors on account of any
Obligations on the Subsidiary Guarantees.
SECTION 12.06 Notice to Trustee. Each 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 in respect of the Senior
Subordinated Securities and the Subsidiary Guarantees pursuant to the provisions
of this Article XII (although the failure to give any such notice shall not
affect the subordination provisions set forth in this Article XII). The Trustee
shall not be charged with knowledge of the existence of any event of default
with respect to any Guarantor Senior Debt of any Guarantor or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing at its Corporate Trust
Office to that effect signed by an Officer of any Guarantor, or by a holder of
Guarantor Senior Debt or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article VII, be entitled
to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 12.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Subsidiary Guarantee), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Guarantors and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date
(although the receipt of such moneys by any Holder of Senior Subordinated
Securities shall otherwise be subject to the provisions of this Article XII).
Nothing contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Debt of the Guarantors to recover payments from Holders as
contemplated by Section 12.02 or 12.03. The Trustee shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself or
itself to be a holder of any Guarantor Senior Debt of any Guarantor (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Guarantor Senior Debt or a
trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt of any Guarantor to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt of any Guarantor 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
XII, 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 12.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article XII, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Guarantor Senior Debt of the Guarantors and
other indebtedness of the Guarantors, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII.
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt. The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Debt of the Guarantors
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 Debt of the Guarantors,
and nothing in this Indenture shall deprive the Trustee or any Paying Agent of
any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt of the
Guarantors, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XII, and
no implied covenants or obligations with respect to the holders of Guarantor
Senior Debt of the Guarantors 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 Debt of the Guarantors (except as provided in
Section 12.02 and Section 12.03(b), subject to Section 12.06). The Trustee shall
not be liable to any such holders if the Trustee shall in good faith mistakenly
pay over or distribute to Holders of Senior Subordinated Securities or to the
Guarantors or to any other Person cash, property or securities to which any
holders of Guarantor Senior Debt of any Guarantor shall be entitled by virtue of
this Article XII or otherwise.
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor Senior Debt. No right of any
present or future holders of any Guarantor Senior Debt of any Guarantor to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any such Guarantor with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article XII are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Guarantor Senior Debt of
any such Guarantor.
SECTION 12.10. Holders Authorize Trustee To Effectuate
Subordination of Subsidiary Guarantees. Each Holder of Senior Subordinated
Securities and Subsidiary Guarantees by its acceptance of them authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its or his Senior Subordinated Securities in the form required in
those proceedings. If the Trustee does not file a proper claim or proof of debt
in the form required in any proceeding referred to in Section 6.09 prior to 30
days before the expiration of the time to file such claim or claims, then any of
the holders of the Guarantor Senior Debt or their Representative is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Senior Subordinated Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Subordinated Securities, the Subsidiary Guarantees or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Guarantor Senior Debt or their Representative to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 12.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article XII shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article XII shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 12.09, the holders of Guarantor
Senior Debt of any Guarantor may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Senior Subordinated
Securities, without incurring responsibility to the Holders of the Senior
Subordinated Securities and without impairing or releasing the subordination
provided in this Article XII or the obligations hereunder of the Holders of the
Senior Subordinated Securities to the holders of Guarantor Senior Debt of any
Guarantor, do any one or more of the following: (a) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, such
Guarantor Senior Debt or any instrument evidencing the same or any agreement
under which such Guarantor Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Guarantor Senior Debt; (c) release any Person liable in
any manner for the collection of such Guarantor Senior Debt; and (d) exercise or
refrain from exercising any rights against any Guarantor and any other Person.
SECTION 12.14. Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
XII.
SECTION 12.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article XII (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act 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 notice or communication shall be in
writing and delivered in person, mailed by first-class mail, transmitted by
confirmed facsimile or delivered by overnight courier, addressed as follows:
if to the Company or any Guarantor:
Cadmus Communications Corporation
6620 West Broad Street
Richmond, VA 23230
Telephone: (804) 287-5690
Facsimile: (804) 287-5683
Attention: Bruce V. Thomas, Chief Financial Officer
with a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219-4074
Telephone: (804) 788-8464
Facsimile: (804) 788-8212
Attention: T. Justin Moore, III, Esq.
if to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Telephone: (302) 651-8681
Facsimile: (302) 651-8882
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; five
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a change of address shall not be deemed to have been given
until actually received by the addressee); when receipt acknowledged, if
telecopied; and the next Business Day after timely delivered to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication mailed to a Holder, including any
notice delivered in connection with Sections 310(b), 313(c), 314(a) and 315(b)
of the TIA shall be mailed to such Holder at such Holder's address as it appears
on the Security Register and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture, the Subsidiary Guarantees or the
Senior Subordinated Securities. The Company, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or a Guarantor to the Trustee to
take or refrain from taking any action under this Indenture after the Issue
Date, at the request of the Trustee, the Company or such Guarantor, as the case
may be, shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
To the extent applicable, the Company and the Guarantors shall
comply with the provisions of TIA ss. 314(c)(3).
SECTION 13.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06 When Senior Subordinated Securities Disregarded. In
determining whether the Holders of the required principal amount of Senior
Subordinated Securities have concurred in any direction, waiver or consent,
Senior Subordinated Securities owned by the Company, the Guarantors or any of
their Affiliates shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Senior Subordinated
Securities which the Trustee actually knows are so owned shall be so
disregarded.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of Delaware or the State of New York. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.09 GOVERNING LAW. THIS INDENTURE, THE SUBSIDIARY
GUARANTEES, AND THE SENIOR SUBORDINATED SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10 Submission to Jurisdiction. The Company, each
Guarantor and each Holder of Senior Subordinated Securities, by its acceptance
thereof, consents to the jurisdiction of, and elects as the sole judicial forum
for the adjudication of any matters arising under or in connection with this
Indenture or the Senior Subordinated Securities, the courts of the County of New
York, State of New York, or of the United States of America for the Southern
District of New York.
SECTION 13.11 No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Senior Subordinated Securities, the Subsidiary Guarantees or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Senior Subordinated Security, each
Holder waives and releases all such liability. The waiver and release shall be
part of the consideration for the issue of the Senior Subordinated Securities.
SECTION 13.12 Successors. All agreements of the Company and each
Guarantor in this Indenture, the Senior Subordinated Securities and the
Subsidiary Guarantees, as the case may be, shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.13 Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
One signed copy is enough to prove this Indenture.
SECTION 13.14 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.15 Severability. In case any provision of this
Indenture, in the Senior Subordinated Securities or in a Subsidiary Guarantee
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
CADMUS COMMUNICATIONS CORPORATION
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
WILMINGTON TRUST COMPANY,
as Trustee
By:
---------------------------------------
Name:
Title:
GUARANTORS:
CADMUS JOURNAL SERVICES, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
WASHBURN GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
AMERICAN GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
EXPERT GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
CADMUS DIRECT MARKETING, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
THREE SCORE, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
MACK PRINTING COMPANY
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
PORT CITY PRESS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
MACK PRINTING GROUP, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
SCIENCE CRAFTSMAN INCORPORATED
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
SECTION 1.01 Definitions...............................................1
SECTION 1.02 Other Definitions........................................28
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........28
SECTION 1.04 Rules of Construction....................................29
ARTICLE II THE SENIOR SUBORDINATED SECURITIES..............................................29
SECTION 2.01 Form and Dating; Issuance................................29
SECTION 2.02 Execution and Authentication.............................30
SECTION 2.03 Registrar and Paying Agent...............................31
SECTION 2.04 Paying Agent To Hold Money in Trust......................32
SECTION 2.05 Senior Subordinated Securityholder Lists.................32
SECTION 2.06 Registration of Transfer and Exchange....................32
SECTION 2.07 Replacement Senior Subordinated Securities...............33
SECTION 2.08 Outstanding Senior Subordinated Securities...............34
SECTION 2.09 Temporary Senior Subordinated Securities.................34
SECTION 2.10 Cancellation.............................................34
SECTION 2.11 Defaulted Interest.......................................35
SECTION 2.12 CUSIP Numbers............................................35
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities...............................................35
SECTION 2.14 Special Transfer Provisions..............................36
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes....................................................37
ARTICLE III REDEMPTION.....................................................................37
SECTION 3.01 Notices to Trustee.......................................37
SECTION 3.02 Selection................................................37
SECTION 3.03 Notice...................................................38
SECTION 3.04 Effect of Notice of Redemption...........................39
SECTION 3.05 Deposit of Redemption Price..............................39
SECTION 3.06 Senior Subordinated Securities Redeemed in Part..........39
SECTION 3.07 Optional Redemption......................................39
SECTION 3.08 Mandatory Redemption.....................................40
SECTION 3.09 Senior Subordinated Securities Acquired by the
Company..................................................40
ARTICLE IV COVENANTS.......................................................................40
SECTION 4.01 Payment of Senior Subordinated Securities................40
SECTION 4.02 Reports..................................................41
SECTION 4.03 Incurrence of Indebtedness...............................41
SECTION 4.04 Restricted Payments......................................41
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries.............................................43
SECTION 4.06 Asset Sales..............................................44
SECTION 4.07 Maximum Total Leverage Ratio.............................47
SECTION 4.08 Transactions with Affiliates.............................47
SECTION 4.09 Change of Control........................................48
SECTION 4.10 Compliance Certificate...................................51
SECTION 4.11 Maintenance of Properties and Insurance .................51
SECTION 4.12 Limitation on Liens......................................52
SECTION 4.13 Additional Subsidiary Guarantees.........................52
SECTION 4.14 No Layering..............................................53
SECTION 4.15 Capital Expenditures.....................................53
SECTION 4.16 Conduct of Business......................................53
SECTION 4.17 Environmental Matters....................................53
SECTION 4.18 Environmental Release....................................53
SECTION 4.19 Compliance with Laws.....................................53
SECTION 4.20 Payment of Taxes and Other Claims........................54
SECTION 4.21 Notice of Defaults.......................................54
SECTION 4.22 Waiver of Stay, Extension or Usury Laws..................54
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries............54
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries .........................................................54
SECTION 4.25 Maintenance of Office or Agency..........................56
SECTION 4.26 Corporate Existence......................................56
ARTICLE V SUCCESSOR COMPANY................................................................56
SECTION 5.01 Merger, Consolidation or Sale of All or Substantially
All Assets of the Company................................56
SECTION 5.02 Merger or Consolidation of a Guarantor...................58
ARTICLE VI DEFAULTS AND REMEDIES...........................................................58
SECTION 6.01 Events of Default and Remedies...........................58
SECTION 6.02 Acceleration.............................................60
SECTION 6.03 Other Remedies...........................................61
SECTION 6.04 Waiver of Past Defaults..................................61
SECTION 6.05 Control by Majority......................................61
SECTION 6.06 Limitation on Suits......................................62
SECTION 6.07 Rights of Holders to Receive Payment.....................62
SECTION 6.08 Collection Suit by Trustee...............................62
SECTION 6.09 Trustee May File Proofs of Claim.........................62
SECTION 6.10 Priorities...............................................63
SECTION 6.11 Undertaking for Costs....................................63
ARTICLE VII THE TRUSTEE....................................................................64
SECTION 7.01 Duties of Trustee........................................64
SECTION 7.02 Rights of Trustee........................................65
SECTION 7.03 Individual Rights of Trustee.............................66
SECTION 7.04 Trustee's Disclaimer.....................................66
SECTION 7.05 Notice of Defaults.......................................66
SECTION 7.06 Reports by Trustee to Holders............................66
SECTION 7.07 Compensation and Indemnity...............................67
SECTION 7.08 Replacement of Trustee...................................68
SECTION 7.09 Successor Trustee by Merger..............................69
SECTION 7.10 Eligibility; Disqualification............................69
SECTION 7.11 Preferential Collection of Claims Against Company........69
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................................70
SECTION 8.01 Legal Defeasance and Covenant Defeasance.................70
SECTION 8.02 Conditions to Legal or Covenant Defeasance...............71
SECTION 8.03 Deposited Money and Government Senior
Subordinated Securities to be Held in Trust; Other
Miscellaneous Provisions.................................72
SECTION 8.04 Repayment to Company.....................................72
SECTION 8.05 Reinstatement............................................72
SECTION 8.06 Satisfaction and Discharge of Indenture..................73
ARTICLE IX AMENDMENTS......................................................................74
SECTION 9.01 Without Consent of Holders...............................74
SECTION 9.02 With Consent of Holders..................................75
SECTION 9.03 Compliance with Trust Indenture Act......................76
SECTION 9.04 Revocation and Effect of Consents and Waivers............76
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities...............................................76
SECTION 9.06 Trustee To Sign Amendments...............................77
SECTION 9.07 Payment for Consent......................................77
ARTICLE X SUBORDINATION OF SENIOR SUBORDINATED SECURITIES..................................77
SECTION 10.01 Senior Subordinated Securities Subordinated to Senior
Debt.....................................................77
SECTION 10.02 No Payment on Securities in Certain Circumstances........78
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc...........79
SECTION 10.04 Subrogation..............................................80
SECTION 10.05 Obligations of the Company Unconditional ................81
SECTION 10.06 Notice to Trustee........................................81
SECTION 10.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................82
SECTION 10.08 Trustee's Relation to Senior Debt........................82
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.......83
SECTION 10.10 Holders Authorize Trustee To Effectuate Subordination
of Senior Subordinated Securities........................83
SECTION 10.11 This Article Not To Prevent Events of Default............83
SECTION 10.12 Trustee's Compensation Not Prejudiced....................83
SECTION 10.13 No Waiver of Subordination Provisions....................83
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................84
SECTION 10.15 Amendments...............................................84
ARTICLE XI SUBSIDIARY GUARANTEES...........................................................84
SECTION 11.01 Subsidiary Guarantees....................................84
SECTION 11.02 Limitation on Liability..................................86
SECTION 11.03 Successors and Assigns...................................86
SECTION 11.04 No Waiver................................................86
SECTION 11.05 Release of Guarantors....................................86
SECTION 11.06 Modification.............................................87
ARTICLE XII SUBORDINATION OF SUBSIDIARY GUARANTEES.........................................87
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt..............................................87
SECTION 12.02 No Payment on Securities in Certain Circumstances........89
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc...........90
SECTION 12.04 Subrogation..............................................91
SECTION 12.05 Obligations of the Guarantors Unconditional..............91
SECTION 12.06 Notice to Trustee........................................91
SECTION 12.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................92
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt..............92
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Debt..............................................93
SECTION 12.10 Holders Authorize Trustee To Effectuate Subordination
of Subsidiary Guarantees.................................93
SECTION 12.11 This Article Not To Prevent Events of Default............93
SECTION 12.12 Trustee's Compensation Not Prejudiced....................93
SECTION 12.13 No Waiver of Subordination Provisions....................93
SECTION 12.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................94
SECTION 12.15 Amendments...............................................94
ARTICLE XIII MISCELLANEOUS.................................................................94
SECTION 13.01 Trust Indenture Act Controls.............................94
SECTION 13.02 Notices..................................................94
SECTION 13.03 Communication by Holders with Other Holders..............95
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.......95
SECTION 13.05 Statements Required in Certificate or Opinion............96
SECTION 13.06 When Senior Subordinated Securities Disregarded..........96
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar.............96
SECTION 13.08 Legal Holidays...........................................96
SECTION 13.09 GOVERNING LAW............................................97
SECTION 13.10 Submission to Jurisdiction...............................97
SECTION 13.11 No Recourse Against Others...............................97
SECTION 13.12 Successors...............................................97
SECTION 13.13 Multiple Originals.......................................97
SECTION 13.14 Table of Contents; Headings..............................97
SECTION 13.15 Severability.............................................97
</TABLE>
EXHIBITS
EXHIBIT A - Form Of Senior Subordinated Note
EXHIBIT B - Form Of Rollover Note
EXHIBIT C - Global Senior Subordinated Securities Legend
Exhibit 10.4
MACK PRINTING COMPANY
SENIOR SUBORDINATED INCREASING RATE NOTES, SERIES C
INDENTURE
DATED AS OF APRIL 1, 1999
WILMINGTON TRUST COMPANY,
TRUSTEE
<PAGE>
INDENTURE, dated as of April 1, 1999, among MACK PRINTING
COMPANY, a Pennsylvania corporation (the "Issuer"), the GUARANTORS (as defined
herein) and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee
(the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Issuer's Senior
Subordinated Increasing Rate Notes, Series C, issued pursuant to this Indenture
on the date hereof and guaranteed by the Guarantors (the "Senior Subordinated
Notes"), (ii) any Roll-Over Notes (as defined herein) that may be issued upon
the Initial Maturity Date (as defined herein) and (iii) any Exchange Notes or
Private Exchange Notes (each as defined herein) if and when issued as provided
in the Registration Rights Agreement (as defined herein) in exchange for any
Roll-Over Notes. The Senior Subordinated Notes, any Roll-Over Notes, any
Exchange Notes and any Private Exchange Notes, treated as one class, are
collectively referred to as the "Senior Subordinated Securities."
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
Cadmus or at the time it merges or consolidates with or into Cadmus or any of
its Restricted Subsidiaries or that is assumed in connection with the
acquisition of assets from such Person, in each case, not Incurred by such
Person in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of Cadmus or such acquisition, merger or
consolidation.
"ACQUISITION" means the acquisition contemplated by the Stock Purchase
Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and
the terms "controlling" and "controlled" have meanings correlative of the
foregoing. Notwithstanding the foregoing, no Person (other than Cadmus or any
Subsidiary of Cadmus) in whom a Securitization Entity makes an Investment in
connection with a Qualified Securitization Transaction shall be deemed to be an
Affiliate of Cadmus or any of its Subsidiaries solely by reason of such
Investment.
"APPLICABLE CALL PREMIUM" means, as of a particular date, the
number set forth opposite such date in the table below, expressed as a
percentage of the principal amount of the Roll-Over Notes or Exchange Notes, as
the case may be.
REDEMPTION DATE PREMIUM
2004.............................................. 107.000%
2005.............................................. 104.667%
2006.............................................. 102.333%
2007 and thereafter............................... 100.000%
"ASSET ACQUISITION" means (a) an Investment by Cadmus or any Restricted
Subsidiary of Cadmus in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of Cadmus or of any Restricted Subsidiary of
Cadmus, or shall be merged with or into Cadmus or any Restricted Subsidiary of
Cadmus, or (b) the acquisition by Cadmus or any Restricted Subsidiary of Cadmus
of the assets of any Person (other than a Restricted Subsidiary of Cadmus) which
constitute all or substantially all of the assets of such Person or comprises
any division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by Cadmus or any of its
Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any
Person other than Cadmus or a Wholly Owned Restricted Subsidiary of Cadmus of
(a) any Capital Stock of any Restricted Subsidiary of Cadmus or (b) any other
property or assets of Cadmus or any Restricted Subsidiary of Cadmus other than
in the ordinary course of business. Notwithstanding the foregoing, the following
shall not be deemed to be Asset Sales: (w) a transaction or series of related
transactions for which Cadmus or its Restricted Subsidiaries receive aggregate
consideration of less than $250,000; (x) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of
Cadmus as permitted by Section 5.01; (y) sales of accounts receivable and
related assets (including contract rights) of the type specified in the
definition of "Qualified Securitization Transaction" to a Securitization Entity
for the fair market value thereof, including cash in an amount at least equal to
75% of the fair market value thereof as determined in accordance with GAAP (for
the purposes of this clause (y), Purchase Money Notes shall be deemed to be
cash); and (z) transfers of accounts receivable and related assets (including
contract rights) of the type specified in the definition of Qualified
Securitization Transaction (or a fractional undivided interest therein) by a
Securitization Entity in a Qualified Securitization Transaction.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banking institutions in the State of Delaware or the City of New York
are authorized or required by law or governmental action to be closed.
"CADMUS" means Cadmus Communications Corporation, a Virginia corporation
or any successor thereto permitted by the applicable provisions of this
Indenture.
"CAPITAL EXPENDITURES" means, for any period, the sum of all capital
expenditures Incurred during such period by Cadmus and its Consolidated
Subsidiaries (other than capitalized interest), as determined in accordance with
GAAP
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing regulations and
amendments.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of
Cadmus to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group"), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of this Indenture); (ii) the
approval by the holders of Capital Stock of Cadmus of any plan or proposal for
the liquidation or dissolution of Cadmus (whether or not otherwise in compliance
with the provisions of this Indenture); (iii) any Person or Group is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 14(d) 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), directly or
indirectly, of more than 50% of the total Voting Stock of Cadmus, measured by
voting power rather than number of shares; (iv) the first day on which a
majority of the members of the Board of Directors of Cadmus are not Continuing
Directors; or (v) Cadmus consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into, Cadmus, in any such
event pursuant to a transaction in which any of the outstanding Voting Stock of
Cadmus is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of Cadmus outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Capital Stock) of the surviving or transferee
Person constituting a majority of such Voting Stock of such surviving or
transferee Person, measured by voting power rather than number of shares
(immediately after giving effect to such issuance).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"CONSOLIDATED CASH FLOW" means, for any period, the sum, without
duplication, of (a) Consolidated Net Income for such period, (b) taxes on income
of Cadmus and its Consolidated Subsidiaries for such period to the extent
deducted in determining Consolidated Net Income for such period, (c) interest
expensed in respect of Indebtedness of Cadmus or any of its Consolidated
Subsidiaries (other than any Obligations of Cadmus or such Consolidated
Subsidiaries under Currency Agreements or Interest Swap Agreements) outstanding
during such period, PROVIDED that there shall be excluded from such interest
amount any amount that would otherwise be included therein with respect to the
non-cash amortization of deferred financing costs, (d) book depreciation
expenses of Cadmus and its Consolidated Subsidiaries for such period, and (e)
amortization of intangible assets of Cadmus and its Consolidated Subsidiaries
for such period, all determined with respect to Cadmus and its Consolidated
Subsidiaries on a consolidated basis for such period and in accordance with
GAAP. In determining Consolidated Cash Flow for any period, (i) any Consolidated
Subsidiary acquired during such period by Cadmus or any other Consolidated
Subsidiary shall be included on a PRO FORMA, historical basis as if it had been
a Consolidated Subsidiary during such entire period, (ii) any amounts which
would be included in a determination of Consolidated Cash Flow for such period
with respect to assets acquired during such period by Cadmus or any Consolidated
Subsidiary shall be included in the determination of Consolidated Cash Flow for
such period and the amount thereof shall be calculated on a PRO FORMA,
historical basis as if such assets had been acquired by Cadmus or such
Consolidated Subsidiary prior to the first day of such period, (iii) any
Consolidated Subsidiary sold during such period by Cadmus or any other
Consolidated Subsidiary shall be excluded as if it had not been a Consolidated
Subsidiary at any time during such period, and (iv) any amounts which would be
otherwise included in a determination of Consolidated Cash Flow for such period
with respect to assets sold or otherwise disposed of during such period by
Cadmus or any Consolidated Subsidiary shall be excluded in the determination of
Consolidated Cash Flow for such period and the amount excluded shall be
calculated as if such assets had been sold or otherwise disposed of by Cadmus or
such Consolidated Subsidiary prior to the first day of such period; provided
that for each fiscal quarter of Cadmus ending June 30, 1999, September 30, 1999
and December 31, 1999, Consolidated Cash Flow shall be increased by the amount
of the Net Cash Flow Adjustment for such fiscal quarter of Cadmus.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the
extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes
of such Person and its Restricted Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges LESS any non-cash items
increasing Consolidated Net Earnings for such period, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in accordance
with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the "Transaction
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a PRO FORMA basis (in accordance with Article
11 of Regulation S-X under the Securities Act) for the period of such
calculation to (i) the Incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and any
Incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the Incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital or revolving credit facilities, occurring during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such Incurrence or repayment, as the case
may be (and the application of the proceeds thereof), had occurred on the first
day of the Four Quarter Period and (ii) 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 of such
Person arising as a result of the Asset Acquisition) Incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any PRO FORMA expense and cost reductions
calculated in accordance with Article 11 of Regulation S-X under the Securities
Act) attributable to the assets which are the subject of the Asset Acquisition
or Asset Sale or other disposition during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or other disposition or Asset Acquisition (including the Incurrence,
assumption or liability for any such Acquired Indebtedness) occurred on the
first day of the Four Quarter Period. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the Incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly Incurred or otherwise assumed such guaranteed Indebtedness. If, since
the beginning of such Four Quarter Period, any Person (that subsequently became
a Restricted Subsidiary of Cadmus or was merged with or into Cadmus or any
Restricted Subsidiary of Cadmus since the beginning of such Four Quarter Period)
shall have made any Asset Sale or other disposition or Asset Acquisition that
would have required adjustment pursuant to this definition, then the
Consolidated Fixed Charge Coverage Ratio shall be calculated giving PRO FORMA
effect thereto (in accordance with Article 11 of Regulation S-X under the
Securities Act) as if such Asset Sale or other disposition or Asset Acquisition
had occurred at the beginning of the applicable Four Quarter Period.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of the "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 agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock) paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of which
is one minus the then current effective consolidated federal, state and local
tax rate of such Person, expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount and amortization or write-off
of deferred financing costs, (b) the net costs under Interest Swap Obligations,
(c) all capitalized interest and (d) the interest portion of any deferred
payment obligation; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET EARNINGS" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom: (a) after-tax gains
from Asset Sales (without regard to the $250,000 limitation set forth in the
definition thereof) or abandonments or reserves relating thereto; (b) after-tax
items classified as extraordinary, unusual or nonrecurring gains; (c) the net
income of any Person acquired in a "pooling of interests" transaction accrued
prior to the date it becomes a Restricted Subsidiary of the referent Person or
is merged or consolidated with the referent Person or any Restricted Subsidiary
of the referent Person; (d) the net income (but not loss) of any Restricted
Subsidiary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by a contract, operation of law or otherwise; (e) the net income
of any Person, other than a Restricted Subsidiary of the referent Person, except
to the extent of cash dividends or distributions paid to the referent Person or
to a Wholly Owned Restricted Subsidiary of the referent Person by such Person;
(f) any restoration of income of any contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Earnings
accrued at any time following the Issue Date; (g) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period, whether or not such operations were classified as
discontinued); and (h) 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 Person prior to such consolidation, merger or transfer
of assets.
"CONSOLIDATED NET INCOME" means, for any period, the Net Income of
Cadmus and its Consolidated Subsidiaries determined on a consolidated basis, but
excluding (i) any non-cash restructuring and/or integration charges taken by
Cadmus in connection with the transactions described in the Stock Purchase
Agreement up to an aggregate amount of $12.0 million, (ii) extraordinary items
and (iii) any equity interests of Cadmus or any Subsidiary of Cadmus in the
unremitted earnings of any Person that is not a Subsidiary of Cadmus.
"CONSOLIDATED NET WORTH" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash charges
and expenses of such Person and its Restricted Subsidiaries reducing
Consolidated Net Earnings of such Person and its Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary item or loss or any
such charge which requires an accrual of or a reserve for cash charges for any
future period).
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary of Cadmus or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of Cadmus in its consolidated financial statements as of
such date.
"CONSOLIDATED TOTAL DEBT" means, at any date, the aggregate Indebtedness
of Cadmus and its Consolidated Subsidiaries plus all Securitization Facility
Attributed Debt, determined on a consolidated basis as of such date.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of Cadmus who: (1) was a member of such Board
of Directors on the Issue Date; or (2) was nominated for election or elected to
the Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date of execution of this Indenture,
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001.
"CREDIT AGREEMENT" means the Credit Agreement dated as of April 1, 1999,
among Cadmus, the lenders party thereto in their capacities as lenders
thereunder, NationsBank, N.A., as Documentation Agent, First Union National
Bank, as Syndication Agent, and Wachovia Bank, N.A., as Agent, together with the
related documents thereto (including 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 or adding Restricted Subsidiaries of Cadmus as
additional borrowers or guarantors thereof) 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.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect Cadmus
or any Restricted Subsidiary of Cadmus against fluctuations in currency values.
"CUSTODIAN" means the custodian with respect to any Global Senior
Subordinated Security (as appointed by the Depositary), or any successor entity
thereto as provided in Section 2.03.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to the Senior Subordinated Securities
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 as the Depositary with respect to the Senior Subordinated
Securities, until a successor shall have been appointed and become such pursuant
to the applicable provisions of this Indenture, and thereafter, "Depositary"
shall mean or include such successor.
"DESIGNATED GUARANTOR SENIOR DEBT" means (i) Indebtedness of a Guarantor
under or in respect of the Credit Agreement, (ii) Indebtedness of a Guarantor
under or in respect of the Series A Indenture and (iii) any other Indebtedness
constituting Guarantor Senior Debt which, at the time of determination, has an
aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Guarantor Senior Debt as
"Designated Guarantor Senior Debt."
"DESIGNATED SENIOR DEBT" means (i) Indebtedness of Cadmus under or in
respect of the Credit Agreement, (ii) Indebtedness of Cadmus under or in respect
of the Series A Indenture and (iii) any other Indebtedness constituting Senior
Debt which, at the time of determination, has an aggregate principal amount of
at least $25.0 million and is specifically designated in the instrument
evidencing such Senior Debt as "Designated Senior Debt."
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof on or prior to the final maturity date
of the Senior Subordinated Securities. Notwithstanding the preceding sentence,
any Capital Stock that would constitute Disqualified Capital Stock solely
because the holders thereof have the right to require Cadmus to repurchase such
Capital Stock upon the occurrence of a change of control or asset sale shall not
constitute Disqualified Capital Stock if the terms of such Capital Stock provide
that Cadmus may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.04 of
this Indenture.
"DOLLARS" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of
Cadmus that is incorporated or otherwise organized under the laws of the United
States or any State thereof or the District of Columbia.
"ENVIRONMENTAL AUTHORITY" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"ENVIRONMENTAL RELEASES" means releases as defined by CERCLA or under
any applicable state or local environmental law or regulation.
"ENVIRONMENTAL REQUIREMENTS" means any legal requirement relating to
health, safety or the environment and applicable to Cadmus, any Subsidiary of
Cadmus or the Properties, including but not limited to any such requirement
under CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"EXCHANGE NOTES" means the Issuer's Senior Subordinated Notes due 2009
issued in exchange for the Roll-Over Notes pursuant to the Registration Rights
Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of Cadmus acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of Cadmus delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GLOBAL SENIOR SUBORDINATED SECURITIES LEGEND" means the legend set
forth in Exhibit C.
"GLOBAL SENIOR SUBORDINATED SECURITY" means a Senior Subordinated
Security that bears the Global Senior Subordinated Securities Legend.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letter of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"GUARANTEE" means a Guarantor Guaranty or a Subsidiary Guaranty.
"GUARANTOR" means (1) each of Cadmus, Cadmus Journal Services, Inc., a
Virginia corporation, Washburn Graphics, Inc., a North Carolina corporation,
American Graphics, Inc., a Georgia corporation, Expert Graphics, Inc., a
Virginia corporation, Cadmus Direct Marketing, Inc., a North Carolina
corporation, Three Score, Inc., a Georgia corporation, Port City Press, Inc., a
Maryland corporation, Mack Printing Group, Inc., a Delaware corporation, and
Science Craftsman Incorporated, a New York corporation, and (2) each of Cadmus'
Restricted Subsidiaries that in the future executes a supplemental indenture in
which such Restricted Subsidiary agrees to be bound by the terms of this
Indenture as a Guarantor; PROVIDED that any Person constituting a Guarantor as
described above shall cease to constitute a Guarantor when its respective
Guarantee is released in accordance with the terms of this Indenture.
"SUBSIDIARY GUARANTEE" means any guarantee of the Senior Subordinated
Securities by a Guarantor pursuant to Article XI.
"GUARANTOR SENIOR DEBT" means, with respect to any Subsidiary Guarantor,
the principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Subsidiary
Guarantor, whether outstanding on the Issue Date or thereafter created, Incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Subsidiary Guarantee of such Subsidiary Guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Debt" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of (1) all monetary obligations of every nature of such
Subsidiary Guarantor in respect of the Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities, (2) all monetary
obligations of every nature of such Guarantor in respect of the Series A
Indenture, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (3) all Interest Swap Obligations (including guarantees thereof),
and (4) all obligations under Currency Agreements (including guarantees
thereof), in each case, whether outstanding on the Issue Date or thereafter
Incurred. Notwithstanding the foregoing, "Guarantor Senior Debt," with respect
to any Guarantor, shall not include (i) any Indebtedness of such Subsidiary
Guarantor to a Subsidiary or Affiliate of such Subsidiary Guarantor, or any
Subsidiary of such Affiliate, (ii) Indebtedness to, or guaranteed on behalf of,
any shareholder, director, officer or employee of such Subsidiary Guarantor or
any Subsidiary of such Guarantor (including, without limitation, amounts owed
for compensation), (iii) Indebtedness to trade creditors and other amounts
Incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock, (v) any liability for
federal, state, local or other taxes owed or owing by such Subsidiary Guarantor,
(vi) that portion of Indebtedness Incurred in violation of the provisions of
Section 4.03 (but, as to any such obligation, no such violation shall be deemed
to exist for purposes of this clause (vi) if the holder(s) of such obligation or
their representative and the Trustee shall have received an Officers'
Certificate of Cadmus to the effect that the Incurrence of such Indebtedness
does not (or, in the case of revolving credit indebtedness, that the Incurrence
of the entire committed amount thereof at the date on which the initial
borrowing thereunder is made would not) violate such provisions of this
Indenture), (vii) Indebtedness which, when Incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to such Subsidiary Guarantor, and (viii) any Indebtedness which is, by
its express terms, subordinated in right of payment to any other Indebtedness of
such Subsidiary Guarantor.
"HAZARDOUS MATERIALS" means, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, 42
U.S.C. ss.6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) any "hazardous substance",
"pollutant" or "containment", as defined in CERCLA, or in any applicable state
or local law regulation, (c) gasoline, or any other petroleum product or
by-product, including crude oil or any fraction thereof, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any applicable
state or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time.
"HOLDER" OR "SENIOR SUBORDINATED SECURITYHOLDER" means the Person in
whose name a Senior Subordinated Security is registered on the Registrar's
books.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all Obligations of such Person for borrowed money, (ii) all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all Obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all Obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person and (ix) all Disqualified Capital Stock issued by
such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to any
provision hereof, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT FINANCIAL ADVISOR" means a nationally recognized investment
banking or accounting firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
Cadmus or any of its Subsidiaries and (ii) which, in the judgment of the Board
of Directors of Cadmus, is otherwise independent and qualified to perform the
task for which it is to be engaged.
"INITIAL MATURITY DATE" means April 1, 2000, the maturity date of the
Senior Subordinated Notes; PROVIDED, that if on such date there exists any
Default under Section 6.01(a), (c), (d), (e) or (h) but any applicable grace
period has not expired as of such date, the Initial Maturity Date shall be
postponed until the earlier to occur of (i) the date on which all such Defaults
are cured and (ii) the date on which any such grace period expires.
"INTEREST" means, with respect to any Senior Subordinated Security, the
sum of cash interest and any Additional Interest (as defined in the Registration
Rights Agreement) on such Senior Subordinated Securities.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including a guarantee) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any
Person. "Investment" shall exclude extensions of trade credit by Cadmus and its
Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of Cadmus or such Restricted Subsidiary, as the case may
be. If Cadmus or any Restricted Subsidiary of Cadmus sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of Cadmus
such that, after giving effect to any such sale or disposition, such Restricted
Subsidiary is no longer a Subsidiary of Cadmus, Cadmus 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 the date of original issuance of the Senior
Subordinated Notes.
"ISSUER" means the party named as such in the introductory paragraphs of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and thereafter, means such successor.
"JUNIOR SUBORDINATED NOTES" means, collectively, the three (3) 11.5%
subordinated promissory notes due March 31, 2010 of Cadmus.
"LIBOR PERIOD" means each period which begins on the last day of the
immediately preceding LIBOR Period (or, in the case of the first LIBOR Period,
which begins on the Issue Date) and ends on the date occurring ninety (90) days
thereafter; provided that if such date is not a Business Day, the respective
LIBOR Period shall end on the next succeeding Business Day.
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"NET CASH FLOW ADJUSTMENT" means, for any period, solely for calculating
Consolidated Cash Flow for any four fiscal quarter period of Cadmus ending on or
before the first anniversary of the Issue Date, an amount (up to a maximum
amount of $3,034,000 for any such four fiscal quarter period) equal to any
quantifiable cost savings, the amount of which Cadmus demonstrates in reasonable
detail to the agent under the Credit Agreement as having been realized by Cadmus
and its Subsidiaries as a result of, or in connection with, the Acquisition,
such cost savings in each case to be given PRO FORMA effect as if they had been
realized commencing as of the beginning of the third fiscal quarter of Cadmus
immediately preceding the fiscal quarter in which Cadmus demonstrates such cost
savings to the agent under the Credit Agreement (in each case without
duplication of any amounts already included in Consolidated Cash Flow for the
relevant period or any portion thereof).
"NET CASH PROCEEDS" means, (a) with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by Cadmus or any of its Subsidiaries from such Asset Sale net
of (i) reasonable out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions); (ii) taxes paid or payable relating to such Asset Sale
after taking into account any reduction in consolidated tax liability due to
available tax credits or deductions and any tax sharing arrangements; (iii) the
repayment of Indebtedness that is secured by such assets in accordance with the
terms of any Lien upon or with respect to such assets; and (iv) appropriate
amounts to be provided by Cadmus or any Restricted Subsidiary of Cadmus, as the
case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by Cadmus or any Restricted
Subsidiary of Cadmus, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, and (b) with
respect to any issuance or sale of Take-Out Securities by any Person, the
proceeds of such Incurrence, issuance or sale in the form of cash or Cash
Equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received by such Person in the form of cash or Cash Equivalents and
proceeds from the conversion of other property received by such Person when
converted to cash or Cash Equivalents, net of reasonable out-of-pocket fees and
expenses (including reasonable attorneys' fees, accountants' fees, underwriters'
or placement agents' fees, discounts or commissions and reasonable brokerage,
consultant and other fees) Incurred in connection with such Incurrence, issuance
or sale.
"NET INCOME" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or the Controller of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
such Person that meets the requirements set forth in Sections 13.04 and 13.05 of
this Indenture.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to Cadmus or the Trustee.
"PARTICIPATING SUBSIDIARY" means any Subsidiary of Cadmus that is a
participant in a Permitted Securitization.
"PERMITTED BUSINESS" means any business (including stock or assets) that
derives its revenues from the business engaged in by Cadmus and its Restricted
Subsidiaries on the Issue Date and/or activities that are reasonably similar,
ancillary or related to, or a reasonable extension, development or expansion of,
the businesses in which Cadmus and its Restricted Subsidiaries are engaged on
the Issue Date.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(i) Indebtedness under the Senior Subordinated Securities, the
Series A Securities, the Series B Securities, this Indenture, the Series
A Indenture, the Series B Indenture, the Subsidiary Guarantees and the
Guarantor Guarantees.
(ii) Indebtedness Incurred by Cadmus pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed $200.0 million, reduced by (a) the amount of all mandatory
principal payments actually made by Cadmus in respect of term loans
thereunder; (b) the amount of all required permanent repayments, if any
(which are accompanied by a corresponding permanent commitment
reduction), thereunder; and (c) the aggregate amount of Indebtedness of
Securitization Entities in Qualified Securitization Transactions at the
time outstanding, to the extent that the net proceeds from such
Indebtedness are not used (within 5 Business Days of the Incurrence of
such Indebtedness) to make mandatory principal payments or required
permanent repayments in accordance with clauses (a) and (b) above;
(iii) other Indebtedness of Cadmus and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually
paid or permanent reductions thereof;
(iv) Interest Swap Obligations of Cadmus or any of its Restricted
Subsidiaries covering Indebtedness of Cadmus or any of its Restricted
Subsidiaries; PROVIDED that such Interest Swap Obligations are entered
into to protect Cadmus and its Restricted Subsidiaries from fluctuations
in interest rates on Indebtedness Incurred in accordance with this
Indenture to the extent that the notional principal amount of any such
Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(v) Indebtedness of Cadmus or any of its Restricted Subsidiaries
under Currency Agreements; PROVIDED that such Currency Agreements are
entered into to protect Cadmus and its Restricted Subsidiaries from
fluctuations in the value of foreign currencies purchased or received in
the ordinary course of business; PROVIDED, FURTHER, that, in the case of
Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of Cadmus and its Restricted
Subsidiaries outstanding other than as a result of fluctuations of
foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of
Cadmus to Cadmus or to a Wholly Owned Restricted Subsidiary of Cadmus
for so long as such Indebtedness is held by Cadmus or a Wholly Owned
Restricted Subsidiary of Cadmus, in each case subject to no Lien held by
a Person other than Cadmus or a Wholly Owned Restricted Subsidiary of
Cadmus; PROVIDED that if as of any date any Person other than Cadmus or
a Wholly Owned Restricted Subsidiary of Cadmus owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the Incurrence of Indebtedness not constituting
Permitted Indebtedness by the issuer of such Indebtedness;
(vii) Indebtedness of Cadmus to a Wholly Owned Restricted
Subsidiary of Cadmus for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of Cadmus, in each case subject to no
Lien; PROVIDED that (a) any Indebtedness of Cadmus to any Wholly Owned
Restricted Subsidiary of Cadmus that is not a Guarantor is unsecured and
subordinated, pursuant to a written agreement, to Cadmus' Obligations
under this Indenture and the Senior Subordinated Securities and (b) if
as of any date any Person other than a Wholly Owned Restricted
Subsidiary of Cadmus owns or holds any such Indebtedness or any Person
holds a Lien in respect of such Indebtedness, such date shall be deemed
the Incurrence of Indebtedness not constituting Permitted Indebtedness
by Cadmus;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two Business Days
of Incurrence;
(ix) Indebtedness of Cadmus or any of its Restricted Subsidiaries
represented by letters of credit for the account of Cadmus or such
Restricted Subsidiary, as the case may be, in order to provide security
for workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of
business;
(x) Refinancing Indebtedness;
(xi) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Indebtedness of Cadmus and its Restricted
Subsidiaries Incurred in the ordinary course of business not to exceed
$5.0 million at any one time outstanding;
(xii) the Incurrence by a Securitization Entity of Indebtedness
in a Qualified Securitization Transaction that is without recourse to
Cadmus or any Subsidiary of Cadmus (except for Standard Securitization
Undertakings);
(xiii) so long as no Senior Subordinated Note, Series A Note or
Series B Note is then outstanding, additional Indebtedness of Cadmus and
its Restricted Subsidiaries in an aggregate principal amount not to
exceed $10.0 million at any one time outstanding (which amount may, but
need not, be Incurred in whole or in part under the Credit Agreement);
and
(xiv) Indebtedness under the Take-Out Senior Subordinated Debt
and any guarantees thereof.
For purposes of determining compliance with Section 4.03, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xi),
(xiii) and (xiv) above or is otherwise entitled to be Incurred pursuant to
Section 4.03(a), Cadmus shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with such
Section. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Capital Stock will not be deemed to be an Incurrence of Indebtedness of an
issuance of Disqualified Capital Stock for purposes of Section 4.03. The amount
of Indebtedness issued at a price that is either less or greater than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
"PERMITTED INVESTMENTS" means: (i) Investments by Cadmus or any
Restricted Subsidiary of Cadmus in any Wholly Owned Restricted Subsidiary of
Cadmus that is the Issuer or a Guarantor or any Person if as a result of such
Investment such Person shall become a Wholly Owned Restricted Subsidiary of
Cadmus that is the Issuer or a Guarantor or will merge or consolidate with or
into Cadmus or a Wholly Owned Restricted Subsidiary of Cadmus that is the Issuer
or a Guarantor; (ii) Investments in Cadmus by any Restricted Subsidiary of
Cadmus; PROVIDED that any Indebtedness evidencing such Investment is unsecured
and subordinated, pursuant to a written agreement and to the same extent that
the Series A Securities, Series B Securities and Senior Subordinated Securities
are subordinated to Senior Debt, to Cadmus' Obligations under or in respect of
the Series A Securities, Series B Securities and the Senior Subordinated
Securities and the Series A Indenture, the Series B Indenture and this
Indenture; (iii) Investments in cash and Cash Equivalents; (iv) loans and
advances to employees and officers of Cadmus and its Restricted Subsidiaries in
the ordinary course of business for bona fide business purposes in an aggregate
principal amount not to exceed $2.0 million at any one time outstanding; (v)
Currency Agreements and Interest Swap Obligations entered into in the ordinary
course of Cadmus' or its Restricted Subsidiaries' businesses and otherwise in
compliance with this Indenture; (vi) 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; (vii) Investments made by Cadmus or its Restricted Subsidiaries as a
result of consideration received in connection with an Asset Sale made in
compliance with the provisions of Section 4.06; (viii) additional Investments
having an aggregate fair market value, when taken together with all other
Investments made pursuant to this clause (viii) that are at that time
outstanding, not to exceed $5.0 million (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (ix) any Investment by Cadmus or a Restricted
Subsidiary of Cadmus in a Securitization Entity or any Investment by a
Securitization Entity in any other Person in connection with a Qualified
Securitization Transaction; PROVIDED that any Investment in a Securitization
Entity is in the form of a Purchase Money Note or an equity interest; and (x)
Investments in Permitted Businesses made by Cadmus or any Wholly Owned
Restricted Subsidiary of Cadmus that is a Guarantor having an aggregate fair
market value, when taken together with all other Investments made pursuant to
this clause (x) after the Issue Date, not to exceed $5.0 million (with the fair
market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value).
"PERMITTED LIENS " means the following types of Liens:
(i) Liens securing Senior Debt and Guarantor Senior Debt
(including Liens securing Indebtedness outstanding under the Credit
Agreement) to the extent that the Indebtedness secured thereby is
permitted to be Incurred pursuant to Section 4.03;
(ii) Liens securing the Series A Securities, the Series B
Securities and Senior Subordinated Securities and the Guarantor
Guarantees;
(iii) Liens in favor of Cadmus or any Wholly Owned Restricted
Subsidiary of Cadmus on assets of any Restricted Subsidiary of Cadmus;
(iv) Liens existing on the Issue Date securing Indebtedness
existing on the Issue Date to the extent and in the manner such Liens
are in effect on the Issue Date;
(v) Liens securing Refinancing Indebtedness which is Incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this Indenture and which has been Incurred in accordance with the
provisions of this Indenture, PROVIDED that such Liens (a) are no less
favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced and (b) do not extend to or cover any property or
assets of Cadmus or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced;
(vi) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which Cadmus or any of its Restricted
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(vii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen and repairmen and other
Liens imposed by law Incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(viii) Liens Incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(ix) judgment Liens not giving rise to an Event of Default so
long as any 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;
(x) 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 Cadmus or any of its Restricted Subsidiaries;
(xi) any interest or title of a lessor under any Capitalized
Lease Obligation, PROVIDED that such Liens do not extend to any property
of asset which is not leased property subject to such Capitalized Lease
Obligation;
(xii) Liens securing Purchase Money Indebtedness of Cadmus or any
Restricted Subsidiary of Cadmus, PROVIDED that (a) the Purchase Money
Indebtedness shall not exceed the purchase price or the cost of
construction or improvement of such property or assets, as the case may
be, and shall not be secured by any property or assets of Cadmus or any
Restricted Subsidiary of Cadmus other than the property or assets so
acquired, constructed or improved and (b) the Lien securing such
Indebtedness shall be created within 90 days of such acquisition or
completion of construction or improvement;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other
goods;
(xiv) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xv) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of Cadmus or any of its Restricted Subsidiaries, including
rights of offset and set-off;
(xvi) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under this Indenture;
(xvii) Liens securing Indebtedness under Currency Agreements;
(xviii)Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of custom duties in connection with
the importation of goods;
(xix) Liens securing Acquired Indebtedness Incurred in compliance
with Section 4.03, PROVIDED that (a) such Liens secured such Acquired
Indebtedness at the time of and prior to the Incurrence of such Acquired
Indebtedness by Cadmus or a Restricted Subsidiary of Cadmus and were not
granted in anticipation of the Incurrence of such Acquired Indebtedness
by Cadmus or a Restricted Subsidiary of Cadmus and (b) such Liens do not
extend to or cover any property or assets of Cadmus or of any of its
Restricted Subsidiaries other than the property or assets that secured
the Acquired Indebtedness prior to the time such Indebtedness became
Acquired Indebtedness of Cadmus or a Restricted Subsidiary of Cadmus and
are no more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the Incurrence of such Acquired
Indebtedness by Cadmus or a Restricted Subsidiary of Cadmus; and
(xx) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case Incurred in connection
with a Qualified Securitization Transaction.
"PERMITTED SECURITIZATION" means any financing program providing for the
sale or transfer of Securitization Assets by Cadmus or its Participating
Subsidiaries, in transactions purporting to be sales (and treated as sales for
GAAP purposes) (1) to one or more limited purpose financing companies, special
purpose entities and/or other financial institutions; (2) in each case, on a
non-recourse basis as to Cadmus and the Participating Subsidiaries; and (3) in
each case, the fair market value of the Securitization Assets sold or
transferred, including cash in an amount at least equal to 75% of the fair
market value thereof, as determined in accordance with GAAP (for purposes of
this definition, Purchase Money Notes shall be deemed cash).
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization. trust or joint venture, or a
governmental agency or political subdivision thereof.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRIVATE EXCHANGE NOTES" means the "Private Exchange Notes," as defined
in the Registration Rights Agreement.
"PRODUCTIVE ASSETS" means properties and assets (including Capital
Stock) that are used or useful by Cadmus and its Restricted Subsidiaries in
Permitted Businesses.
"PROPERTIES" means all real property owned, leased or otherwise used or
occupied by Cadmus or any Subsidiary of Cadmus, wherever located.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of Cadmus and its
Restricted Subsidiaries Incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
construction or improvement, of property or equipment.
"PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity
evidencing a line of credit, which may be irrevocable, from Cadmus or any
Subsidiary of Cadmus in connection with a Qualified Securitization Transaction
to a Securitization Entity, which note shall be repaid from cash available to
the Securitization Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts paid
in connection with the purchase of newly generated receivables.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of Cadmus that is not
Disqualified Capital Stock.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series
of transactions that may be entered into by Cadmus or any of its Subsidiaries
pursuant to which Cadmus or any or its Subsidiaries may sell, convey or
otherwise transfer to (a) a Securitization Entity (in the case of a transfer by
Cadmus or any of its Subsidiaries) and (b) any other Person (in the case of a
transfer by a Securitization Entity), or may grant a security interest in, any
accounts receivable (whether now existing or arising in the future) of Cadmus or
any of its Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable, proceeds of such accounts receivable and other assets
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable.
"RECEIVABLES SUBSIDIARY" means a special purpose, bankruptcy remote
Wholly Owned Subsidiary of Cadmus which may be formed for the sole and exclusive
purpose of engaging in activities in connection with the purchase, sale and
financing of Securitization Assets in connection with and pursuant to a
Permitted Securitization.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness (the proceeds of which are applied within 60
days after the Incurrence thereof) in exchange or replacement for, such security
or Indebtedness in whole or in part. "Refinanced" and "Refinancing" have
correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by Cadmus or any
Restricted Subsidiary of Cadmus of Indebtedness Incurred in accordance with the
provisions of Section 4.03 (other than pursuant to clause (ii), (iv), (v), (vi),
(vii), (viii), (ix), (xi), (xii) or (xiii) of the definition of Permitted
Indebtedness), in each case that does not (1) directly or indirectly result in
an increase in the aggregate principal amount (or accreted value, if applicable)
of Indebtedness of Cadmus or such Restricted Subsidiary as of the date of such
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness and plus the amount of reasonable
fees and expenses Incurred by Cadmus or such Restricted Subsidiary in connection
with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average
Life to Maturity as of the date of such Refinancing that is less than the
Weighted Average Life to Maturity at such time of the Indebtedness being
Refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being Refinanced; PROVIDED that (x) such Refinancing Indebtedness
shall be Indebtedness solely by the obligor of the Indebtedness being Refinanced
and (y) if such Indebtedness being Refinanced is subordinate or junior to the
Series A Securities, Series B Securities and Senior Subordinated Securities or a
Guarantee, then such Refinancing Indebtedness shall be subordinate to the the
Series A Securities, Series B Securities and Senior Subordinated Securities or
such Guarantee, as the case may be, at least to the same extent and in the same
manner as the Indebtedness being Refinanced.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of April 1, 1999, among the Issuer, the Guarantors and the Holders.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative in respect of any Senior Debt or Guarantor Senior Debt; PROVIDED
that if, and for so long as, any Senior Debt or Guarantor Senior Debt lacks such
a representative, then the Representative for such Senior Debt or Guarantor
Senior Debt shall at all times constitute the holders of a majority in
outstanding principal amount of such Senior Debt or Guarantor Senior Debt in
respect of any Senior Debt or Guarantor Senior Debt.
"RESTRICTED SECURITIES LEGEND" means the legend to substantially the
following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE `SECURITIES ACT") OR ANY STATE SECURITIES LAWS, BUT HAS
BEEN ISSUED IN RELIANCE ON AN EXEMPTION FROM SUCH REGISTRATION, AND IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER DESCRIBED IN THE NOTE
PURCHASE AGREEMENT DATED APRIL 1, 1999, AMONG MACK PRINTING COMPANY, AND
GS MEZZANINE PARTNERS, L.P., GS MEZZANINE PARTNERS OFFSHORE, L.P., STONE
STREET FUND 1997, L.P. AND BRIDGE STREET FUND 1997, L.P. (THE "NOTE
PURCHASE AGREEMENT'). NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF (I) EXCEPT IN ACCORDANCE
WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE NOTE PURCHASE
AGREEMENT AND (II) PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION THEREFROM.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"ROLL-OVER NOTES" means any of the Issuer's Senior Subordinated Notes
due 2009 issued upon the Initial Maturity Date of the Senior Subordinated Notes
pursuant to the provisions of this Indenture and guaranteed by the Guarantors.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to Cadmus or a Restricted Subsidiary of Cadmus of any property,
whether owned by Cadmus or any Restricted Subsidiary of Cadmus at the Issue Date
or later acquired, which has been or is to be sold or transferred by Cadmus or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"SECURITIZATION ASSETS" means all accounts receivable (whether now
existing or arising in the future) of Cadmus or any of its Participating
Subsidiaries which are sold or transferred pursuant to a Permitted
Securitization, and any assets related thereto, including without limitation (i)
all collateral given by any of the foregoing, (ii) all contracts and all
guarantees (but not by Cadmus or any of its Subsidiaries) or other obligations
directly related to any of the foregoing, (iii) other related assets including
those set forth in the Securitization Documents, and (iv) proceeds of all of the
foregoing.
"SECURITIZATION DOCUMENTS" shall mean all documentation relating to any
Permitted Securitization.
"SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of Cadmus (or
another Person in which Cadmus or any Subsidiary of Cadmus makes an Investment
and to which Cadmus or any Subsidiary of Cadmus transfers accounts receivable
and related assets) 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 Cadmus (as provided below) as a Securitization Entity: (a) no
portion of the Indebtedness or any other obligation (contingent or otherwise) of
which (i) is guaranteed by Cadmus or any Subsidiary of Cadmus (excluding
guarantees of obligations (other than the principal of, and interest on,
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates Cadmus or any Subsidiary of Cadmus in any way other
than pursuant to Standard Securitization Undertakings or (iii) subjects any
property or asset of Cadmus or any Subsidiary of Cadmus, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings, (b) with which neither Cadmus nor any
Subsidiary of Cadmus has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to Cadmus or such Subsidiary
than those that might be obtained at the time from Persons that are not
Affiliates of Cadmus, other than fees payable in the ordinary course of business
in connection with servicing receivables of such entity, and (c) to which
neither Cadmus nor any Subsidiary of Cadmus has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of Cadmus shall be evidenced to the Trustee by filing with the Trustee
a Board Resolution of the Board of Directors of Cadmus giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"SECURITIZATION FACILITY ATTRIBUTED DEBT" at any time means, without
duplication, the aggregate net outstanding amount theretofore paid to the
Receivables Subsidiary, Cadmus or any Participating Subsidiary in respect of the
Securitization Assets sold or transferred by it in connection with a Permitted
Securitization (it being the intent of the parties that the amount of
Securitization Facility Attributed Debt at any time outstanding approximate as
closely as possible the principal amount of Indebtedness which would be
outstanding at such time under the Permitted Securitization if the same were
structured as a secured lending agreement rather than a purchase agreement).
"SENIOR DEBT" means, the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of Cadmus, whether outstanding on the Issue Date or thereafter
created, Incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Senior Subordinated Securities. Without
limiting the generality of the foregoing, "Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of (1) all monetary obligations of every nature of Cadmus under the Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (2) all monetary obligations of every nature of Cadmus in respect
of the Series A Indenture, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (3) all Interest Swap Obligations (including
guarantees thereof), and (4) all obligations under Currency Agreements
(including guarantees thereof), in each case, whether outstanding on the Issue
Date or thereafter Incurred. Notwithstanding the foregoing, "Senior Debt" shall
not include (i) any Indebtedness of Cadmus to any Subsidiary or Affiliate of
Cadmus, or any Subsidiary of such Affiliate, (ii) Indebtedness to, or guaranteed
on behalf of, any shareholder, director, officer or employee of Cadmus or any
Subsidiary of Cadmus (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts Incurred
in connection with obtaining goods, materials or services, (iv) Indebtedness
represented by Disqualified Capital Stock, (v) any liability for federal, state,
local or other taxes owed or owing by Cadmus, (vi) that portion of any
Indebtedness Incurred in violation of Section 4.03 (but, as to any such
obligation, no such violation shall be deemed to exist for purposes of this
clause (vi) if the holder(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of Cadmus to the effect
that the Incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the Incurrence of the entire committed amount thereof
at the date on which the initial borrowing thereunder is made would not) violate
such provisions of this Indenture), (vii) Indebtedness which, when Incurred and
without respect to any election under Section 1111(b) of Title 11 of the United
States Code, is without recourse to Cadmus, and (viii) any Indebtedness which
is, by its express terms, subordinated in right of payment to any other
Indebtedness of Cadmus.
"SENIOR SUBORDINATED NOTES" shall have the meaning set forth in the
Recitals hereto.
"SENIOR SUBORDINATED SECURITIES" shall have the meaning set forth in the
Recitals hereto.
"SERIES A INDENTURE" means the indenture, dated the date hereof, among
Cadmus, the guarantors named therein and Wilmington Trust Company, as trustee,
as amended or supplemented from time to time, relating to $40.0 million in
aggregate principal amount of Cadmus' senior subordinated increasing rate notes,
Series A.
"SERIES B INDENTURE" means the indenture, dated the date hereof, among
Cadmus, the guarantors named therein and Wilmington Trust Company, as trustee,
as amended or supplemented from time to time, relating to $60.0 million in
aggregate principal amount of Cadmus' senior subordinated increasing rate notes,
Series B.
"SERIES A NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series A Indenture.
"SERIES B NOTES" means the "Senior Subordinated Notes," as such term is
defined in the Series B Indenture.
"SERIES A SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series A Indenture.
"SERIES B SECURITIES" means the "Senior Subordinated Securities," as
such term is defined in the Series B Indenture.
"SIGNIFICANT SUBSIDIARY" with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act; PROVIDED, HOWEVER, that, for purposes of Section 4.13, such
satisfaction shall be determined based on 5.0%, rather than 10.0%.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by Cadmus or any Subsidiary
of Cadmus which are reasonably customary in an accounts receivable transaction.
"STATED MATURITY" means, with respect to any installment of principal or
interest on any Senior Subordinated Securities, the date on which such payment
of principal or interest was scheduled to be paid pursuant hereto, and shall not
include any contingent obligations to repay, redeem or repurchase any such
principal or interest prior to the date scheduled for the payment thereof.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of April 1, 1999, by and among Cadmus, Melham U.S. Inc., Purico (IOM) Ltd. and
Paul F. Mack, as such agreement may be supplemented or amended.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation a
majority of whose Voting Stock shall at the time be owned, directly or
indirectly, by such Person, or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person.
"SUBSIDIARY GUARANTEE" means any guarantee of the Series A Notes or the
Series B Notes by a Subsidiary Guarantor pursuant to Article (X) of the Series A
Indenture or the Series B Indenture.
"SUBSIDIARY GUARANTOR" means any Guarantor other than Cadmus.
"TAKE-OUT SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, including the Take-Out Senior Subordinated Debt, or
in general any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, in each case issued in compliance with the terms of the
Credit Agreement as in effect on the Issue Date.
"TAKE-OUT SENIOR SUBORDINATED DEBT" means unsecured notes or debentures
of Cadmus (which may be guaranteed by the Issuer or one or more of the
Guarantors on a senior subordinated basis), subordinated to the prior payment of
the Guarantor Senior Debt, that may be issued by Cadmus after the Issue Date
solely to refinance the Indebtedness represented by the Senior Subordinated
Notes, the Series A Notes and the Series B Notes.
"THIRD PARTIES" means all lessees, sublessees, licensees and other users
of the Properties in the ordinary course of Cadmus' business and on a temporary
basis.
"THREE-MONTH LIBOR" means, for any LIBOR Period, the rate for deposits
in Dollars for a three-month period which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the first day of such LIBOR Period. If such rate
does not appear on Telerate page 3750, the rate for that determination date will
be determined on the basis of the rate offered by Morgan Guaranty Trust Company
of New York at approximately 11:00 a.m., London time, on that day to prime banks
in the London interbank market for Dollar deposits for a three-month period. If
Three-Month LIBOR cannot be determined with respect to any LIBOR Period using
the foregoing methods, the rate for such Interest Period will be Three-Month
LIBOR as in effect during the preceding LIBOR Period. "Telerate Page 3750" means
the display page currently so designated on the Dow Jones Telerate Service (or
such other page as may replace that page on that service for the purpose of
displaying comparable rates or prices).
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture (except as provided in Section 9.03) until such time
as this Indenture is qualified under the TIA, and thereafter as in effect on the
date on which this Indenture is qualified under the TIA.
"TOTAL LEVERAGE RATIO" means, as of any date, the ratio of (i)
Consolidated Total Debt as of such date to (ii) Consolidated Cash Flow for the
Four Quarter Period (as defined in the definition of "Consolidated Fixed Charge
Coverage Ratio") most recently ended on or prior to such date.
"TRANSFER RESTRICTED SECURITIES" means Senior Subordinated Securities
that bear or are required to bear the Restricted Securities Legend.
"TRUSTEE" means the party named as such in the introductory paragraphs
of this Indenture until a successor replaces it and, thereafter, means the
successor.
"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer of the Trustee assigned by the Trustee to administer this
Indenture.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America that as at the time of payment shall be legal tender for the payment of
public and private debts.
"UNRESTRICTED SUBSIDIARY" of any Person means (1) any Subsidiary of such
Person formed or acquired after the Issue Date that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the Board of
Directors of such Person in compliance with Section 4.24 of this Indenture; and
(2) any Subsidiary of an Unrestricted Subsidiary.
"VOTING STOCK" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency) and, with respect to Cadmus, shall be deemed
to include the Common Stock of Cadmus.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any Wholly
Owned Subsidiary of such Person which, at the time of determination, is a
Restricted Subsidiary of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding Voting Stock (other than in the case of a
Subsidiary that is incorporated in a jurisdiction other than a State in the
United States or the District of Columbia, directors' qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to
applicable law) is owned by such Person or any Wholly Owned Subsidiary of such
Person.
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Acceleration Notice"........................ 6.02
"Affiliate Transaction"...................... 4.08
"Agent Members".............................. 2.13(a)
"Bankruptcy Law"............................. 6.01
"Change of Control Date"..................... 4.09(a)
"Change of Control Offer".................... 4.09
"Change of Control Payment Date"............. 4.09(c)
"Covenant Defeasance"........................ 8.01(c)
"CUSIP"...................................... 2.12
"custodian".................................. 6.01
"Defeasance Trust Payment"................... 10.02
"Events of Default".......................... 6.01
"Exchange Offer ............................. 2.01
"Exchange Registration Statement............. 2.01
"Guarantor Blockage Period".................. 12.02
"Guarantor Default Notice"................... 12.02
"Guaranteed Obligations...................... 11.01
"Incur"...................................... 4.03
"Indemnified Party".......................... 7.07
"Legal Defeasance"........................... 8. 01(b)
"Legal Holiday".............................. 13.08
"Net Proceeds Offer.......................... 4.06(a)
"Net Proceeds Offer Amount".................. 4.06(a)
"Net Proceeds Offer Payment Date"............ 4.06(a)
"Net Proceeds Offer Trigger Date"............ 4.06(a)
"Net Proceeds Trigger Date".................. 4.06(a)
"outstanding"................................ 8. 01(b)
"Paying Agent"............................... 2.03
"Payment Blockage Notice".................... 10.02
"Payment Blockage Period".................... 10.02
"Reference Date"............................. 4.04
"Registrar".................................. 2.03
"Restricted Payment"......................... 4.04
"Revolving Credit Commitment"................ 6.02
"Securities Register"........................ 2.06
"Surviving Entity"........................... 5.01
"Term Loan Commitment"....................... 6.02
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the United States Securities and Exchange Commission.
"indenture securities" means the Senior Subordinated Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer, each Guarantor
and any other obligor on the Senior Subordinated Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them by such
definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular; and
(6) "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE II
THE SENIOR SUBORDINATED SECURITIES
SECTION 2.01 Form and Dating; Issuance. (a) The Senior
Subordinated Notes, the notation thereon relating to the Guarantor Guarantees,
and the Trustee's certificate of authentication thereon shall be substantially
in the form of Exhibit A, which is hereby incorporated in and expressly made a
part of this Indenture. Any Roll-Over Notes, the notation thereon relating to
the Guarantor Guarantees, and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit B, which is hereby
incorporated in and expressly made a part of this Indenture. Any Exchange Notes
or Private Exchange Notes, the notation thereon relating to the Guarantor
Guarantees, and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit B; PROVIDED that, in the case of the
Exchange Note, such Exchange Notes shall not bear the Restricted Securities
Legend. The Senior Subordinated Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Issuer or any Guarantor is subject, if any, or usage. Each Senior Subordinated
Security shall be dated the date of its authentication. The terms of the Senior
Subordinated Securities and the Guarantor Guarantees set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture. The Senior Subordinated
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof.
(b) The Senior Subordinated Securities shall be represented by
certificates registered in the names of the Holders and may be represented by
one or more Global Senior Subordinated Securities. The aggregate principal
amount of any Global Senior Subordinated Security may from time to time be
increased or decreased in accordance with the provisions of this Article II by
adjustments made on the records of the Trustee as Custodian.
(c) On the Issue Date, the Issuer shall issue, and the Trustee
shall authenticate in accordance with Section 2.02, the Senior Subordinated
Notes in an aggregate principal amount of $10,000,000. On the Issue Date, each
Guarantor shall execute a Guarantor Guarantee in the manner set forth in Article
XI.
(d) If the Issuer has not redeemed or repaid the Senior
Subordinated Notes in full on or prior to the Initial Maturity Date, the
Holders, subject to the provisions of this Section 2.01(d), on the Initial
Maturity Date shall exchange their Senior Subordinated Notes for Roll-Over Notes
in an equal aggregate principal amount and the Issuer shall issue (and, in the
case of the Guarantor Guarantees, each Guarantor shall execute), and the Trustee
shall authenticate in accordance with Section 2.02, Roll-Over Notes in an
aggregate principal amount equal to the aggregate principal amount of Senior
Subordinated Notes then outstanding. The obligation of the Holders to exchange
their Senior Subordinated Notes for Roll-Over Notes is subject to the condition
that no Default or Event of Default under Section 6.01(a), (b) or (d) shall have
occurred and be continuing on the Initial Maturity Date.
(e) At such time as an "Exchange Registration Statement" (as
defined in the Registration Rights Agreement) has been declared effective by the
Commission and an "Exchange Offer" (as defined in the Registration Rights
Agreement) has been consummated as contemplated by the Registration Rights
Agreement, the Issuer shall issue (and, in the case of the Guarantor Guarantees,
each Guarantor shall execute), and the Trustee shall authenticate in accordance
with Section 2.02, Exchange Notes in an aggregate principal amount equal to the
principal amount of Roll-Over Notes surrendered for exchange or Private Exchange
Notes in accordance with the Registered Rights Agreement.
SECTION 2.02 Execution and Authentication. Two Officers of the
Issuer shall sign the Senior Subordinated Securities by manual or facsimile
signature.
If an Officer whose signature is on a Senior Subordinated
Security no longer holds that office at the time the Trustee authenticates the
Senior Subordinated Security, the Senior Subordinated Security shall be valid
nevertheless.
A Senior Subordinated Security shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Senior Subordinated Security. The signature shall be
conclusive evidence that the Senior Subordinated Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
upon a written order of the Issuer signed by two of its Officers (1) Senior
Subordinated Notes for original issue on the Issue Date in an aggregate
principal amount of $10,000,000, (2) subject to Section 2.01(d), Roll-Over Notes
in an aggregate principal amount equal to the aggregate principal amount of
Senior Subordinated Notes then outstanding and (3) subject to Section 2.01(e),
Exchange Notes or Private Exchange Notes, as the case may be, issued upon
surrender of an equal aggregate principal amount of Roll-Over Notes in an
Exchange Offer. Such order shall specify the amount of the Senior Subordinated
Securities to be authenticated, the date on which the original issue of Senior
Subordinated Securities is to be authenticated and whether the Senior
Subordinated Securities are to be Senior Subordinated Notes, Roll-Over Notes or
Exchange Notes. The aggregate principal amount of Senior Subordinated Securities
outstanding at any time may not exceed $10,000,000, except as provided in
Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuer to authenticate the Senior Subordinated Securities. Any
such appointment shall be evidenced by an instrument signed by a Trust Officer
of the Trustee, a copy of which shall be furnished to the Issuer. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Senior Subordinated Securities whenever the Trustee may do so. After any such
appointment, each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03 Registrar and Paying Agent. The Issuer shall
maintain an office or agency where Senior Subordinated Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Senior Subordinated Securities may be presented for
payment (the "Paying Agent"). The Issuer may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Issuer shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuer shall notify
the Trustee of the name and address of any such agent. If the Issuer fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Issuer may act as Paying Agent, Registrar, co-registrar or transfer agent;
PROVIDED that the Issuer may not act as Paying Agent for purposes of Article
III, Article VIII, and Sections 4.06 and 4.09.
The Issuer initially appoints the Trustee as Registrar and Paying
Agent in connection with the Senior Subordinated Securities.
The Issuer initially appoints The Depository Trust Company to act
as Depositary with respect to the Global Senior Subordinated Securities, and the
Trustee shall initially be the Custodian with respect to the Global Senior
Subordinated Securities.
The Issuer may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee, PROVIDED that no
such removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Issuer
and such successor Registrar or Paying Agent, as the case may be, and delivered
to the Trustee or (2) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
not less than three Business Days' prior written notice to the Issuer; PROVIDED,
HOWEVER, that the Trustee may resign as Paying Agent or Registrar only if the
Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04 Paying Agent To Hold Money in Trust. Prior to 11:00
a.m., New York City time, on each due date of the principal and interest on any
Senior Subordinated Security, the Issuer shall deposit with the Paying Agent (or
if the Issuer is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Issuer shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Senior Subordinated Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Senior Subordinated Securities and shall notify the Trustee in writing of
any default by the Issuer in making any such payment within one Business Day
thereof. If the Issuer acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Issuer at any
time may require a Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed by the Paying Agent. Upon complying with this
Section 2.04, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05 Senior Subordinated Securityholder Lists. The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders of Senior
Subordinated Securities. If the Trustee is not the Registrar, the Issuer shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Senior Subordinated Securities.
SECTION 2.06 Registration of Transfer and Exchange. The Senior
Subordinated Securities shall be issued in registered form only. The Issuer
shall cause to be kept at the principal corporate trust office of the Trustee a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Registrar shall provide for the
registration of transfer of Senior Subordinated Securities entitled to be
transferred as herein provided or the exchange of Senior Subordinated Securities
for an equal principal amount of Senior Subordinated Securities of other
authorized denominations. To permit registration of transfers and exchanges, the
Issuer shall execute (and, in the case of the Guarantor Guarantees, each
Guarantor shall execute) and the Trustee shall authenticate Senior Subordinated
Securities at the Registrar's or co-registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the Registrar may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any registration of transfer or exchange
pursuant to this Section 2.06 (other than any such taxes, assessments or other
governmental charges payable upon transfers or exchanges pursuant to Sections
2.09, 3.06, 4.09, and 9.05). The Registrar need not register transfers or
exchanges of Senior Subordinated Securities selected for redemption (except, in
the case of Senior Subordinated Securities to be redeemed in part, the portion
thereof not to be redeemed) or transfers or exchanges of any Senior Subordinated
Securities for a period of 15 days before a selection of Senior Subordinated
Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Senior Subordinated Security, the Issuer, each Guarantor, the Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the Person in
whose name a Senior Subordinated Security is registered as the absolute owner of
such Senior Subordinated Security for the purpose of receiving payment of
principal of and accrued and unpaid interest on such Senior Subordinated
Security and for all other purposes whatsoever, whether or not such Senior
Subordinated Security is overdue, and none of the Issuer, any Guarantor, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
Any Holder of a Global Senior Subordinated Security shall, by
acceptance of such Global Senior Subordinated Security, agree that transfers of
beneficial interests in such Global Senior Subordinated Security may be effected
only through the Depositary, in accordance with the provisions of this Indenture
and such Depositary's usual procedures.
All Senior Subordinated Securities issued upon any registration
of transfer or exchange pursuant to this Section 2.06 will evidence the same
debt and will be entitled to the same benefits under this Indenture as the
Senior Subordinated Securities surrendered upon such registration of transfer or
exchange.
SECTION 2.07 Replacement Senior Subordinated Securities. If a
mutilated Senior Subordinated Security is surrendered to the Registrar or if the
Holder of a Senior Subordinated Security claims that the Senior Subordinated
Security has been lost, destroyed or wrongfully taken, the Issuer shall issue
(and, in the case of the Guarantor Guarantees, each Guarantor shall issue) and
the Trustee shall authenticate a replacement Senior Subordinated Security if the
Holder satisfies any reasonable requirements of the Trustee including evidence
of the destruction, loss or theft of the Senior Subordinated Security. If
required by the Trustee or the Issuer, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Trustee to protect the Issuer, the
Guarantors, the Trustee, the Paying Agent, the Registrar and any co-registrar
from any loss that any of them may suffer if a Senior Subordinated Security is
replaced. The Issuer and the Trustee may charge the Holder for their reasonable
out-of-pocket expenses in replacing a Senior Subordinated Security, including
the payment of a sum sufficient to cover any tax or other governmental charge
that may be required. In the event any such mutilated, lost, destroyed or
wrongfully taken Senior Subordinated Security has become or is about to become
due and payable, the Issuer in its discretion may pay such Senior Subordinated
Security instead of issuing a new Senior Subordinated Security in replacement
thereof.
Every replacement Senior Subordinated Security is an additional
obligation of the Issuer.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Senior Subordinated Securities.
SECTION 2.08 Outstanding Senior Subordinated Securities. The
Senior Subordinated Securities outstanding at any time are all Senior
Subordinated Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding. A Senior Subordinated Security does not cease
to be outstanding because the Issuer, any Guarantor or an Affiliate of the
Issuer or any Guarantor holds the Senior Subordinated Security.
If a Senior Subordinated Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee and the Issuer receive
proof satisfactory to them that the replaced Senior Subordinated Security is
held by a protected purchaser (as defined in Article 8 of the Uniform Commercial
Code).
If the Paying Agent (other than the Issuer or any Affiliate of
the Issuer) segregates and holds in trust, in accordance with this Indenture, on
a redemption date or maturity date U.S. Legal Tender sufficient to pay all
principal and interest payable on that date with respect to the Senior
Subordinated Securities (or portions thereof) to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Holders of Senior Subordinated Securities on that date pursuant to the terms
of this Indenture, then on and after that date such Senior Subordinated
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09 Temporary Senior Subordinated Securities. Until
definitive Senior Subordinated Securities are ready for delivery, the Issuer may
prepare (and, in the case of the Guarantor Guarantees, each Guarantor shall
prepare) and the Trustee shall authenticate temporary Senior Subordinated
Securities. Temporary Senior Subordinated Securities shall be substantially in
the form of definitive Senior Subordinated Securities. Without unreasonable
delay, the Issuer shall prepare (and, in the case of the Guarantor Guarantees,
each Guarantor shall prepare) and the Trustee shall authenticate definitive
Senior Subordinated Securities and deliver them in exchange for temporary Senior
Subordinated Securities upon surrender of such temporary Senior Subordinated
Securities at the office or agency of the Issuer, without charge to the Holder.
SECTION 2.10 Cancellation. The Issuer at any time may deliver
Senior Subordinated Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Senior Subordinated
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Senior Subordinated Securities surrendered
for registration of transfer, exchange, payment or cancellation and dispose of
such Senior Subordinated Securities in accordance with its customary procedures,
unless the Issuer otherwise directs in writing to the Trustee. The Issuer may
not issue new Senior Subordinated Securities to replace Senior Subordinated
Securities that have been redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Senior Subordinated Securities
in place of canceled Senior Subordinated Securities other than pursuant to the
terms of this Indenture.
SECTION 2.11 Defaulted Interest. If the Issuer defaults in a
payment of interest on the Senior Subordinated Securities, the Issuer shall pay
the defaulted interest (plus interest on such defaulted interest at the rate
then payable in respect of such Senior Subordinated Securities to the extent
lawful) in any lawful manner. The Issuer may pay the defaulted interest to the
Persons who are Holders of Senior Subordinated Securities on a subsequent
special record date. The Issuer shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Trustee and
shall promptly mail or cause to be mailed to each Holder of Senior Subordinated
Securities a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.
The Issuer may make payment of any defaulted interest in any
other lawful manner not inconsistent with the requirements (if applicable) of
any securities exchange on which the Senior Subordinated Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Issuer to the Trustee of the proposed payment pursuant to
this paragraph, such manner of payment shall be deemed practicable by the
Trustee.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Senior
Subordinated Securities may use "CUSIP" numbers (if then generally in use) and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Senior Subordinated Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Senior Subordinated Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Issuer
shall promptly notify the Trustee of any changes in "CUSIP" numbers for the
Senior Subordinated Securities.
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities. If the Senior Subordinated Securities are issued in the form of a
Global Senior Subordinated Security, the following provisions shall apply:
(a) Each Global Senior Subordinated Security initially shall (i)
be registered in the name of the Depositary for such Global Senior
Subordinated Security or the nominee of such Depositary and (ii) be
delivered to the Trustee as the initial Custodian for such Depositary.
Beneficial interests in Global Senior Subordinated Securities may be
held indirectly through members of or participants in ("Agent Members")
the Depositary.
Agent Members shall have no rights under this Indenture with
respect to any Global Senior Subordinated Security held on their behalf
by the Depositary, or the Trustee as Custodian, or under such Global
Senior Subordinated Security, and the Depositary may be treated by the
Issuer, the Trustee and any agent of the Issuer or the Trustee as the
absolute owner of such Global Senior Subordinated Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, the Trustee or any agent of the Issuer or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Senior
Subordinated Security.
(b) Transfers of a Global Senior Subordinated Security shall be
limited to transfers of such Global Senior Subordinated Security in
whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Senior
Subordinated Security may be transferred in accordance with the rules
and procedures of the Depositary (and Agent Member, if applicable) and
the provisions of Section 2.14. The Trustee shall register the transfer
of Senior Subordinated Securities to all beneficial owners in exchange
for their beneficial interests in a Global Senior Subordinated Security
if (i) the Depositary notifies the Issuer that it is unwilling or unable
to continue as Depositary for such Global Senior Subordinated Security
or the Depositary ceases to be a clearing agency registered under the
Exchange Act, at a time when the Depositary is required to be so
registered in order to act as Depositary, and in each case a successor
Depositary is not appointed by the Issuer within 90 days of such notice
or, (ii) the Issuer executes and delivers to the Trustee and Registrar
an Officers' Certificate stating that such Global Senior Subordinated
Security shall be so exchangeable or (iii) an Event of Default has
occurred and is continuing and the Registrar has received a request from
the Trustee or the Depositary to permit such transfers.
SECTION 2.14 Special Transfer Provisions. Unless and until a
Transfer Restricted Security is transferred or exchanged under an effective
registration statement under the Securities Act, the following provisions shall
apply:
(a) Upon the registration of transfer, exchange or replacement of
Senior Subordinated Securities not bearing the Restricted Securities
Legend, the Registrar shall deliver Senior Subordinated Securities that
do not bear the Restricted Securities Legend. Upon the registration of
transfer, exchange or replacement of Senior Subordinated Securities
bearing the Restricted Securities Legend, the Registrar shall deliver
only Senior Subordinated Securities that bear the Restricted Securities
Legend unless (i) the requested transfer is after the second anniversary
of the Issue Date (PROVIDED, HOWEVER, that neither the Issuer nor any
Affiliate of the Issuer has held any beneficial interest in such Senior
Subordinated Security, or portion thereof, at any time prior to the
second anniversary of the Issue Date) or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Issuer
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.
(b) By its acceptance of any Senior Subordinated Security bearing
the Restricted Securities Legend, each Holder of such a Senior
Subordinated Security acknowledges that transfer of such Senior
Subordinated Security may be restricted pursuant to the provisions of
the Securities Act as set forth in the Restricted Securities Legend and
agrees that it shall transfer such Senior Subordinated Security only in
a transaction that is exempt from the registration requirements of the
Securities Act.
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes. Notwithstanding any other provision of this Indenture, prior to the
Initial Maturity Date, (i) no registration of transfer of any Senior
Subordinated Note and (ii) no Lien (other than Liens contemplated by the Stock
Purchase Agreement) of any kind shall be created in or placed on any Senior
Subordinated Note, in each case without the written consent of the Issuer, which
consent shall not be unreasonably withheld (it being understood that solely
because any registration of transfer results in an increase in the number of
Holders of Senior Subordinated Notes to not more than eight Holders shall not
constitute reasonable grounds for withholding such consent); PROVIDED, HOWEVER,
that the registration of transfer to, and the creation of Liens in favor of,
Affiliates of such Holders shall not be prohibited by this Section 2.15.
ARTICLE III
REDEMPTION
SECTION 3.01 Notices to Trustee. If the Issuer elects to redeem
Senior Subordinated Securities pursuant to Section 3.07 or is required to redeem
Senior Subordinated Notes pursuant to Section 3.08, it shall notify the Trustee
in writing of the redemption date, the redemption price, the principal amount of
Senior Subordinated Securities to be redeemed and the Section of this Indenture
pursuant to which the redemption will occur.
The Issuer shall give each notice to the Trustee provided for in
this Section 3.01 not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but no more than
60 days before the redemption date unless the Trustee consents to a shorter
period. Such notice shall be accompanied by an Officers' Certificate and an
Opinion of Counsel from the Issuer to the effect that such redemption will
comply with the conditions herein. Any such notice may be canceled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.02 Selection. If less than all of the Senior
Subordinated Securities are to be redeemed at any time, selection of Senior
Subordinated Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Senior Subordinated Securities are listed, or, if the Senior
Subordinated Securities are not so listed, on a PRO RATA basis, by lot or by
such method as the Trustee shall deem fair and appropriate; PROVIDED that no
Senior Subordinated Security of $1,000 or less shall be redeemed in part. If any
Senior Subordinated Security is to be redeemed in part only, the notice of
redemption that relates to such Senior Subordinated Security shall state the
portion of the principal amount thereof to be redeemed. On and after the
redemption date, unless the Issuer defaults in making the redemption payment or
the Paying Agent is prohibited from making the redemption payment pursuant to
the terms of this Indenture, interest ceases to accrue on Senior Subordinated
Securities or portions of them called for redemption.
SECTION 3.03 Notice. Notices of redemption shall be mailed by
first class mail not less than 30 days (or 3 Business Days in the case of a
mandatory redemption pursuant to the terms of Section 3.08(a)) but not more than
60 days before the redemption date to each Holder of Senior Subordinated
Securities to be redeemed at its registered address. Notices of redemption may
not be conditional. The Trustee shall notify the Issuer promptly of the Senior
Subordinated Securities or portions of Senior Subordinated Securities to be
redeemed.
The notice shall identify the Senior Subordinated Securities to
be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Senior Subordinated Securities called for redemption
must be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Senior Subordinated
Securities are to be redeemed, the certificate numbers and principal
amounts of the particular Senior Subordinated Securities to be redeemed;
(6) that, unless the Issuer defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Senior Subordinated
Securities (or portion thereof) called for redemption ceases to accrue
on and after the redemption date;
(7) the paragraph of the Senior Subordinated Securities or the
Section of this Indenture pursuant to which the Senior Subordinated
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Senior Subordinated
Securities being redeemed;
(9) in the case of a partial redemption, that any Holder of a
Senior Subordinated Security redeemed in part shall receive a
replacement Senior Subordinated Security in the principal amount equal
to the principal amount of the Senior Subordinated Security not so
redeemed; and
(10) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Senior Subordinated Securities.
At the Issuer's request (which may be revoked at any time in
writing prior to the time at which the Trustee shall have given such notice to
the Holders), the Trustee shall give the notice of redemption in the Issuer's
name and at the Issuer's expense. In such event, the Issuer shall provide the
Trustee with the information required by this Section 3.03.
SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed, Senior Subordinated Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Senior Subordinated
Securities shall be paid at the redemption price stated in the notice, plus
accrued interest to the redemption date; PROVIDED that if the redemption date is
after a regular record date and on or prior to the interest payment date, the
accrued interest shall be payable to the Holder of the redeemed Senior
Subordinated Securities registered on the relevant record date. If mailed in the
manner herein, the notice shall be conclusively presumed to have been given
whether or not the Holder receives such notice. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05 Deposit of Redemption Price. Prior to 11:00 a.m. New
York City time on the redemption date, the Issuer shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the redemption price of and accrued
interest on all Senior Subordinated Securities to be redeemed on the redemption
date other than Senior Subordinated Securities or portions of Senior
Subordinated Securities called for redemption that have been delivered by the
Issuer to the Trustee for cancellation.
SECTION 3.06 Senior Subordinated Securities Redeemed in Part.
Upon surrender of a Senior Subordinated Security that is redeemed in part, the
Issuer shall execute and the Trustee shall authenticate for the Holder (at the
Issuer's expense) a new Senior Subordinated Security equal in principal amount
to the unredeemed portion of the Senior Subordinated Security surrendered.
SECTION 3.07 Optional Redemption. The Issuer may at any time and
from time to time redeem the Senior Subordinated Notes, in whole or in part,
without premium (except as otherwise provided in this Section 3.07) or penalty,
at a price equal to the principal amount so to be redeemed plus all accrued and
unpaid interest. Prior to April 1, 2004, the Issuer may not redeem Roll-Over
Notes, Exchange Notes or Private Exchange Notes. From and after such date, the
Issuer may at any time and from time to time redeem the Roll-Over Notes,
Exchange Notes or Private Exchange Notes, in whole or in part, at a price equal
to the principal amount so to be redeemed multiplied by the Applicable Call
Premium, plus all accrued and unpaid interest to the date of redemption. Partial
redemptions pursuant to this Section 3.07 shall be in an aggregate principal
amount of $500,000 (in the aggregate as to all Senior Subordinated Securities)
or a whole multiple of $100,000 in excess thereof. Notwithstanding anything to
the contrary contained above, if any redemption is made pursuant to this Section
3.07 within 30 days of the occurrence of any Change of Control, the Applicable
Call Premium shall be accompanied by a redemption premium in an amount equal to
1% of the principal amount of Senior Subordinated Securities so redeemed. If any
redemption is made pursuant to this Section 3.07 without the payment of such a
redemption premium, and any Change of Control occurs within 30 days thereafter,
on the date of the occurrence of such Change of Control the premium provided in
the immediately preceding sentence shall be due and payable on such date
(notwithstanding that all other amounts pursuant to this Indenture may
theretofore have been repaid).
SECTION 3.08 Mandatory Cadmus Redemption. (a) If, prior to the
Initial Maturity Date, Cadmus or any of its Subsidiaries shall issue any
Take-Out Securities, 100% of the Net Cash Proceeds thereof (after application of
such Net Cash Proceeds in accordance with Section 3.08(a) of the Series A
Indenture) shall, on the date of Cadmus' or any such Subsidiary's receipt
thereof, be deposited with the Paying Agent, so long as, with respect to the
Take-Out Securities other than Take-Out Senior Subordinated Debt, such deposit
is permitted by the terms of the Senior Debt, including the Credit Agreement, to
be applied by Cadmus to redeem Senior Subordinated Notes at a price equal to the
principal amount so to be redeemed plus all accrued and unpaid interest and any
break funding fees incurred by the Holder thereof in connection therewith,
PROVIDED that the Cadmus' failure to so deposit such amounts (so long as, with
respect to the Take-Out Securities other than Take-Out Senior Subordinated Debt,
such deposit is permitted by the terms of the Credit Agreement) shall constitute
an Event of Default under Section 6.01(b);
(b) If Cadmus or any of its Restricted Subsidiaries shall apply,
or be required to apply, any Net Cash Proceeds pursuant to Section 4.06(a) to
redeem Senior Subordinated Securities, such Net Cash Proceeds shall, on the date
of Cadmus' (or any of its Restricted Subsidiaries') receipt thereof (or such
later date as is provided in the last sentence of Section 4.06(a), to the extent
relevant) be deposited with the Paying Agent (so long as such deposit is
permitted by the terms of the Credit Agreement) to be applied to redeem such
Senior Subordinated Securities.
(c) All redemptions made pursuant to the provisions of this
Section 3.08 shall be made at par. In addition, each redemption payment made
pursuant to this Section 3.08 with respect to any Senior Subordinated Securities
shall be accompanied by the payment of accrued and unpaid interest (through the
date the redemption is actually effected) on the principal amount of Senior
Subordinated Notes to be so redeemed, provided that any such redemption payment
made shall be accompanied by any reasonable break funding fees incurred by the
Holder thereof in connection therewith. Notwithstanding anything to the contrary
contained above in Section 3.08(a), the Issuer shall use good faith efforts to
provide notices of any mandatory redemption pursuant to Section 3.08(a)
sufficiently in advance of its receipt of the proceeds or the occurrence of the
event which will require a redemption pursuant to this Section 3.08 so that the
respective mandatory redemption may be made on the date of Cadmus' or any of its
Restricted Subsidiary's receipt of such proceeds.
SECTION 3.09 Senior Subordinated Securities Acquired by Cadmus or
the Issuer. Any Senior Subordinated Security redeemed or repurchased or
otherwise acquired by Cadmus or the Issuer shall be surrendered to the Trustee
for cancellation.
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Senior Subordinated Securities. The
Issuer shall promptly pay the principal of and interest on the Senior
Subordinated Securities on the dates and in the manner provided in the Senior
Subordinated Securities, in this Indenture and in the Registration Rights
Agreement. An installment of principal and interest shall be considered paid on
the date due if on such date the Trustee or the Paying Agent (but only if other
than the Issuer, a Guarantor or any of their respective Affiliates) holds by
11:00 a.m., New York City time, in accordance with this Indenture U.S. Legal
Tender sufficient to pay such installment and the Trustee or the Paying Agent,
as the case may be, is not prohibited from paying such money to the Holders of
Senior Subordinated Securities on that date pursuant to the terms of this
Indenture.
The Issuer shall pay interest on overdue principal (including
post-petition interest in an action or proceeding under any Bankruptcy Law) at
the rate specified therefor in the Senior Subordinated Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
SECTION 4.02 Reports. Cadmus will deliver to the Trustee, within
15 days after the filing of the same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which Cadmus is required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act. Notwithstanding that Cadmus may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, Cadmus will file with the Commission, to the extent permitted, and provide
the Trustee and Holders or prospective Holders (upon request) with such annual
reports and such information, documents and other reports specified in Sections
13 and 15(d) of the Exchange Act. The Issuer and Cadmus will also comply with
the other provisions of TIA ss. 314(a).
SECTION 4.03 Incurrence of Indebtedness. Cadmus will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume, guarantee, acquire, become liable, contingently or
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "Incur") any Indebtedness (other than Permitted Indebtedness);
PROVIDED, HOWEVER, that so long as (i) no Default or Event of Default shall have
occurred and be continuing at the time of, or as a consequence of, the
Incurrence of any such Indebtedness and (ii) no Senior Subordinated Notes are
then outstanding, Cadmus, the Issuer and any Subsidiary Guarantor may Incur
Indebtedness (including, without limitation, Acquired Indebtedness), in each
case if on the date of the Incurrence of such Indebtedness, after giving effect
to the Incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of
Cadmus is greater than (x) 2.75 to 1.0 if such Indebtedness is Incurred on or
before April 1, 2001, or (y) 3.0 to 1.0 if such Indebtedness is Incurred
thereafter.
SECTION 4.04 Restricted Payments. Cadmus will not, and will not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend or make any distribution (other than (x)
dividends or distributions made to Cadmus or any Wholly Owned Restricted
Subsidiary of Cadmus that is a Guarantor and (y) dividends or distributions
payable in Qualified Capital Stock of Cadmus or in warrants, rights or options
to purchase or acquire shares of such Qualified Capital Stock) on or in respect
of shares of Capital Stock of Cadmus or any Restricted Subsidiary of Cadmus to
holders of such Capital Stock, (b) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of Cadmus or any Restricted Subsidiary of
Cadmus or any warrants, rights or options to purchase or acquire shares of any
class of such Capital Stock, (c) make any Investment (other than Permitted
Investments) or (d) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of Cadmus or a Restricted Subsidiary of Cadmus that is
subordinate or junior in right of payment to the Series A Securities, Series B
Securities and Senior Subordinated Securities or such Restricted Subsidiary's
Subsidiary Guarantee, as the case may be (each of the foregoing actions set
forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if (A) any Series A Notes, Series B Notes or Senior Subordinated
Notes are then outstanding or (B) at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing, (ii) Cadmus is not able to Incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with the provisions of Section 4.03 or (iii) the aggregate amount of
Restricted Payments (including such proposed Restricted Payment) made subsequent
to the Issue Date (the amount expended for such purposes, if other than cash,
being the fair market value of such property as determined reasonably and in
good faith by the Board of Directors of Cadmus) shall exceed the sum of: (w) 50%
of the cumulative Consolidated Net Earnings (or, if cumulative Consolidated Net
Earnings shall be a loss, minus 100% of such loss) of Cadmus earned subsequent
to the Issue Date through the last day of Cadmus' most recently ended fiscal
quarter for which internal financial statements are available at the time of
such Restricted Payment (the "Reference Date"), treating such period as a single
accounting period; plus (x) 100% of the aggregate net cash proceeds received by
Cadmus from any Person (other than a Restricted Subsidiary of Cadmus) from the
issuance and sale subsequent to the Issue Date and on or prior to the Reference
Date of Qualified Capital Stock of Cadmus plus (y) to the extent not otherwise
included in Cadmus' Consolidated Net Earnings, in the case of the disposition or
repayment of any Investment constituting a Restricted Payment made after the
Issue Date, an amount equal to the lesser of (A) the cash return of capital with
respect to such Investment and (B) the initial amount of such Investment, in
either case, less the cost of the disposition of such Investment; plus (z)
without duplication of any amounts included in clause (iii)(x) above, 100% of
the aggregate net cash proceeds of any equity contribution received by Cadmus
from a holder of Cadmus' Capital Stock.
Notwithstanding anything to the contrary set forth in this
Section 4.04, Cadmus will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, make any principal payment on,
purchase, redeem, prepay, defease or otherwise acquire or retire for value,
whether at maturity, upon redemption or otherwise, any Series B Securities if
any Senior Subordinated Securities are then outstanding; PROVIDED, HOWEVER,
that, upon any Change of Control Offer or Net Proceeds Offer, Cadmus may
purchase the Series B Securities in accordance with the respective indentures
pursuant to which such securities were issued if, (x) in the case of a Change of
Control Offer, Cadmus or the Issuer shall first have purchased all Senior
Subordinated Securities tendered pursuant to such Change of Control Offer in
compliance with the provisions of Section 4.09 and (y) in the case of a Net
Proceeds Offer, any Net Cash Proceeds shall remain after the consummation of
such Net Proceeds Offer in compliance with the provisions of Section 4.06;
PROVIDED, FURTHER, that, in any case, such purchase shall constitute a
Restricted Payment and shall comply with the provisions of clause (B) of the
immediately preceding paragraph.
Notwithstanding the foregoing, the provisions set forth in the
immediately two preceding paragraphs do not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if such
dividend would have been permitted on the date of declaration; (2) if no Default
or Event of Default shall have occurred and be continuing, the redemption,
repurchase or other acquisition or retirement of any shares of Capital Stock of
Cadmus, either (i) solely in exchange for shares of Qualified Capital Stock of
Cadmus or (ii) through the application (within 60 days after the sale thereof)
of the net cash proceeds of a sale for cash (other than to a Restricted
Subsidiary of Cadmus) of shares of Qualified Capital Stock of Cadmus; (3) if no
Default or Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any Indebtedness
(other than the Series B Securities) of Cadmus, the Issuer or any Subsidiary
Guarantor that is subordinate or junior in right of payment to the Senior
Subordinated Securities or such Subsidiary Guarantor's Subsidiary Guarantee, as
the case may be, either (i) solely in exchange for shares of Qualified Capital
Stock of Cadmus or warrants, rights or options to purchase or acquire shares of
Qualified Capital Stock of Cadmus or (ii) through the application (within 60
days of the sale thereof) of net proceeds of a sale for cash (other than to a
Restricted Subsidiary of Cadmus) of (A) shares of Qualified Capital Stock of
Cadmus or (B) Refinancing Indebtedness; (4) if no Default or Event of Default
shall have occurred and be continuing, repurchases by Cadmus of Common Stock of
Cadmus pursuant to repurchase options in stock option agreements between Cadmus
and employees of Cadmus and any of its Subsidiaries from such employees or their
authorized representatives upon the death, disability or termination of
employment of such employees, in the aggregate not to exceed $250,000 in any
calendar year; and (5) the declaration and payment, consistent with past
practice, of dividends on share of Cadmus' Common Stock to holders of such
Common Stock if, at the time of such payment and immediately after giving effect
thereto, (x) no Default or Event of Default shall have occurred and be
continuing and (y) Cadmus is able to Incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with the
provisions of Section 4.03. In determining the aggregate amount of Restricted
Payments made subsequent to the Issue Date in accordance with clause (iii) of
the first paragraph of this Section 4.04, amounts expended pursuant to clauses
(1), (2)(ii), (4) and (5) of this paragraph shall be included in such
calculation.
Not later than the date of making any Restricted Payment, Cadmus
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon Cadmus' latest available internal quarterly
financial statements.
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries. Cadmus will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of Cadmus to (a) pay dividends or make any
other distributions on or in respect of its Capital Stock; (b) make loans or
advances, or pay any Indebtedness or other obligation owed, to Cadmus or any
other Restricted Subsidiary of Cadmus; or (c) transfer any of its property or
assets to Cadmus or any other Restricted Subsidiary of Cadmus, except for such
encumbrances or restrictions existing under or by reason of: (1) applicable law;
(2) this Indenture, the Senior Subordinated Securities and the Guarantor
Guarantees; (3) the Series A Indenture, the Series B Indenture, the Series A
Securities, the Series B Securities and the Guarantor Guarantees; (4) customary
non-assignment provisions of any contract or any lease governing a leasehold
interest of any Restricted Subsidiary of Cadmus; (5) any agreement governing
Acquired Indebtedness, but only if such encumbrance or restriction shall not
apply to any Person, or the assets of any Person, other than the Person, or the
assets of the Person, so required; (6) agreements existing on the Issue Date, to
the extent and in the manner such agreements are in effect on the Issue Date;
(7) the Credit Agreement; (8) any instrument governing a Permitted Lien, to the
extent and only to the extent such instrument restricts the transfer or other
disposition of assets subject to such Permitted Lien; (9) any contract for the
sale of specified assets, including, without limitation, any restriction with
respect to a Restricted Subsidiary of Cadmus imposed pursuant to any agreement
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary, to be consummated in
accordance with the terms of this Indenture, pending the closing of such sale or
disposition; PROVIDED that any such restriction relates solely to the Capital
Stock or assets that are the subject of such agreement; (10) Indebtedness or
other contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction or the charter documents of such
Securitization Entity; PROVIDED that, in any case, such restrictions apply only
to such Securitization Entity; and (11) any agreement governing Indebtedness
Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to
an agreement referred to in clause (2), (4), (5) or (6) above; PROVIDED,
HOWEVER, that the provisions relating to such encumbrance or restriction
contained in any such Indebtedness are not materially more restrictive, as
determined by the Board of Directors of Cadmus or such Restricted Subsidiary, as
the case may be, in their reasonable and good faith judgment, than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (2), (4), (5) or (6).
SECTION 4.06 Asset Sales. (a) Cadmus will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) Cadmus or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined reasonably and
in good faith by Cadmus' Board of Directors), (ii) at least 80% of the
consideration received by Cadmus or such Restricted Subsidiary, as the case may
be, from such Asset Sale shall be in the form of cash or Cash Equivalents and is
received at the time of such disposition and (iii) upon the consummation of an
Asset Sale, Cadmus applies, or causes such Restricted Subsidiary to apply, the
Net Cash Proceeds relating to such Asset Sale within 270 days of receipt thereof
either (A) to prepay any Senior Debt or Guarantor Senior Debt (and, in the case
of Senior Debt or Guarantor Senior Debt under any revolving credit facility,
including the Credit Agreement, effect a corresponding permanent reduction in
the availability under such revolving credit facility), (B) to reinvest in
Productive Assets, or (C) a combination of prepayment and investment permitted
by the foregoing clauses (iii)(A) and (iii)(B). On the 271st day after an Asset
Sale or such earlier date, if any, as the Board of Directors of Cadmus or of
such Restricted Subsidiary determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) or
(iii)(C) of the preceding sentence (each, a "Net Proceeds Offer Trigger Date"),
such aggregate amount of Net Cash Proceeds which have not been applied on or
before such Net Proceeds Offer Trigger Date as permitted in such clauses
(iii)(A), (iii)(B) and (iii)(C) (each a "Net Proceeds Offer Amount") shall be
applied by Cadmus or such Restricted Subsidiary, as the case may be, to make an
offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer
Payment Date") not less than 20 Business Days nor more than 30 Business Days
following the date on which the notice of such Net Proceeds Offer is mailed to
the Holders, from all Holders on a PRO RATA basis, that principal amount of
Senior Subordinated Securities equal to the Net Proceeds Offer Amount at a price
equal to 100% of the principal amount of the Senior Subordinated Securities to
be purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase; PROVIDED, HOWEVER, that if at any time any non-cash consideration
received by Cadmus or any Restricted Subsidiary of Cadmus, as the case may be,
in connection with any Asset Sale is converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.06. Notwithstanding the foregoing,
Cadmus or Cadmus' Restricted Subsidiaries may defer the Net Proceeds Offer until
there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess
of $5.0 million resulting from one or more Asset Sales (at which time, the
entire unutilized Net Proceeds Offer Amount, and not just the amount in excess
of $5.0 million, shall be applied as required pursuant to this paragraph). Upon
completion of a Net Proceeds Offer, the amount of Net Cash Proceeds and the
amount of aggregate unutilized Net Proceeds Offer Amount will be reset to zero.
To the extent that any Net Proceeds remain after the consummation of a Net
Proceeds Offer, Cadmus or any Restricted Subsidiary of Cadmus, as the case may
be, may use such Net Proceeds for any purposes not prohibited by this Indenture.
Notwithstanding the provisions of this Section 4.06(a), Cadmus shall not make a
Net Proceeds Offer if Cadmus is prohibited from doing so under the terms of the
Credit Agreement, PROVIDED that Cadmus' or any of its Restricted Subsidiaries'
failure to comply with the covenant in this Section 4.06(a) shall constitute an
Event of Default described in clause (b) under Section 6.01.
(b) In the event of the transfer of substantially all (but not
all) of the property and assets of Cadmus and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted by Section 5.01, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed for purposes of this Section 4.06 to have sold the properties
and assets of Cadmus and its Restricted Subsidiaries not so transferred, and
shall comply with the provisions of this Section 4.06 with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market value of
such properties and assets of Cadmus or its Restricted Subsidiaries deemed to be
sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.06.
(c) Notwithstanding the provisions of Section 4.06(a), Cadmus and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraph to the extent that (i) at least 80% of the
consideration for such Asset Sale constitutes Productive Assets and (ii) such
Asset Sale is for fair market value; PROVIDED that any consideration consisting
of cash or Cash Equivalents received by Cadmus or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall constitute Net Cash Proceeds subject to the provisions of
Section 4.06(a).
(d) Each notice of a Net Proceeds Offer pursuant to this Section
4.06 shall be mailed or caused to be mailed, by first class mail, by Cadmus not
more than 25 days after the Net Proceeds Offer Trigger Date to all Holders at
their last registered addresses as of a date within 15 days of the mailing of
such notice, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Subordinated
Securities pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.06 and that all Senior Subordinated Securities tendered will
be accepted for payment; PROVIDED, HOWEVER, that if the aggregate
principal amount of Senior Subordinated Securities tendered in a Net
Proceeds Offer at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, Cadmus shall select the Senior
Subordinated Securities to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by Cadmus so that only Senior
Subordinated Securities in denominations of $1,000 or multiples thereof
shall be purchased);
(ii) the Net Proceeds Offer Amount, the purchase price (including
the amount of accrued interest) and the Net Proceeds Offer Payment Date;
PROVIDED that the Net Proceeds Offer Payment Date for the Senior
Subordinated Securities shall be a date subsequent to any payment dates
for the purchase or other repayment of Senior Debt or Guarantor Senior
Debt, as the case may be, having similar provisions;
(iii) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(iv) that unless Cadmus defaults in making payment therefor, any
Senior Subordinated Securities accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Net Proceeds
Offer Payment Date;
(v) that Holders electing to have Senior Subordinated Securities
purchased pursuant to a Net Proceeds Offer will be required to surrender
the Senior Subordinated Securities, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day prior to
the Net Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
fifth Business Day prior to the Net Proceeds Offer Payment Date, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Senior Subordinated Security purchased;
(vii) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior Subordinated Securities
in a principal amount equal to the unpurchased portion of the Senior
Subordinated Securities surrendered; PROVIDED that each Senior
Subordinated Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount of $1,000 or
integral multiples thereof;
(viii) the calculations used in determining the amount of the Net
Proceeds Offer Amount to be applied to the purchase of the Senior
Subordinated Securities;
(ix) any other procedures that a Holder must follow to accept the
Net Proceeds Offer; and
(x) the name and address of the Paying Agent.
On or before the Net Proceeds Offer Payment Date, Cadmus shall
(i) accept for payment Senior Subordinated Securities or portions thereof
tendered pursuant to the Net Proceeds Offer which are to be purchased in
accordance with item (d)(i) above, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of, plus accrued interest, if any,
on, all Senior Subordinated Securities to be purchased or portions thereof and
(iii) deliver to the Trustee Senior Subordinated Securities so accepted together
with an Officers' Certificate stating that the Senior Subordinated Securities or
portions thereof were accepted by Cadmus for payment in accordance with the
terms of this Section 4.06. The Paying Agent shall promptly (but in any case not
later than five Business Days after the Net Proceeds Offer Payment Date) mail or
deliver to each Holder of Senior Subordinated Securities so accepted payment in
an amount equal to the purchase price plus accrued interest, if any, and the
Issuer shall promptly execute and issue New Senior Subordinated Securities, and
the Trustee shall promptly authenticate and mail or deliver to each Holder such
new Senior Subordinated Securities equal in principal amount to any unpurchased
portion of the Senior Subordinated Securities surrendered. For purposes of this
Section 4.06, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Net Proceeds Offer shall be returned by the Paying
Agent to the Issuer.
(e) Cadmus and the Issuer 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 Senior Subordinated Securities pursuant to a Net Proceeds
Offer. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.06, Cadmus and the Issuer shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue
thereof
SECTION 4.07 Maximum Total Leverage Ratio. So long as any Senior
Subordinated Note is outstanding, Cadmus shall not suffer or permit the Total
Leverage Ratio at any time during each period set forth in the chart below to
exceed the applicable ratio set forth opposite such period.
Fiscal Quarter Ending During the Period: Total Leverage Ratio:
---------------------------------------- ---------------------
Issue Date through 6/30/00 4.75 to 1.00
7/1/00 through 6/30/01 4.25 to 1.00
7/1/01 through 6/30/02 4.0 to 1.00
7/1/02 and thereafter 3.5 to 1.00
SECTION 4.08 Transactions with Affiliates. (a) Cadmus will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to occur any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property,
the guaranteeing of any Indebtedness or the rendering of any service) with, or
for the benefit of, any of their respective Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under Section
4.08(b) and (y) Affiliate Transactions on terms that are no less favorable to
Cadmus or such Restricted Subsidiary, as the case may be, than those that could
reasonably have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate of Cadmus or such
Restricted Subsidiary, as the case may be. All Affiliate Transactions (and each
series of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other property with a fair market value in
excess of $1.0 million shall be approved by the Board of Directors of Cadmus or
such Restricted Subsidiary, as the case may be, such approval to be evidenced by
a Board Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If Cadmus or any Restricted
Subsidiary of Cadmus enters into an Affiliate Transaction (or a series of
related Affiliate Transactions which are similar or part of a common plan) that
involves aggregate payments or other property with a fair market value in excess
of $10.0 million, Cadmus or such Restricted Subsidiary, as the case may be,
shall, prior to the consummation thereof, obtain a favorable opinion as to the
fairness of such transaction or series of related transactions to Cadmus or the
relevant Restricted Subsidiary, as the case may be, from a financial point of
view, from an Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in Section 4.08(a) shall not apply
to (i) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers, directors, employees or consultants of Cadmus or any
Restricted Subsidiary of Cadmus as determined reasonably and in good faith by
the Board of Directors or senior management of Cadmus or such Restricted
Subsidiary, as the case may be; (ii) transactions exclusively between or among
Cadmus and any of its Wholly Owned Restricted Subsidiaries or exclusively
between or among such Wholly Owned Restricted Subsidiaries; PROVIDED that such
transactions are not otherwise prohibited by this Indenture; (iii) Restricted
Payments permitted by this Indenture; (iv) transactions effected as part of a
Qualified Securitization Transaction; and (v) any agreement as in effect as of
the Issue Date or any amendment thereto and any transaction contemplated thereby
(including pursuant to any amendment) or 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 4.09 Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder will have the right to require that Cadmus
purchase all or a portion of such Holder's Senior Subordinated Securities
pursuant to the offer described below (the "Change of Control Offer"), at a
purchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in
any event within 30 days following any Change of Control, Cadmus will (i) repay
in full and terminate all commitments under the Credit Agreement and all other
Senior Debt the terms of which require repayment upon a Change of Control or
offer to repay in full and terminate all commitments under the Credit Agreement
and all other such Senior Debt and to repay the Indebtedness owed to each lender
which has accepted such offer or (ii) obtain the requisite consents under the
Credit Agreement and all other Senior Debt to permit the repurchase of the
Senior Subordinated Securities as provided below. Cadmus must first comply with
the covenant described in the preceding sentence before it shall be required to
repurchase Senior Subordinated Securities in the event of a Change of Control;
provided that Cadmus' failure to comply with the covenant described in the
preceding sentence shall constitute an Event of Default described in clause (c)
and not in clause (b) under Section 6.01.
(c) Within 30 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), Cadmus will send, by first
class mail, a notice to each Holder, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Senior Subordinated Securities pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.09 and that all Senior Subordinated
Securities tendered and not withdrawn will be accepted for
payment;
(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier
than 20 Business Days nor later than 30 Business Days from
the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
PROVIDED that the Change of Control Payment Date for the
Senior Subordinated Securities shall be a date subsequent
to any payment dates for the purchase or other repayment
of Senior Debt having similar provisions;
(3) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(4) that, unless Cadmus defaults in making payment therefor,
any Senior Subordinated Securities accepted for payment
pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Senior Subordinated
Security purchased pursuant to a Change of Control Offer
will be required to surrender the Senior Subordinated
Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Senior Subordinated
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control
Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of
business on the fifth Business Day prior to the Change of
Control Payment Date, a telex, facsimile transmission or
letter setting forth the name of the Holder, the principal
amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Senior Subordinated
Securities purchased;
(7) that Holders whose Senior Subordinated Securities are
purchased only in part will be issued new Senior
Subordinated Securities in a principal amount equal to the
unpurchased portion of the Senior Subordinated Securities
surrendered; PROVIDED that each Senior Subordinated
Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof;
(8) the circumstances and relevant facts regarding such Change
of Control;
(9) any other procedures that a Holder must follow to accept
the Change of Control Offer; and
(10) the name and address of the Paying Agent.
On or before the Change of Control Payment Date, Cadmus shall (i)
accept for payment Senior Subordinated Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the purchase price of, plus accrued and unpaid
interest, if any, on, all Senior Subordinated Securities so tendered and (iii)
deliver to the Trustee Senior Subordinated Securities so accepted together with
an Officers' Certificate stating that the Senior Subordinated Securities or
portions thereof were accepted by Cadmus for payment in accordance with the
terms of this Section 4.09. The Paying Agent shall promptly (but in any case not
later than five Business Days after the Change of Control Payment Date) mail or
deliver to each Holder of Senior Subordinated Securities so accepted payment in
an amount equal to the purchase price plus accrued and unpaid interest, if any,
and Cadmus shall promptly execute and issue new Senior Subordinated Securities,
and the Trustee shall promptly authenticate and mail or deliver to each Holder
new Senior Subordinated Securities equal in principal amount to any unpurchased
portion of the Senior Subordinated Securities surrendered. Any Senior
Subordinated Securities not so accepted shall be promptly mailed by Cadmus to
the Holder thereof. For purposes of this Section 4.09, the Trustee shall act as
the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated
Securities pursuant to a Change of Control Offer shall be returned by the Paying
Agent to Cadmus.
(d)(A) If Cadmus or any Restricted Subsidiary thereof has issued
any outstanding (i) Indebtedness that is subordinated in right of payment to the
Senior Subordinated Securities or (ii) Preferred Stock, and Cadmus or such
Restricted Subsidiary is required to make an offer to purchase or a distribution
with respect to such subordinated Indebtedness or Preferred Stock in the event
of a Change of Control, Cadmus shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as Cadmus shall have paid the purchase price in full to the
Holders of Senior Subordinated Securities that have accepted Cadmus' Change of
Control Offer and shall otherwise have consummated the Change of Control Offer
made to Holders of the Senior Subordinated Securities and (B) neither the Issuer
nor Cadmus shall issue or guarantee Indebtedness that is subordinated in right
of payment to the Senior Subordinated Securities or Preferred Stock with change
of control provisions requiring the payment of such Indebtedness or Preferred
Stock prior to the payment of the Senior Subordinated Securities in the event of
a Change in Control under this Indenture.
(e) Neither the Board of Directors of the Issuer nor the Trustee
may waive the provisions of this Section 4.09 relating to a Holder's right to
redemption upon a Change of Control. Cadmus and the Issuer 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 Senior Subordinated Securities
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.09, Cadmus and the Issuer shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
provisions of this Section 4.09 by virtue thereof
SECTION 4.10 Compliance Certificate. The Issuer and each
Guarantor shall deliver to the Trustee within 90 days after the end of each
fiscal year of Cadmus an Officers' Certificate (one of the signers of which
shall be the principal executive officer, principal financial officer or
principal accounting officer of such Person) stating that a review of the
activities of Cadmus and its Subsidiaries has been made under the supervision of
the signing Officers with a view to determining whether Cadmus and its
Subsidiaries have kept, observed, performed and fulfilled their obligations
under this Indenture, and further stating, as to each Officer signing such
certificate, that to the best of his or her knowledge Cadmus and its
Subsidiaries have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and are 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 such Default 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 Senior
Subordinated Securities are prohibited or if such event has occurred, a
description of the event and what action Cadmus and its Subsidiaries are taking
or propose to take with respect thereto.
SECTION 4.11 Maintenance of Properties and Insurance . (a)
Subject to Article V, Cadmus shall cause all material properties owned by or
leased to it or any of its Subsidiaries and used or useful in the conduct of its
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
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
Cadmus 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 4.11 shall prevent Cadmus 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 Cadmus or such Subsidiary
concerned, or of an Officer (or other agent employed by Cadmus or of any such
Subsidiary) of Cadmus or such Subsidiary having managerial responsibility for
any such property, desirable in the conduct of the business of Cadmus or any
such Subsidiary of Cadmus, and if such discontinuance or disposal is not adverse
in any material respect to the Holders.
(b) Cadmus will maintain, and will cause each of its Subsidiaries
to maintain (either in the name of Cadmus or in such Subsidiary's own name),
with responsible carriers, insurance 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 or similar size,
including property and casualty loss, workers' compensation, and interruption of
business insurance, and as otherwise may be necessary in the judgment of Cadmus.
SECTION 4.12 Limitation on Liens. Other than Permitted Liens,
Cadmus will not, and will not cause or permit any of its Restricted Subsidiaries
to, directly or indirectly, create, Incur, assume or permit or suffer to exist
any Liens of any kind against or upon any property or assets of Cadmus or any of
its Restricted Subsidiaries whether owned on the Issue Date or acquired after
the Issue Date, or any proceeds therefrom, or assign or otherwise convey any
right to receive income or profits therefrom unless (i) in the case of Liens
securing Indebtedness that is expressly subordinate or junior in right of
payment to the Senior Subordinated Securities, the Senior Subordinated
Securities are secured by a Lien on such property, assets or proceeds that is
senior in priority to such Liens at least to the same extent that the Senior
Subordinated Securities are senior in priority to such Indebtedness and (ii) in
all other cases, the Senior Subordinated Securities are equally and ratably
secured.
SECTION 4.13 Additional Subsidiary Guarantees. If Cadmus or any
of its Restricted Subsidiaries transfers or causes to be transferred, in one
transaction or a series of related transactions, any property to any Domestic
Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor, or if
Cadmus or any of its Restricted Subsidiaries shall organize, acquire or
otherwise invest in or hold an Investment in a Domestic Restricted Subsidiary
that is not the Issuer or a Guarantor having total consolidated assets, with a
book value in excess of $2.0 million, then such transferee or acquired or other
Domestic Restricted Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture
in form satisfactory to the Trustee pursuant to which such Domestic
Restricted Subsidiary shall unconditionally guarantee all of the
Issuer's Obligations under the Senior Subordinated Securities and this
Indenture on the terms set forth in this Indenture; and
(2) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered
by such Domestic Restricted Subsidiary and constitutes a legal, valid,
binding and enforceable obligation of such Domestic Restricted
Subsidiary;
PROVIDED, HOWEVER, that notwithstanding the foregoing, each transferee or
acquired Domestic Restricted Subsidiary or other Domestic Restricted Subsidiary
organized by Cadmus or any of its Restricted Subsidiaries or in which Cadmus or
any of its Restricted Subsidiaries shall invest or hold an Investment shall
comply with clauses (1) and (2) above if such Domestic Restricted Subsidiary,
together with Cadmus' other Restricted Subsidiaries that are not Guarantors,
after giving PRO FORMA effect to such transfer, organization, acquisition or
Investment, would constitute a Significant Subsidiary of Cadmus (using 5.0%,
rather than 10.0%, for purposes of such calculation).
Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for
all purposes of this Indenture.
SECTION 4.14 No Layering. Cadmus will not, and will not permit
any Issuer or Subsidiary Guarantor to, Incur or suffer to exist Indebtedness
that is senior in right of payment to the Senior Subordinated Securities or such
Subsidiary Guarantor's Subsidiary Guarantee, as the case may be, and
subordinated in right of payment to any other Indebtedness of Cadmus or such
Subsidiary Guarantor's Subsidiary Guarantee, as the case may be.
SECTION 4.15 Capital Expenditures. So long as any Senior
Subordinated Note is outstanding, the aggregate amount of all Capital
Expenditures Incurred after the Issue Date will not exceed in the aggregate in
any fiscal year of Cadmus the sum of $30.0 million; PROVIDED that after giving
effect to the Incurrence of any Capital Expenditures permitted by this Section
4.15, no Default or Event of Default shall have occurred and be continuing.
SECTION 4.16 Conduct of Business. Cadmus shall not, and shall not
permit any of its Restricted Subsidiaries to, engage in any businesses other
than a Permitted Business.
SECTION 4.17 Environmental Matters. So long as any Senior
Subordinated Note is outstanding, Cadmus and its Subsidiaries will not, and will
not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for: (1)
Hazardous Materials such as inks, other chemicals used in printing operations,
cleaning solvents, pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed, managed
or otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements; and (2) the trichloroethylene that is
being remediated at the property commonly known as 3575 Hempland Road,
Lancaster, Pennsylvania.
SECTION 4.18 Environmental Release. So long as any Senior
Subordinated Note is outstanding, Cadmus agrees that upon the occurrence of an
Environmental Release at or on any of the Properties it will act immediately to
investigate the extent of, and to take appropriate remedial action to eliminate,
such Environmental Release, whether or not ordered or otherwise directed to do
so by any Environmental Authority.
SECTION 4.19 Compliance with Laws. Cadmus 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 are
not in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of Cadmus and its Subsidiaries,
taken as a whole.
SECTION 4.20 Payment of Taxes and Other Claims. Cadmus shall, and
shall cause each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon Cadmus or any such
Subsidiary or upon the income, profits or property of Cadmus or any such
Subsidiary and (2) all lawful claims for labor, materials and supplies which, in
each case, if unpaid, might by law become a material liability, or Lien upon the
property, of Cadmus or any such Subsidiary; PROVIDED, HOWEVER, that neither
Cadmus nor any of its Subsidiaries shall 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 and for which appropriate provision has been made.
SECTION 4.21 Notice of Defaults. Upon becoming aware of any
Default or Event of Default, the Issuer and Cadmus shall promptly deliver an
Officers' Certificate to the Trustee specifying the Default or Event of Default,
and what action Cadmus is taking or proposes to take with respect thereto.
SECTION 4.22 Waiver of Stay, Extension or Usury Laws. Each of the
Issuer and the Guarantors covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Issuer or such
Guarantor from paying all or any portion of the principal of, premium, if any,
and/or interest on the Senior Subordinated Securities 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 Issuer and each Guarantor hereby expressly waive all benefit
or advantage of any such law, and covenant that they shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries.
Cadmus will not cause or permit any of its Restricted Subsidiaries to issue to
any Person (other than to Cadmus or to a Wholly Owned Restricted Subsidiary of
Cadmus) any Preferred Stock or permit any Person (other than Cadmus or a Wholly
Owned Restricted Subsidiary of Cadmus) to own any Preferred Stock of any
Restricted Subsidiary of Cadmus.
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries. The Board of Directors of Cadmus may designate an Unrestricted
Subsidiary of Cadmus to be a Restricted Subsidiary of Cadmus under this
Indenture only if: (1) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such designation; (2) any
such designation shall be deemed to be an Incurrence as of the date of such
designation by a Restricted Subsidiary of Cadmus of the Indebtedness (if any) of
such designated Subsidiary of Cadmus for purposes of Section 4.03; and (3)
immediately after giving effect to such designation and the Incurrence of such
additional Indebtedness, Cadmus is able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.03.
The Board of Directors of Cadmus may designate any Restricted
Subsidiary of Cadmus (other than the Issuer or a Guarantor) to be an
Unrestricted Subsidiary of Cadmus under this Indenture only if: (1) no Default
or Event of Default shall have occurred and be continuing at the time of or
after giving effect to such designation; (2) such designation is at that time
permitted pursuant to Section 4.04 (other than pursuant to clause (viii) of the
definition of Permitted Investments); and (3) immediately after giving effect to
such designation, Cadmus is able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.03.
Any such designation by the Board of Directors of Cadmus of an
Unrestricted Subsidiary to be a Restricted Subsidiary or of a Restricted
Subsidiary to be an Unrestricted Subsidiary shall be evidenced to the Trustee by
the filing with the Trustee of a Board Resolution of Cadmus giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and setting forth in reasonable detail
the underlying calculations.
For purposes of Section 4.04: (1) an Investment shall be deemed
to have been made at the time any Restricted Subsidiary of Cadmus is designated
to be an Unrestricted Subsidiary of Cadmus in an amount (proportionate to
Cadmus' equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
to be an Unrestricted Subsidiary; (2) at any date the aggregate amount of all
Restricted Payments made as Investments since the Issue Date shall exclude and
be reduced by an amount (proportionate to Cadmus' equity interest in such
Subsidiary) equal to the net worth of any Unrestricted Subsidiary of Cadmus at
the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary
of Cadmus, not to exceed, in the case of any such designation of an Unrestricted
Subsidiary of Cadmus as a Restricted Subsidiary of Cadmus, the amount of
Investments previously made by Cadmus and its Restricted Subsidiaries in such
Unrestricted Subsidiary (in the case of each of clauses (1) and (2), "net worth"
shall be calculated based upon the fair market value of the assets of such
Subsidiary as of any such date of designation); and (3) any property transferred
to or from an Unrestricted Subsidiary of Cadmus shall be valued at its fair
market value at the time of such transfer.
Notwithstanding the foregoing, the Board of Directors of Cadmus
may not designate any Restricted Subsidiary of Cadmus to be an Unrestricted
Subsidiary of Cadmus if, after such designation: (1) Cadmus or any of its
Restricted Subsidiaries (x) provides credit support for, or a guarantee of, any
Indebtedness of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (y) is directly or indirectly liable
for any Indebtedness of such Restricted Subsidiary; (2) a default with respect
to any Indebtedness of such Subsidiary (including any right which the holders
thereof may have to take enforcement action against such Restricted Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of Cadmus or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its final stated maturity; or (3) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
Subsidiaries of Cadmus that are not designated by the Board of
Directors of Cadmus as Restricted or Unrestricted Subsidiaries will be deemed to
be Restricted Subsidiaries. Except as otherwise permitted by Article V, the
Issuer shall at all times be a Restricted Subsidiary.
SECTION 4.25 Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where (a) Senior Subordinated Securities may be presented or surrendered for
registration of transfer or for exchange, (b) Senior Subordinated Securities may
be presented or surrendered for payment and (c) notices and demands in respect
of the Senior Subordinated Securities and this Indenture may be served. The
Issuer 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 Issuer
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 to or served on the Trustee, c/o Wilmington
Trust FSB, 520 Madison Avenue, 33rd Floor, New York, New York 10022. The Issuer
hereby initially designates the Trustee at its address c/o Wilmington Trust FSB,
520 Madison Avenue, 33rd Floor, New York, New York 10022 as its office or agency
in the Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.26 Corporate Existence. Except as otherwise permitted
by Article V, Cadmus shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of the Issuer and each of Cadmus'
Restricted Subsidiaries in accordance with the respective organizational
documents of the Issuer each Restricted Subsidiary and the rights (charter and
statutory), licenses and franchises of Cadmus, the Issuer and each of Cadmus'
Restricted Subsidiaries; PROVIDED, HOWEVER, that Cadmus shall not be required to
preserve any such right, licenses and franchises or corporate existence of any
Restricted Subsidiary other than the Issuer if the Board of Directors of Cadmus
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Cadmus and its Restricted Subsidiaries, taken as a
whole, and that the loss thereof is not, and will not be, adverse in any
material respect to the Holders.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01 Merger, Consolidation or Sale of All or
Substantially All Assets of Cadmus. Cadmus will not, in a single transaction or
series of related transactions, consolidate or merge with or into any Person, or
sell, assign, transfer, lease, convey or otherwise dispose of (or cause or
permit any Restricted Subsidiary of Cadmus to sell, assign, transfer, lease,
convey or otherwise dispose of) all or substantially all of Cadmus' assets
(determined on a consolidated basis for Cadmus and Cadmus' Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless: (i) either (1) Cadmus shall be the surviving or continuing
corporation or (2) the Person (if other than Cadmus) formed by such
consolidation or into which Cadmus is merged or the Person which acquires by
sale, assignment, transfer, lease, conveyance or other disposition the
properties and assets of Cadmus and of Cadmus' Restricted Subsidiaries
substantially as an entirety (the "Surviving Entity") (x) shall be a corporation
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (y) either (A) if the Issuer has not
been merged or consolidated with the Surviving Entity or all or substantially
all of the Issuer's assets have not been sold, assigned, transferred, conveyed
or otherwise disposed of to the Surviving Entity, Cadmus shall have, by
supplemental indenture (in form and substance acceptable to the Trustee) to this
Indenture, confirmed that its guarantee of the Senior Subordinated Securities
shall apply to such Person's obligations under this Indenture and the Senior
Subordinated Securities or (B) if the Issuer has been merged or consolidated
with the Surviving Entity or all or substantially all of the Issuer's assets
have been sold, assigned, transferred, conveyed or otherwise disposed of to the
Surviving Entity, expressly assume, by supplemental indenture, executed and
delivered to the Trustee, the due and punctual payment of the principal of and
interest on all of the Senior Subordinated Securities and the performance of
every covenant of the Senior Subordinated Securities, this Indenture and the
Registration Rights Agreement on the part of the Issuer to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption or confirmation contemplated by clause (i)(2)(y) above (including
giving effect to any Indebtedness and Acquired Indebtedness Incurred or
anticipated to be Incurred in connection with or in respect of such
transaction), Cadmus or such Surviving Entity, as the case may be, (x) shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of Cadmus immediately prior to such transaction and (y) shall be able to
Incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with the provisions of Section 4.03 of this
Indenture; (iii) immediately before and immediately after giving effect to such
transaction and the assumption or confirmation contemplated by clause (i)(2)(y)
above (including giving effect to any Indebtedness and Acquired Indebtedness
Incurred or anticipated to be Incurred and any Lien granted in connection with
or in respect of the transaction), no Default or Event of Default shall have
occurred or be continuing; (iv) each Subsidiary Guarantor unless it is the other
party to the transactions described above, shall have by supplemental indenture
to this Indenture confirmed that its guarantee of the Senior Subordinated
Securities shall apply to such Person's obligations under this Indenture and the
Senior Subordinated Securities; and (v) Cadmus or the Surviving Entity, as the
case may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
For purposes of this Section 5.01, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of Cadmus the Capital Stock of which constitutes
all or substantially all of the properties and assets of Cadmus, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
Cadmus.
SECTION 5.02 Merger or Consolidation of the Issuer. (a) Neither
Cadmus nor the Issuer may not consolidate with or merge with or into (whether or
not the Issuer is the surviving Person) another Person unless:
(i) the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall be a corporation organized and validly
existing under the laws of the United States or any State thereof or the
District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Issuer) shall expressly assume, by
supplemental indenture (in form and substance satisfactory to the
Trustee), execute and deliver to the Trustee, the due and punctual
payment of the principal of and interest on all of the Senior
Subordinated Securities and the performance of every covenant of the
Senior Subordinated Securities, this Indenture and the Registration
Rights Agreement on the part of the Issuer to be performed or observed;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iv) Cadmus, the Issuer or such Surviving Entity, as the case may
be, shall have a Consolidated Net Worth equal to or greater than Cadmus'
or the Issuer's Consolidated Net Worth, as the case may be, immediately
prior to such transaction;
(v) immediately after giving effect to such transaction, Cadmus
could satisfy the provisions of Section 5.01(a)(ii) of this Indenture;
and
(vi) the Person formed by or surviving such consolidation or merger
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation or merger and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the applicable
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.
(b) Upon (1) any consolidation, combination or merger or transfer
of all or substantially all of the assets of the Issuer in accordance with the
provisions of Section 5.02(a) in which the Issuer is not the continuing
corporation or (2) any consolidation or merger of the Issuer in accordance with
the provisions of Section 5.02(a) in which the Issuer is not the continuing
corporation, the successor Person formed by such consolidation or into which the
Issuer is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture and the Senior Subordinated Securities with the
same effect as if such successor Person had been named as such.
SECTION 5.03 Merger or Consolidation of a Subsidiary Guarantor.
No Subsidiary Guarantor (other than a Subsidiary Guarantor whose Subsidiary
Guarantee is to be released in accordance with Section 11.05 of this Indenture
and other than Cadmus) may consolidate with or merge with or into (whether or
not such Subsidiary Guarantor is the surviving Person) another Person (other
than the Issuer or another Subsidiary Guarantor) unless:
(i) the Person formed by or surviving such consolidation or merger
(if other than the Guarantor) shall be a corporation organized and
validly existing under the laws of the United States or any State
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee and this
Indenture pursuant to a supplemental indenture in form and substance
satisfactory to the Trustee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iv) the Subsidiary Guarantor or such Surviving Entity, as the case
may be, shall have a Consolidated Net Worth equal to or greater than the
Subsidiary Guarantor's or such other Person's Consolidated Net Worth, as
the case may be, immediately prior to such transaction;
(v) immediately after giving effect to such transaction, Cadmus
could satisfy the provisions of Section 5.01(a)(ii) of this Indenture;
and
(vi) the Person formed by or surviving such consolidation or merger
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation or merger and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with the applicable
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.
Notwithstanding the foregoing clauses (iii), (iv), (v) and (vi)
above, any Guarantor (including, without limitation, Cadmus) may consolidate
with or merge with or into the Issuer (with the Issuer being the surviving
entity) or any other Guarantor.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default and Remedies. The following events
are "Events of Default":
(a) the failure to pay interest on any Senior Subordinated
Securities when the same becomes due and payable and such default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the provisions of Article X or XII);
(b) the failure to pay the principal on any Senior Subordinated
Securities when such principal becomes due and payable, at maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Senior Subordinated Securities tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer) (whether or not such payment
shall be prohibited by the provisions of Article X or XII);
(c) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 30 days after the Issuer receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or to the Issuer and the Trustee by the
Holders of least 25% of the outstanding principal amount of the Senior
Subordinated Securities (except in the case of a default with respect to
the provisions of Article V, which will constitute an Event of Default
with such notice requirement but without such passage of time
requirement);
(d) the failure to pay at final stated maturity (giving effect to
any applicable grace periods and any extensions thereof) the principal
amount of any of the Junior Subordinated Notes or any other Indebtedness
of Cadmus or any Restricted Subsidiary of Cadmus (other than a
Securitization Entity), or the acceleration of the final stated maturity
of any of the Junior Subordinated Notes or any such other Indebtedness
(which acceleration is not rescinded, annulled or otherwise cured within
20 days after receipt by Cadmus or such Restricted Subsidiary of notice
of any such acceleration), if, in the case of any such other
Indebtedness, the aggregate principal amount of such Indebtedness,
together with the principal amount of any other Indebtedness in default
for failure to pay principal at final maturity or which has been
accelerated, aggregate $10.0 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of
$10.0 million (which are not covered by third party insurance as to
which the insurer has not disclaimed coverage) shall have been rendered
against Cadmus or any of its Restricted Subsidiaries and such judgments
remain undischarged, unpaid or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable; or
(f) the Issuer, Cadmus or any Subsidiary of Cadmus that is a
Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law: (A) commences a voluntary case or proceeding; (B)
consents to the entry of an order for relief against it in an
involuntary case or proceeding; (C) consents to the appointment of a
custodian of it or for any substantial part of its property; (D) makes a
general assignment for the benefit of its creditors, takes any
comparable action under any foreign laws relating to insolvency or any
of them takes any 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 Issuer,
Cadmus or any Subsidiary of Cadmus that is a Significant Subsidiary in
an involuntary case or proceeding; (B) appoints a custodian of the
Issuer, Cadmus or any Subsidiary of Cadmus that is a Significant
Subsidiary or for any substantial part of its property; (C) orders the
winding up or liquidation of the Issuer, Cadmus or any Subsidiary of
Cadmus that is a Significant Subsidiary; or (D) any similar relief is
granted under any foreign laws and, in each case, the order or decree
relating thereto remains unstayed and in effect for 60 days; and
(h) any Guarantor Guarantee of Cadmus or a Subsidiary of Cadmus
that is a Significant Subsidiary ceases to be in full force and effect
or any Guarantor Guarantee of Cadmus or a Subsidiary of Cadmus that is a
Significant Subsidiary is declared to be null and void and unenforceable
or any Guarantor Guarantee of Cadmus or a Subsidiary of Cadmus that is a
Significant Subsidiary is found to be invalid or Cadmus or any Guarantor
that is a Significant Subsidiary of Cadmus denies its liability under
its Guarantor Guarantee (other than by reason of release of a Guarantor
in accordance with Section 11.05 of this Indenture).
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar federal or state law for the relief of debtors. For purposes of this
Article VI only, the term "custodian" means any receiver, trustee, assignee,
liquidator, sequestrator, or similar official under any Bankruptcy Law.
SECTION 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(f) or (g) with respect to the Issuer
or a Guarantor) shall occur and be continuing, the Trustee or the Holders of at
least 25% in principal amount of outstanding Senior Subordinated Securities may,
and the Trustee upon the request of the Holders of at least 25% in principal
amount of outstanding Senior Subordinated Securities shall, declare the
principal of, premium, if any, and accrued and unpaid interest on all the
outstanding Senior Subordinated Securities to be due and payable by notice in
writing to the Issuer and the Trustee specifying the respective Event of Default
and that it is a "notice of acceleration" (the "Acceleration Notice"), and the
same (i) shall become immediately due and payable or (ii) if there are any
amounts outstanding under the Credit Agreement or any "Revolving Credit
Commitment" or "Term Loan Commitment" (as each such term is defined in the
Credit Agreement) is in effect, shall become immediately due and payable upon
the first to occur of an acceleration under the Credit Agreement or five
Business Days after receipt by Cadmus and the Representative under the Credit
Agreement of such Acceleration Notice but only if such Event of Default is then
continuing. If an Event of Default specified in Section 6.01(f) or (g) with
respect to the Issuer or a Guarantor occurs and is continuing, then all unpaid
principal of, premium, if any, and accrued and unpaid interest on all of the
outstanding Senior Subordinated Securities shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration with respect to
the Senior Subordinated Securities as described in the preceding paragraph, the
Holders of a majority in principal amount of Senior Subordinated Securities may
rescind and cancel such declaration and its consequences (i) if the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Issuer has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and all
other amounts due pursuant to Section 7.07 and (v) in the event of the cure or
waiver of an Event of Default of the type described in Section 6.01(f) or (g)
the Trustee shall have received an Officers' Certificate of the Issuer 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.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Senior Subordinated Securities or to enforce
the performance of any provision of the Senior Subordinated Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Subordinated Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of Senior
Subordinated Securities in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults. Subject to Section 6.02,
the Holders of a majority in aggregate principal amount of the Senior
Subordinated Securities then outstanding by written notice to the Trustee may on
behalf of the Holders of all of the Senior Subordinated Securities waive any
existing Default or Event of Default and its consequences except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
the Senior Subordinated Securities. When a Default is waived, it is deemed cured
and ceases to exist and any Event of Default arising therefrom shall be deemed
to have been cured and waived for every purpose under this Indenture, but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any consequent right.
SECTION 6.05 Control by Majority. Subject to Section 13.06, the
Holders of a majority in aggregate principal amount of the outstanding Senior
Subordinated Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee by this Indenture. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders of Senior Subordinated Securities, it being
understood that subject to Section 7.01 the Trustee shall have no duty or
obligation to determine whether or not such actions or forbearances are unduly
prejudicial to such Holders, or would involve the Trustee in personal liability;
PROVIDED, HOWEVER, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 6.06 Limitation on Suits. Except to enforce the right to
receive payment of principal or interest when due, a Holder of Senior
Subordinated Securities may not pursue any remedy with respect to this Indenture
or the Senior Subordinated Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Senior Subordinated Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of
the Senior Subordinated Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
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, premium, if any, and interest on such
Holder's Senior Subordinated Securities, on or after the respective due dates
expressed in the Senior Subordinated Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer or any other obligor on the Senior Subordinated Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest overdue on principal and to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
per annum borne by the Senior Subordinated Securities and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 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 and the Holders allowed in
any judicial proceedings relative to the Issuer or any other obligor upon the
Senior Subordinated Securities, their respective creditors or their property and
shall be entitled and empowered to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior Subordinated Securities or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent
required by Article X or XII;
THIRD: to Holders for amounts due and unpaid on the Senior
Subordinated Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Subordinated Securities for principal and
interest, respectively; and
FOURTH: to the Issuer or the Guarantors, as their
respective interests may appear.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Holder and the Issuer a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Senior Subordinated
Securities.
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this Section 7.01(c) does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise Incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02 Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate of the Issuer or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does
not constitute willful misconduct or negligence.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in principal
amount of the Senior Subordinated Securities at the time outstanding,
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
Issuer, personally or by agent or attorney.
(f) The Trustee shall not be required to give any note, bond or
surety in respect of the execution of the trusts and powers under this
Indenture.
(g) The permissive rights of the Trustee to take any action
enumerated in this Indenture shall not be construed as a duty to take
such action.
(h) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(i) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee may, in
the absence of bad faith on its part, rely upon an Officers' Certificate
of the Issuer or any Guarantor.
(j) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Senior Subordinated
Securities unless either (1) a Trust Officer shall have actual knowledge
of such Default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by the
Issuer, the Guarantors or any Holder.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior
Subordinated Securities and may otherwise deal with the Issuer, the Guarantors
or their respective Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Guarantor Guarantee or the Senior Subordinated Securities,
it shall not be accountable for the Issuer's use of the proceeds of the Senior
Subordinated Securities or any money paid to the Issuer or upon the Issuer's
direction under any provision of this Indenture and it shall not be responsible
for any statement of the Issuer or any Guarantors in this Indenture or in any
document issued in connection with the issuance of the Senior Subordinated
Securities or in the Senior Subordinated Securities other than the Trustee's
certificate of authentication.
SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is actually known to the Trustee, the Trustee shall mail to
each Holder of Senior Subordinated Securities at the expense of the Issuer
notice of the Default within the earlier of 90 days after it occurs or 30 days
after it is known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in payment of principal of or interest
on any Senior Subordinated Security, including an acceleration under Section
6.02, the Trustee may withhold the notice if and so long as a committee of its
trust officers in good faith determines that withholding the notice is in the
interests of the Holders of the Senior Subordinated Securities. Notwithstanding
anything to the contrary expressed in this Indenture, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default hereunder, except in
the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is
acting as the Paying Agent, unless and until a Trust Officer receives written
notice thereof at its Corporate Trust Office specified in Section 13.02, from
the Issuer, a Guarantor or a Holder that such Default or Event of Default has
occurred.
SECTION 7.06 Reports by Trustee to Holders. The Trustee shall
transmit to the Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times and in
the manner provided pursuant thereto. To the extent that any such report is
required by the TIA with respect to any 12-month period, such report shall cover
the 12-month period ending December 31 and shall be transmitted by the next
succeeding March 1.
A copy of each report at the time of its mailing to Holders of
Senior Subordinated Securities shall be filed with the Commission and each stock
exchange (if any) on which the Senior Subordinated Securities are listed. The
Issuer agrees to notify promptly the Trustee whenever the Senior Subordinated
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Issuer shall pay to
the Trustee from time to time such reasonable compensation as is agreed to in
writing by the Trustee and Issuer for the Trustee's services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee upon request
for all reasonable out-of-pocket disbursements, advances and expenses Incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Issuer and each Guarantor, jointly and severally,
shall indemnify the Trustee and its officers, directors, shareholders, agents
and employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, liability or expense (including reasonable
attorneys' fees) Incurred by them without negligence or bad faith on their part
arising out of or in connection with the acceptance or administration of this
Indenture or the Senior Subordinated Securities and the performance of their
duties hereunder, including the cost and expense of enforcing this Indenture
against the Issuer (including this Section 7.07), and defending itself against
any claim (whether asserted by a Holder or any other Person). The Trustee and
its officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Issuer of any claim
for which it may seek indemnity promptly upon obtaining actual knowledge
thereof, PROVIDED that any failure so to notify the Issuer shall not relieve the
Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer shall
defend the claim and the Indemnified Party shall provide reasonable cooperation
at the Issuer's expense in the defense. Such Indemnified Parties may have
separate counsel and the Issuer shall pay the reasonable fees and expenses of
such counsel; provided that the Issuer shall not be required to pay such fees
and expenses if it assumes such Indemnified Parties' defense and in such
Indemnified Parties' reasonable judgment, there is no conflict of interest
between the Issuer and such Indemnified Parties in connection with such defense.
The Issuer and the Guarantors need not reimburse any expense or indemnify
against any loss, liability or expense Incurred by an Indemnified Party through
such party's own willful misconduct, negligence or bad faith. The Issuer and the
Guarantors need not pay any settlement made without the Issuer's consent (which
consent shall not be unreasonably withheld).
To secure the Issuer's and the Guarantors' payment obligations in
this Section 7.07, the Trustee shall have a lien on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Senior Subordinated Securities. Such
lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee. The Trustee's right to receive payment of
any amounts due under this Indenture shall not be subordinated to any other
indebtedness of the Issuer or the Guarantors and the Senior Subordinated
Securities shall be subordinate to the Trustee's rights to receive such payment.
The Issuer's and the Guarantors' payment obligations pursuant to
this Section 7.07 shall survive the satisfaction or discharge of this Indenture,
any rejection or termination of this Indenture under any Bankruptcy Law or the
resignation or removal of the Trustee. When the Trustee Incurs expenses after
the occurrence of a Default specified in Section 6.01(f) or (g) with respect to
the Issuer or any Guarantor, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign at
any time by so notifying the Issuer in writing. The Holders of a majority in
principal amount of the Senior Subordinated Securities may remove the Trustee by
so notifying the Trustee and the Issuer in writing and may appoint a successor
Trustee. The Issuer shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Issuer or by the
Holders of a majority in principal amount of the Senior Subordinated Securities
and such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Issuer shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of at least 10% in aggregate principal amount of the Senior Subordinated
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Issuer's and the Guarantors' obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, PROVIDED that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Senior Subordinated Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Senior Subordinated Securities so authenticated; and in case at that time any of
the Senior Subordinated Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Senior Subordinated Securities
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Senior Subordinated Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Issuer.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Legal Defeasance and Covenant Defeasance. (a) The
Issuer may, at the option of its Board of Directors evidenced by a Board
Resolution set forth in an Officers' Certificate of the Issuer, at any time,
elect to have either Section 8.01(b) or 8.01(c) be applied to all outstanding
Senior Subordinated Securities upon compliance with the conditions set forth
below in this Article VIII.
(b) Upon the Issuer's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(b), the Issuer and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
deemed to have been discharged from their obligations with respect to all
outstanding Senior Subordinated Securities and any Guarantor Guarantee on the
date the conditions set forth below are satisfied ("Legal Defeasance"). For this
purpose, Legal Defeasance means that the Issuer and each Guarantor shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Subordinated Securities and any Guarantor Guarantee, which
Senior Subordinated Securities and Guarantor Guarantees shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.03 and the other
Sections of this Indenture referred to in clauses (i) and (ii) below, and to
have satisfied all their other obligations under such Senior Subordinated
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Senior
Subordinated Securities to receive payments in respect of the principal of and
interest on such Senior Subordinated Securities, solely from the trust fund
described in Section 8.02, when such payments are due, (ii) the Issuer's
obligations with respect to the Senior Subordinated Securities under Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07, 7.08, 8.04, 8.05, 9.01, 9.02 and 9.03
which shall survive until the Senior Subordinated Securities have been paid in
full (thereafter, the Issuer's obligations in Section 7.07 shall survive), and
(iii) this Article VIII. Subject to compliance with this Article VIII, the
Issuer may exercise its option under this Section 8.01(b) notwithstanding the
prior exercise of its option under Section 8.01(c).
(c) Upon the Issuer's exercise under Section 8.01(a) of the
option applicable to this Section 8.01(c), the Issuer and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19,
4.20, 4.21, 4.22, 4.23, 4.24, 4.25 and 4.26 and Article V with respect to the
outstanding Senior Subordinated Securities on and after the date the conditions
set forth below are satisfied ("Covenant Defeasance"), and the Senior
Subordinated Securities shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration of act of Holders (and
the consequences of any thereof) in connection with such Sections, but shall
continue to be deemed "outstanding" for all the other purposes hereunder. For
this purpose, Covenant Defeasance means that, with respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01, but, except as specified above, the
remainder of this Indenture and such Senior Subordinated Securities shall be
unaffected thereby.
SECTION 8.02 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.01(b)
or 8.01(c) to the outstanding Senior Subordinated Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance, (i) the Issuer must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender, non-callable 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 and interest on the Senior Subordinated Securities on
the stated date for payment thereof or on the applicable redemption date, as the
case may be; (ii) in the case of Legal Defeasance, the Issuer shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Issuer shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
Events of Default under Section 6.01(f) or (g) are concerned, at any time in the
period ending on the 91st day after the date of deposit; (v) 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 Cadmus or any of its Subsidiaries is a party or by which
Cadmus or any of its Subsidiaries is bound; (vi) the Issuer shall have delivered
to the Trustee an Officers' Certificate stating that the deposit was not made by
the Issuer with the intent of preferring the Holders over any other creditors of
the Issuer or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Issuer or others; (vii) the Issuer shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with; and (viii) the
Issuer shall have delivered to the Trustee an Opinion of Counsel to that effect
that (a) the trust funds will not be subject to any rights of holders of Senior
Debt, including, without limitation, those arising under this Indenture and (b)
assuming no intervening bankruptcy of the Issuer between the date of deposit and
the 91st day following deposit and that no Holder is an insider of the Issuer,
after the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) in the immediately preceding paragraph with respect to a Legal
Defeasance need not be delivered if all Senior Subordinated Securities not
theretofore delivered to the Trustee for cancellation (1) have become due and
payable; or (2) will become due and payable on the maturity date within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Issuer.
SECTION 8.03 Deposited Money and Government Senior Subordinated
Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to
Section 8.04, U.S. Legal Tender and U.S. government obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 8.02 or Section
8.06 in respect of the outstanding Senior Subordinated Securities shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Subordinated Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Issuer acting as Paying
Agent) as the Trustee may determine, to the Holders of all sums due and to
become due thereon in respect of principal and interest, but such money need not
be segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Issuer from time to time upon the
request of the Issuer any U.S. Legal Tender or U.S. government obligations
(including the proceeds thereof) held by it as provided in Section 8.02 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.02(a)), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.04 Repayment to Issuer. Any U.S. Legal Tender deposited
with the Trustee or any Paying Agent, or then held by the Issuer, in trust for
the payment of the principal of or interest on any Senior Subordinated Security
and remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Issuer on its request or (if then
held by the Issuer) shall be discharged from such trust; and the Holder of such
Senior Subordinated Security shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Issuer as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer, cause to be published once, in The New York
Times (national edition) and The Wall Street Journal (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer.
SECTION 8.05 Reinstatement. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. government obligations in
accordance with this Article VIII by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Issuer's and the Guarantors' obligations under this
Indenture and the Senior Subordinated Securities and the Guarantors' obligations
under the Guarantor Guarantees shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
this Article VIII; PROVIDED, HOWEVER, that, if the Issuer or any Guarantor makes
any payment of principal of or interest on any Senior Subordinated Security
following the reinstatement of its obligations, the Issuer or any Guarantor, as
the case may be, shall be subrogated to the rights of the Holders of such Senior
Subordinated Securities to receive such payment from the money held by the
Trustee or Paying Agent.
SECTION 8.06 Satisfaction and Discharge of Indenture. Upon the
request of the Issuer, this Indenture will be discharged and will cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of the Senior Subordinated Securities, as expressly provided for herein
or pursuant hereto), the Issuer and the Guarantors will be discharged from their
obligations under the Senior Subordinated Securities and the Guarantor
Guarantees, respectively, and the Trustee, at the expense of the Issuer, will
execute proper instruments acknowledging satisfaction and discharge of this
Indenture when:
(a) either (i) all the Senior Subordinated Securities theretofore
authenticated and delivered (other than mutilated, destroyed, lost or
stolen Senior Subordinated Securities that have been replaced or paid
and Senior Subordinated Securities that have been subject to defeasance
under this Article VIII) have been delivered to the Trustee for
cancellation or (ii) all Senior Subordinated Securities not theretofore
delivered to the Trustee for cancellation (A) have become due and
payable, (B) will become due and payable at maturity within one year or
(C) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Issuer, and the
Issuer, in the case of (A), (B) or (C) above, has irrevocably deposited
or caused to be deposited with the Trustee funds in trust for such
purpose in an amount sufficient to pay and discharge, without the need
to reinvest any proceeds thereof, the entire Indebtedness on such Senior
Subordinated Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest on the Senior Subordinated
Securities to the date of such deposit (in the case of Senior
Subordinated Securities that have become due and payable) or to the
Stated Maturity or redemption date, as the case may be;
(b) the Issuer has paid or caused to be paid all sums payable
under this Indenture by the Issuer; and
(c) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Issuer and the Guarantors to the Trustee under Section
7.07 and, if money shall have been deposited with the Trustee pursuant to clause
(a)(ii) of this Section 8.06, the obligations of the Trustee under Section 8.06
and Section 2.04 shall survive.
ARTICLE IX
AMENDMENTS
SECTION 9.01 Without Consent of Holders. From time to time, the
Issuer and each Guarantor when authorized by a Board Resolution of their
respective Boards of Directors, and the Trustee, without the consent of the
Holders, may amend this Indenture or the Senior Subordinated Securities or the
Guarantor Guarantees for the following purposes:
(1) to cure any ambiguity, defect or inconsistency, PROVIDED that
any such amendment does not, in the opinion of the Trustee, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect the
rights of any Holder or any holder of the Series A Securities or the
Series B Securities;
(2) to provide for uncertificated Senior Subordinated Securities
in addition to or in place of certificated Senior Subordinated
Securities (PROVIDED that the uncertificated Senior Subordinated
Securities are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Senior
Subordinated Securities are described in Section 163(f)(2)(B) of the
Code);
(3) to comply with Article V;
(4) to release any Guarantor from its Guarantor Guarantee in
accordance with the provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights
or benefits to each of the Holders of Senior Subordinated Securities and
the holders of the Series A Securities and the Series B Securities,
treating, for such purpose, the Senior Subordinated Securities, the
Series A Securities and the Series B Securities as one class, or that
does not adversely affect the legal rights under this Indenture of any
such Holder of Senior Subordinated Securities or any holder of Series A
Securities or Series B Securities, or
(7) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article VII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.01 becomes effective, the
Issuer shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
SECTION 9.02 With Consent of Holders. The Issuer, the Guarantors
and the Trustee may amend this Indenture, the Guarantor Guarantees or the Senior
Subordinated Securities with the written consent of (i) the Holders of at least
66 2/3% in principal amount of the Senior Subordinated Securities, (ii) the
holders of at least 66 2/3% in principal amount of the Series A Securities and
(iii) the holders of at least 66 2/3% in principal amount of the Series B
Securities. However, without the consent of (i) each Holder of a Senior
Subordinated Security, (ii) each holder of the Series A Securities and (iii)
each holder of the Series B Securities, an amendment may not:
(i) reduce the principal amount of Senior Subordinated Securities
whose Holders must consent to an amendment;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Senior Subordinated Securities;
(iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Senior Subordinated Securities, or
change the date on which any Senior Subordinated Securities may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(iv) make any Senior Subordinated Securities payable in money other
than that stated in the Senior Subordinated Securities;
(v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Senior Subordinated Securities on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders
of a majority in principal amount of Senior Subordinated Securities to
waive Defaults or Events of Default;
(vi) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Senior
Subordinated Securities in a manner which adversely affects the Holders;
PROVIDED, HOWEVER, that it is understood that any amendment, the purpose
of which is to permit the Incurrence of additional Indebtedness under
this Indenture shall not be construed as adversely affecting the ranking
of the Senior Subordinated Securities; or
(vii) make any change to the Guarantor Guarantees in any manner that
adversely affects the rights of the Holders.
In addition, without the consent of (i) Holders of not less than
66 2/3 % in aggregate principal amount of Senior Subordinated Securities then
outstanding, (ii) holders of not less than 66 2/3% in principal amount of the
Series A Securities then outstanding and (iii) the holders of at least 66 2/3%
in principal amount of the Series B Securities then outstanding, no such
amendment, supplement or waiver may amend, change or modify in any material
respect the obligation of Cadmus and its Restricted Subsidiaries to make and
consummate a Change of Control Offer in the event of a Change of Control or make
and consummate a Net Proceeds Offer with respect to any Asset Sale that has been
consummated or modify any of the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof
No amendment under this Section 9.02 may make any change that
adversely affects the rights under Article X of any holder of Senior Debt or
under Article XII of any holder of Guarantor Senior Debt then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or any group or
representative thereof authorized to give a consent), as the case may be,
consent to such change.
After an amendment under this Section 9.02 becomes effective, the
Issuer shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Senior Subordinated Securities shall comply with the
TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Senior Subordinated
Security shall bind the Holder and every subsequent Holder of that Senior
Subordinated Security or portion of the Senior Subordinated Security that
evidences the same debt as the consenting Holder's Senior Subordinated Security,
even if notation of the consent or waiver is not made on the Senior Subordinated
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Senior Subordinated Security or portion of the
Senior Subordinated Security if the Trustee receives written notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Senior Subordinated
Securityholder. Except if otherwise specified in such amendment or waiver, an
amendment or waiver becomes effective once the requisite number of consents are
received by the Issuer or the Trustee.
The Issuer may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Senior Subordinated Securities
entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date
is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities. If an amendment changes the terms of a Senior Subordinated Security,
the Trustee may require the Holder of the Senior Subordinated Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Senior Subordinated Security regarding the changed terms and return it to the
Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in
exchange for the Senior Subordinated Security shall issue and the Trustee shall
authenticate a new Senior Subordinated Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Senior Subordinated
Security shall not affect the validity of such amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate of the Issuer and an
Opinion of Counsel, each stating that such amendment is authorized or permitted
by this Indenture and that such amendment is the legal, valid and binding
obligation of the Issuer and the Guarantors enforceable against them in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof (including Section 9.03).
SECTION 9.07 Payment for Consent. Neither the Issuer nor any
Affiliate of the Issuer shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture, any Guarantor Guarantee or the Senior
Subordinated Securities unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
SUBORDINATION OF SENIOR SUBORDINATED SECURITIES
SECTION 10.01 Senior Subordinated Securities Subordinated to
Senior Debt. The Issuer covenants and agrees, and the Trustee and each Holder of
the Senior Subordinated Securities by their acceptance thereof likewise covenant
and agree, (i) that all Senior Subordinated Securities shall be issued subject
to the provisions of this Article X; and each Person holding any Senior
Subordinated Security, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture by the Issuer shall, to the extent and
in the manner set forth in this Article X, be subordinated and junior in right
of payment to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Debt, whether outstanding on the Issue Date or thereafter
Incurred, including, without limitation, Cadmus' Obligations under or in respect
of the Credit Agreement, and (ii) that the subordination is for the benefit of,
and shall be enforceable directly by, the holders of Senior Debt, and that each
holder of Senior Debt whether now outstanding or hereafter created, Incurred,
assumed or guaranteed shall be deemed to have acquired Senior Debt in reliance
upon the covenants and provisions contained in this Indenture and the Senior
Subordinated Securities.
SECTION 10.02 No Payment on Securities in Certain Circumstances.
Unless Section 10.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Senior Debt, no payment of any kind or character shall be
made by or on behalf of the Issuer or any other Person on its behalf with
respect to any Obligations on the Senior Subordinated Securities or to acquire
any of the Senior Subordinated Securities for cash or property or otherwise
(except that holders of the Senior Subordinated Securities may receive payments
from a trust described under Article VIII so long as, on the date or dates the
respective amounts were paid into the trust, such payments were made with
respect to the Senior Subordinated Securities in accordance with the provisions
of Article VIII and without violating the provisions of Article X or Article XII
of this Indenture (a "Defeasance Trust Payment")).
In addition, unless Section 10.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Senior Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
written notice of the event of default to the Trustee (a "Payment Blockage
Notice"), then, unless and until all events of default have been cured or waived
or have ceased to exist or the Trustee receives notice from the Representative
for the respective issue of Designated Senior Debt terminating the Payment
Blockage Period, during the 180 days after the receipt by the Trustee of such
Payment Blockage Notice (the "Payment Blockage Period"), neither the Issuer nor
any other Person on its behalf shall (x) make any payment of any kind or
character with respect to any Obligations on the Senior Subordinated Securities
or (y) acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that Holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Payment Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Payment Blockage Notice and only one such Payment Blockage Period
may be commenced within any 360 consecutive days. No event of default which
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be made,
the basis for commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 10.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of the Issuer of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Senior Subordinated
Securities at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 10.02 and before all Obligations in respect
of Designated Senior Debt of Cadmus are paid in full in cash or Cash
Equivalents, such payment or distribution shall be received and held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Debt of Cadmus (PRO RATA to such holders on the basis of the
respective amounts of Designated Senior Debt held by such holders) or their
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Designated Senior Debt remaining unpaid until all such Designated Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Designated Senior Debt.
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of the Issuer of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of the Issuer or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to the Issuer or its property, whether voluntary or involuntary, all
Obligations due or to become due upon all Senior Debt (including interest after
the commencement of any such proceeding at the rate specified in the applicable
Senior Debt whether or not such interest is an allowed claim in such proceeding)
shall first be paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, before any
payment or distribution of any kind or character is made on account of any
Obligations on the Senior Subordinated Securities, or for the acquisition of any
of the Senior Subordinated Securities for cash or property or otherwise (except
that Holders of the Senior Subordinated Securities may receive Defeasance Trust
Payments). Before any payment may be made by, or on behalf of, the Issuer of any
Obligations on the Senior Subordinated Securities upon any such dissolution or
winding-up or total liquidation or reorganization, any payment or distribution
of assets or securities of the Issuer of any kind or character, whether in cash,
property or securities (excluding any Defeasance Trust Payment), to which the
Holders of the Senior Subordinated Securities or the Trustee on their behalf
would be entitled, but for the subordination provisions of this Indenture, shall
be made by the Issuer or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Senior Debt of Cadmus (PRO RATA to such holders on the basis
of the respective amounts of Senior Debt held by such holders) or their
Representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, to the extent necessary to pay
all such Senior Debt in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Issuer of any kind or character, whether in cash, property
or securities (excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Senior Subordinated Securities at a time when such
payment or distribution is prohibited by Section 10.03(a) and before all
Obligations in respect of Senior Debt of Cadmus are paid in full in cash or Cash
Equivalents, such payment or distribution shall be received and held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt of Cadmus (PRO RATA to such holders on the basis of the respective
amounts of Senior Debt held by such holders) or their Representatives, or to the
trustee or trustees or agent or agents under any indenture pursuant to which any
of such Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of such Senior Debt remaining unpaid
until all such Senior Debt has been paid in full in cash or Cash Equivalents
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(c) To the extent any payment of Senior Debt (whether by or on
behalf of the Issuer, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
has not occurred.
(d) The consolidation of the Issuer with, or the merger of the
Issuer with or into, another Person or the liquidation or dissolution of the
Issuer following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided in Article V shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 10.03 if such other Person
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article V.
SECTION 10.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Senior Debt of Cadmus, the Holders of the Senior
Subordinated Securities shall be subrogated to the rights of the holders of such
Senior Debt to receive payments or distributions of cash, property or securities
of the Issuer or Cadmus made on such Senior Debt until the principal of and
interest on the Senior Subordinated Securities shall be paid in full in cash or
Cash Equivalents; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of Cadmus of any cash, property
or securities to which the Holders of the Senior Subordinated Securities or the
Trustee on their behalf would be entitled except for the provisions of this
Article X, and no payment over pursuant to the provisions of this Article X to
the holders of Senior Debt of Cadmus by Holders of the Senior Subordinated
Securities or the Trustee on their behalf shall, as between Cadmus, its
creditors other than holders of Senior Debt of Cadmus, and the Holders of the
Senior Subordinated Securities, be deemed to be a payment by Cadmus to or on
account of the Senior Debt. It is understood that the provisions of this Article
X are and are intended solely for the purpose of defining the relative rights of
the Holders of the Senior Subordinated Securities, on the one hand, and the
holders of the Senior Debt of Cadmus, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article X shall have been applied, pursuant to the provisions
of this Article X, to the payment of all amounts payable under Senior Debt, then
and in such case, the Holders of the Senior Subordinated Securities shall be
entitled to receive from the holders of such Senior Debt any payments or
distributions received by such holders of Senior Debt in excess of the amount
required to make payment in full in cash of such Senior Debt.
SECTION 10.05 Obligations of the Issuer Unconditional. Nothing
contained in this Article X or elsewhere in this Indenture or in the Senior
Subordinated Securities is intended to or shall impair, as among the Issuer and
the Holders of the Senior Subordinated Securities, the obligation of the Issuer,
which is absolute and unconditional, to pay to the Holders of the Senior
Subordinated Securities the principal of and interest on the Senior Subordinated
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Senior Subordinated Securities and creditors of the Issuer other
than the holders of the Senior Debt of the Issuer, nor shall anything herein or
therein prevent the Holder of any Senior Subordinated Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article X of the holders of the Senior Debt of the Issuer in respect of cash,
property or securities of the Issuer received upon the exercise of any such
remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article X shall restrict the right of the Trustee or the
Holders of Senior Subordinated Securities to take any action to declare the
Senior Subordinated Securities to be due and payable prior to their stated
maturity pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
PROVIDED, HOWEVER, that all Senior Debt of the Issuer then due and payable shall
first be paid in full in cash or Cash Equivalents before the Holders of the
Senior Subordinated Securities or the Trustee are entitled to receive any direct
or indirect payment from, or on behalf of, the Issuer on account of any
Obligations on the Senior Subordinated Securities.
SECTION 10.06 Notice to Trustee. The Issuer shall give prompt
written notice to the Trustee of any fact known to the Issuer which would
prohibit the making of any payment to or by the Trustee in respect of the Senior
Subordinated Securities pursuant to the provisions of this Article X (although
the failure to give any such notice shall not affect the subordination
provisions set forth in this Article X). The Trustee shall not be charged with
knowledge of the existence of any event of default with respect to any Senior
Debt of the Issuer or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
Officer of the Issuer, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article VII, be entitled to assume that no such facts exist;
PROVIDED, HOWEVER, that if the Trustee shall not have received the notice
provided for in this Section 10.06 at least two Business Days prior to the date
upon which by the terms of this Indenture any moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of or
interest on any Senior Subordinated Security), then, regardless of anything
herein to the contrary, the Trustee shall have full power and authority to
receive any moneys from the Issuer and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date (although the
receipt of such moneys by any Holder of Senior Subordinated Securities shall
otherwise be subject to the provisions of this Article X). Nothing contained in
this Section 10.06 shall limit the right of the holders of Senior Debt of the
Issuer to recover payments from Holders as contemplated by Section 10.02 or
10.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Debt of the Issuer (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt of the Issuer to participate in any payment or distribution pursuant
to this Article X, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior Debt of
the Issuer 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 X, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 10.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article X, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt of the Issuer and other
indebtedness of the Issuer, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article X.
SECTION 10.08 Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article X
with respect to any Senior Debt of Cadmus which may at any time be held by it in
its individual or any other capacity to the same extent as any other holder of
Senior Debt of Cadmus, and nothing in this Indenture shall deprive the Trustee
or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt of Cadmus, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article X, and no implied covenants or
obligations with respect to the holders of Senior Debt of Cadmus shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Debt of Cadmus (except as provided
in Section 10.02 and Section 10.03(b), subject to Section 10.06). The Trustee
shall not be liable to any such holders if the Trustee shall in good faith
mistakenly pay over or distribute to Holders of Senior Subordinated Securities
or to Cadmus or to any other Person cash, property or securities to which any
holders of Senior Debt of Cadmus shall be entitled by virtue of this Article X
or otherwise.
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Debt. No right of any present or
future holders of any Senior Debt of the Issuer to enforce subordination as
provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Issuer with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with. The provisions of this Article X
are intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt of the Issuer.
SECTION 10.10. Holders Authorize Trustee To Effectuate
Subordination of Senior Subordinated Securities. Each Holder of Senior
Subordinated Securities by its acceptance of such Senior Subordinated Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article X, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Issuer (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Issuer, the filing of a claim for the unpaid balance of its or his Senior
Subordinated Securities in the form required in those proceedings. If the
Trustee does not file a proper claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Debt or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Senior Subordinated
Securities. Nothing herein contained shall be deemed to authorize the Trustee or
the holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Securities or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article X shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 10.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article X shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 10.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 10.09, the holders of Senior Debt of
Cadmus may, at any time and from time to time, without the consent of or notice
to the Trustee or the Holders of the Senior Subordinated Securities, without
incurring responsibility to the Holders of the Senior Subordinated Securities
and without impairing or releasing the subordination provided in this Article X
or the obligations hereunder of the Holders of the Senior Subordinated
Securities to the holders of Senior Debt of Cadmus, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Debt or any instrument evidencing
the same or any agreement under which such Senior Debt is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Debt; (c) release any
Person liable in any manner for the collection of such Senior Debt; and (d)
exercise or refrain from exercising any rights against the Issuer and any other
Person.
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
X.
SECTION 10.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article X (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XI
GUARANTOR GUARANTEES
SECTION 11.01 Guarantor Guarantees. Each Guarantor hereby jointly
and severally unconditionally and irrevocably guarantees as a primary obligor
and not merely as a surety, to each Holder and to the Trustee and its successors
and assigns (a) the full and punctual payment of principal of and interest
(including interest on overdue principal and interest on overdue interest, to
the extent lawful) on the Senior Subordinated Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Issuer under this Indenture (including obligations to the
Trustee) and the Senior Subordinated Securities and (b) the full and punctual
performance of all other obligations of the Issuer whether for expenses,
indemnification or otherwise under this Indenture and the Senior Subordinated
Securities (all of the foregoing being collectively called the "Guaranteed
Obligations"). Each Guarantor further agrees that the Guaranteed Obligations may
be extended or renewed, in whole or in part, without notice or further assent
from each such Guarantor, and that each such Guarantor shall remain bound under
this Article XI notwithstanding any extension or renewal of any Guaranteed
Obligation.
Each Guarantor waives presentation to, demand of, payment from
and protest to the Issuer of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Senior Subordinated Securities or the Guaranteed Obligations. The
obligations of each Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Issuer or any other Person under this Indenture, the
Senior Subordinated Securities or any other agreement or otherwise; (b) any
extension or renewal of any Guaranteed Obligations; (c) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Indenture,
the Senior Subordinated Securities or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Guaranteed Obligations or
any of them; (e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; (f) any change
in the ownership of such Guarantor; (g) the validity, regularity or
enforceability of the Senior Subordinated Securities or this Indenture.
The Guarantor Guarantee of each Guarantor is, to the extent and
in the manner set forth in Article XII, subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Debt and is made
subject to such provisions of this Indenture.
Each Guarantor further agrees that its Guarantor Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Senior Subordinated Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Guaranteed Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Guarantor Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Issuer or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in U.S. Legal Tender, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid principal amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest, premium and liquidated damages,
if any, on such Guaranteed Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Guaranteed Obligations of the Issuer to the
Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations and all Guarantor Senior Debt as provided in Article XII. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Guarantor Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
Each Guarantor 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 Section.
SECTION 11.02 Execution and Delivery of Guarantor Guarantee. (a)
To evidence the Guarantor Guarantees of each Guarantor as set forth in this
Article XI, each Guarantor hereby agrees that a notation of such Guarantor
Guarantee shall be placed on each Senior Subordinated Security authenticated and
delivered by the Trustee.
(b) This Indenture shall be executed on behalf of each Guarantor,
and an Officer of each Guarantor shall sign the notation of the Guarantor
Guarantee on each Senior Subordinated Security, by manual or facsimile
signature. If an Officer whose signature is on this Indenture or the notation of
Guarantor Guarantee on any Senior Subordinated Security no longer holds that
office at the time the Trustee authenticates such Senior Subordinated Security
on which the Guarantor Guarantee is endorsed, the Guarantor Guarantee shall be
valid nevertheless. Each Guarantor hereby agrees that the Guarantor Guarantee
set forth in Section 11.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Subordinated Security a
notation of the Guarantor Guarantee.
(c) The delivery of any Senior Subordinated Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Guarantor Guarantee set forth in this Indenture on behalf of
each Guarantor.
SECTION 11.03 Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be guaranteed (after giving effect to (i) all its
Obligations under the Credit Agreement in the case of Cadmus and (ii) all its
guarantees of Indebtedness under the Credit Agreement in the case of the other
Guarantors) without rendering this Indenture, as it relates to any Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
SECTION 11.04 Successors and Assigns. This Article XI shall be
binding upon each Guarantor and its successors and assigns and shall inure 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
Senior Subordinated Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.05 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 XI 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 XI
at law, in equity, by statute or otherwise.
SECTION 11.06 Release of Guarantors. The Guarantor Guarantee
furnished by a Guarantor shall be automatically and unconditionally released and
discharged (at which time such Person shall cease to be a Guarantor), without
any further action required on the part of the Trustee or any Holder, upon the
occurrence of (i) the release and discharge of the guarantee which resulted in
the creation of such Guarantor Guarantee (as well as the release or discharge of
any subsequently created guarantees which would have resulted in the creation of
such Guarantor Guarantee if same did not already exist), in each case except a
discharge or release by or as a result of payment under such Guarantor
Guarantee; (ii) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of Cadmus of all of Cadmus' and its
other Restricted Subsidiaries' Capital Stock in such Subsidiary; PROVIDED that
such sale or disposition of such Capital Stock or assets is otherwise in
compliance with the terms of this Indenture; and (iii) the sale or other
disposition of shares of Capital Stock of such Restricted Subsidiary to a Person
other than Cadmus or a Restricted Subsidiary of Cadmus such that such Subsidiary
ceases to constitute a Restricted Subsidiary of Cadmus, PROVIDED such
disposition is otherwise in accordance with the provisions of this Indenture.
SECTION 11.07 Modification. No modification, amendment or waiver
of any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
SUBORDINATION OF SUBSIDIARY GUARANTEES
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt. Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Senior Subordinated Securities by their acceptance thereof
likewise covenant and agree, (i) that all Subsidiary Guarantees shall be issued
subject to the provisions of this Article XII; and each Person holding any
Subsidiary Guarantee, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
and interest (including, without limitation, interest on overdue payments of
principal or interest) on or other amounts payable in respect of the Senior
Subordinated Securities or this Indenture pursuant to the Subsidiary Guarantee
made by or on behalf of such Guarantor shall, to the extent and in the manner
set forth in this Article XII, be subordinated and junior in right of payment to
the prior payment in full in cash or Cash Equivalents of all Obligations on
Guarantor Senior Debt of such Guarantor, whether outstanding on the Issue Date
or thereafter Incurred, including, without limitation, such Guarantor's
Obligations under the Credit Agreement, and (ii) that the subordination is for
the benefit of, and shall be enforceable directly by, the holders of Guarantor
Senior Debt, and that each holder of Guarantor Senior Debt whether now
outstanding or hereafter created, Incurred, assumed or guaranteed shall be
deemed to have acquired Guarantor Senior Debt in reliance upon the covenants and
provisions contained in this Indenture, the Senior Subordinated Securities, and
the Subsidiary Guarantees.
SECTION 12.02 No Payment on Securities in Certain Circumstances.
Unless Section 12.03 shall be applicable, if any default occurs and is
continuing in the payment when due, whether at maturity, upon any redemption, by
acceleration or otherwise, of any principal of, interest on, unpaid drawings for
letters of credit issued in respect of, or regularly accruing fees with respect
to, any Designated Guarantor Senior Debt, no payment of any kind or character
shall be made by or on behalf of any Guarantor or any other Person on its behalf
with respect to any Obligations on the Subsidiary Guarantees of any Guarantor or
to acquire any of the Subsidiary Guarantees of any Guarantor for cash or
property or otherwise (except that holders of the Subsidiary Guarantees may
receive Defeasance Trust Payments from a trust described under Article VIII so
long as, on the date or dates the respective amounts were paid into the trust,
such payments were made with respect to the Subsidiary Guarantees in accordance
with the provisions of Article VIII and without violating the provisions of
Article X or Article XII of this Indenture).
In addition, unless Section 12.03 shall be applicable, if any
other event of default occurs and is continuing with respect to any Designated
Guarantor Senior Debt, as such event of default is defined in the instrument
creating or evidencing such Designated Guarantor Senior Debt, permitting the
holders of such Designated Guarantor Senior Debt then outstanding to accelerate
the maturity thereof and if the Representative for the respective issue of
Designated Guarantor Senior Debt gives written notice of the event of default to
the Trustee (a "Guarantor Default Notice"), then, unless and until all events of
default have been cured or waived or have ceased to exist or the Trustee
receives notice from the Representative for the respective issue of Designated
Guarantor Senior Debt terminating the Guarantor Blockage Period, during the 180
days after the receipt by the Trustee of such Guarantor Default Notice (the
"Guarantor Blockage Period"), neither any Guarantor nor any other Person on
either of its behalf shall (x) make any payment of any kind or character with
respect to any Obligations on the Subsidiary Guarantees of such Guarantor or (y)
acquire any of the Senior Subordinated Securities for cash or property or
otherwise (except that holders of the Senior Subordinated Securities may receive
Defeasance Trust Payments).
Notwithstanding anything herein to the contrary, in no event will
a Guarantor Blockage Period extend beyond 180 days after the receipt by the
Trustee of the Guarantor Default Notice and only one such Guarantor Blockage
Period may be commenced within any 360 consecutive days. No event of default
which existed or was continuing on the date of the commencement of any Guarantor
Blockage Period with respect to the Designated Guarantor Senior Debt shall be,
or be made, the basis for commencement of a second Guarantor Blockage Period by
the Representative of such Designated Guarantor Senior Debt whether or not
within a period of 360 consecutive days, unless such event of default shall have
been cured or waived for a period of not less than 90 consecutive days (it being
acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Guarantor Blockage Period that, in either case, would give rise to an event of
default pursuant to any provisions under which an event of default previously
existed or was continuing shall constitute a new event of default for this
purpose).
In the event that, notwithstanding the foregoing provisions of
this Section 12.02 prohibiting such payment or distribution, any payment or
distribution of assets or securities of any Guarantor of any kind or character,
whether in cash, property or securities (excluding any Defeasance Trust
Payment), shall be received by the Trustee or any Holder of Subsidiary
Guarantees at a time when such payment or distribution is prohibited by the
first two paragraphs of this Section 12.02 and before all Obligations in respect
of Designated Guarantor Senior Debt of such Guarantor are paid in full in cash
or Cash Equivalents, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Designated Guarantor Senior Debt (PRO RATA to such holders on the basis of the
respective amounts of Designated Guarantor Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Designated Guarantor Senior Debt may
have been issued, as their respective interests may appear, for application to
the payment of such Designated Guarantor Senior Debt remaining unpaid until all
such Designated Guarantor Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any prior or concurrent payment, distribution
or provision therefor to or for the holders of such Designated Guarantor Senior
Debt.
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets of any Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors or marshaling of assets of any Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to such Guarantor or its property, whether voluntary or involuntary,
all Obligations due or to become due upon all Guarantor Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Guarantor Senior Debt whether or not such interest is an allowed
claim in such proceeding) shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt, before any payment or distribution of any kind
or character is made on account of any Obligations on the Subsidiary Guarantees,
or for the acquisition of any of the Senior Subordinated Securities for cash or
property or otherwise (except that Holders of the Senior Subordinated Securities
may receive Defeasance Trust Payments). Before any payment may be made by, or on
behalf of, any Guarantor of any Obligations on the Subsidiary Guarantees upon
any such dissolution or winding-up or total liquidation or reorganization, any
payment or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities (excluding any Defeasance
Trust Payment), to which the Holders of the Subsidiary Guarantees or the Trustee
on their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (PRO RATA to such holders on the basis of the respective amounts of
Guarantor Senior Debt held by such holders) or their Representatives or to the
trustee or trustees or agent or agents under any agreement or indenture pursuant
to which any of such Guarantor Senior Debt may have been issued, as their
respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Debt in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any Defeasance Trust Payment), shall be
received by the Trustee or any Holder of Subsidiary Guarantees at a time when
such payment or distribution is prohibited by Section 12.03(a) and before all
Obligations in respect of Guarantor Senior Debt of such Guarantor are paid in
full in cash or Cash Equivalents, such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Guarantor Senior Debt of such Guarantor (PRO RATA to such holders
on the basis of the respective amounts of Senior Debt held by such holders) or
their representatives, or to the trustee or trustees or agent or agents under
any indenture pursuant to which any of such Guarantor Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Guarantor Senior Debt remaining unpaid until all such Guarantor Senior
Debt has been paid in full in cash or Cash Equivalents after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(c) To the extent any payment of Guarantor Senior Debt (whether
by or on behalf of any Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Guarantor Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(d) The consolidation of any Guarantor with, or the merger of
such Guarantor with or into, another Person or the liquidation or dissolution of
such Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another Person upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V.
SECTION 12.04 Subrogation. Upon the payment in full in cash or
Cash Equivalents of all Guarantor Senior Debt of any Guarantor, the Holders of
the Subsidiary Guarantees of such Guarantor shall be subrogated to the rights of
the holders of such Guarantor Senior Debt to receive payments or distributions
of cash, property or securities of such Guarantor made on such Guarantor Senior
Debt until the principal of and interest on the Senior Subordinated Securities
shall be paid in full in cash or Cash Equivalents; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Guarantor Senior
Debt of such Guarantor of any cash, property or securities to which the Holders
of the Senior Subordinated Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article XII, and no payment over
pursuant to the provisions of this Article XII to the holders of Guarantor
Senior Debt of such Guarantor by Holders of the Senior Subordinated Securities
or the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of Guarantor Senior Debt of such Guarantor, and the Holders
of the Senior Subordinated Securities, be deemed to be a payment by such
Guarantor to or on account of the Guarantor Senior Debt of such Guarantor. It is
understood that the provisions of this Article XII are and are intended solely
for the purpose of defining the relative rights of the Holders of the Senior
Subordinated Securities, on the one hand, and the holders of the Guarantor
Senior Debt of such Guarantor, on the other hand.
If any payment or distribution to which the Holders of the Senior
Subordinated Securities would otherwise have been entitled but for the
provisions of this Article XII shall have been applied, pursuant to the
provisions of this Article XII, to the payment of all amounts payable under
Guarantor Senior Debt, then and in such case, the Holders of the Senior
Subordinated Securities shall be entitled to receive from the holders of such
Guarantor Senior Debt any payments or distributions received by such holders of
Guarantor Senior Debt in excess of the amount required to make payment in full
in cash of such Guarantor Senior Debt.
SECTION 12.05 Obligations of the Guarantors Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture, the Senior
Subordinated Securities or in the Subsidiary Guarantees is intended to or shall
impair, as among the Guarantors and the Holders of the Senior Subordinated
Securities, the obligation of the Guarantors, which is absolute and
unconditional, to pay to the Holders of the Subsidiary Guarantees the principal
of and interest on the Subsidiary Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Subsidiary Guarantees and
creditors of the Guarantors other than the holders of the Guarantor Senior Debt
of the Guarantors, nor shall anything herein or therein prevent the Holder of
any Senior Subordinated Security or the Trustee on their behalf from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of the Guarantor Senior Debt of the Guarantors in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article XII shall restrict the right of the Trustee or the
Holders of Subsidiary Guarantees to take any action to declare the Subsidiary
Guarantees to be due and payable prior to their stated maturity pursuant to
Section 6.02 or to pursue any rights or remedies hereunder; PROVIDED, HOWEVER,
that all Guarantor Senior Debt of the Guarantors then due and payable shall
first be paid in full in cash or Cash Equivalents before the Holders of the
Subsidiary Guarantees or the Trustee are entitled to receive any direct or
indirect payment from, or on behalf of, the Guarantors on account of any
Obligations on the Subsidiary Guarantees.
SECTION 12.06 Notice to Trustee. Each 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 in respect of the Senior
Subordinated Securities and the Subsidiary Guarantees pursuant to the provisions
of this Article XII (although the failure to give any such notice shall not
affect the subordination provisions set forth in this Article XII). The Trustee
shall not be charged with knowledge of the existence of any event of default
with respect to any Guarantor Senior Debt of any Guarantor or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing at its Corporate Trust
Office to that effect signed by an Officer of any Guarantor, or by a holder of
Guarantor Senior Debt or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article VII, be entitled
to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 12.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Subsidiary Guarantee), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Guarantors and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date
(although the receipt of such moneys by any Holder of Senior Subordinated
Securities shall otherwise be subject to the provisions of this Article XII).
Nothing contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Debt of the Guarantors to recover payments from Holders as
contemplated by Section 12.02 or 12.03. The Trustee shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself or
itself to be a holder of any Guarantor Senior Debt of any Guarantor (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Guarantor Senior Debt or a
trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt of any Guarantor to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Debt of any Guarantor 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
XII, 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 12.07 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article XII, the Trustee and the Holders of the Senior
Subordinated Securities shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy or liquidating trustee,
delivered to the Trustee or to the Holders of the Senior Subordinated Securities
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Guarantor Senior Debt of the Guarantors and
other indebtedness of the Guarantors, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII.
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt. The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Debt of the Guarantors
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 Debt of the Guarantors,
and nothing in this Indenture shall deprive the Trustee or any Paying Agent of
any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt of the
Guarantors, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XII, and
no implied covenants or obligations with respect to the holders of Guarantor
Senior Debt of the Guarantors 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 Debt of the Guarantors (except as provided in
Section 12.02 and Section 12.03(b), subject to Section 12.06). The Trustee shall
not be liable to any such holders if the Trustee shall in good faith mistakenly
pay over or distribute to Holders of Senior Subordinated Securities or to the
Guarantors or to any other Person cash, property or securities to which any
holders of Guarantor Senior Debt of any Guarantor shall be entitled by virtue of
this Article XII or otherwise.
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor Senior Debt. No right of any
present or future holders of any Guarantor Senior Debt of any Guarantor to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any such Guarantor with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article XII are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Guarantor Senior Debt of
any such Guarantor.
SECTION 12.10. Holders Authorize Trustee To Effectuate
Subordination of Subsidiary Guarantees. Each Holder of Senior Subordinated
Securities and Subsidiary Guarantees by its acceptance of them authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its or his Senior Subordinated Securities in the form required in
those proceedings. If the Trustee does not file a proper claim or proof of debt
in the form required in any proceeding referred to in Section 6.09 prior to 30
days before the expiration of the time to file such claim or claims, then any of
the holders of the Guarantor Senior Debt or their Representative is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Senior Subordinated Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Subordinated Securities, the Subsidiary Guarantees or the
rights of any Holder thereof, or to authorize the Trustee or the holders of
Guarantor Senior Debt or their Representative to vote in respect of the claim of
any Holder in any such proceeding.
SECTION 12.11. This Article Not To Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the Senior
Subordinated Securities by reason of any provision of this Article XII shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article XII shall apply to amounts due to the Trustee, in its capacity as
such, pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Subordination Provisions. Without in
any way limiting the generality of Section 12.09, the holders of Guarantor
Senior Debt of any Guarantor may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Senior Subordinated
Securities, without incurring responsibility to the Holders of the Senior
Subordinated Securities and without impairing or releasing the subordination
provided in this Article XII or the obligations hereunder of the Holders of the
Senior Subordinated Securities to the holders of Guarantor Senior Debt of any
Guarantor, do any one or more of the following: (a) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, such
Guarantor Senior Debt or any instrument evidencing the same or any agreement
under which such Guarantor Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Guarantor Senior Debt; (c) release any Person liable in
any manner for the collection of such Guarantor Senior Debt; and (d) exercise or
refrain from exercising any rights against any Guarantor and any other Person.
SECTION 12.14. Subordination Provisions Not Applicable to Money
Held in Trust for Holders. All money and U.S. government obligations deposited
in trust with the Trustee pursuant to and in accordance with Article VIII shall
be for the sole benefit of the Holders and shall not be subject to this Article
XII.
SECTION 12.15 Amendments. As long as the Credit Agreement is
outstanding or any amounts are outstanding thereunder, the provisions of this
Article XII (and the definitions used herein) shall not be amended or modified
without the written consent of the Representative under the Credit Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act 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 notice or communication shall be in
writing and delivered in person, mailed by first-class mail, transmitted by
confirmed telecopy or delivered by overnight courier, addressed as follows:
if to the Issuer or any Guarantor:
Cadmus Communications Corporation
6620 West Broad Street
Richmond, VA 23230
Telephone: (804) 287-5690
Facsimile: (804) 287-5683
Attention: Bruce V. Thomas, Chief Financial Officer
with a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219-4074
Telephone: (804) 788-8464
Facsimile: (804) 788-8212
Attention: T. Justin Moore, III, Esq.
if to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Telephone: (302) 651-8681
Facsimile: (302) 651-8882
Attention: Corporate Trust Administration
The Issuer or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications. Any
notice or communication to the Issuer or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; five
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a change of address shall not be deemed to have been given
until actually received by the addressee); when receipt acknowledged, if
telecopied; and the next Business Day after timely delivered to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication mailed to a Holder, including any
notice delivered in connection with Sections 310(b), 313(c), 314(a) and 315(b)
of the TIA shall be mailed to such Holder at such Holder's address as it appears
on the Security Register and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture, the Subsidiary Guarantees or the
Senior Subordinated Securities. The Issuer, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer or a Guarantor to the Trustee to
take or refrain from taking any action under this Indenture after the Issue
Date, at the request of the Trustee, the Issuer or such Guarantor, as the case
may be, shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
To the extent applicable, the Issuer and the Guarantors shall
comply with the provisions of TIA ss. 314(c)(3).
SECTION 13.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06 When Senior Subordinated Securities Disregarded. In
determining whether the Holders of the required principal amount of Senior
Subordinated Securities have concurred in any direction, waiver or consent,
Senior Subordinated Securities owned by the Issuer, the Guarantors or any of
their Affiliates shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Senior Subordinated
Securities which the Trustee actually knows are so owned shall be so
disregarded.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of Delaware or the State of New York. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.09 GOVERNING LAW. THIS INDENTURE, THE GUARANTOR
GUARANTEES, AND THE SENIOR SUBORDINATED SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10 Submission to Jurisdiction. The Issuer, each
Guarantor and each Holder of Senior Subordinated Securities, by its acceptance
thereof, consents to the jurisdiction of, and elects as the sole judicial forum
for the adjudication of any matters arising under or in connection with this
Indenture or the Senior Subordinated Securities, the courts of the County of New
York, State of New York, or of the United States of America for the Southern
District of New York.
SECTION 13.11 No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Issuer or any
Guarantor shall not have any liability for any obligations of the Issuer or any
Guarantor under the Senior Subordinated Securities, the Subsidiary Guarantees or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Senior Subordinated Security, each
Holder waives and releases all such liability. The waiver and release shall be
part of the consideration for the issue of the Senior Subordinated Securities.
SECTION 13.12 Successors. All agreements of the Issuer and each
Guarantor in this Indenture, the Senior Subordinated Securities and the
Guarantor Guarantees, as the case may be, shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.13 Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
One signed copy is enough to prove this Indenture.
SECTION 13.14 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.15 Severability. In case any provision of this
Indenture, in the Senior Subordinated Securities or in a Guarantor Guarantee
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
MACK PRINTING COMPANY
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
WILMINGTON TRUST COMPANY,
as Trustee
By:
---------------------------------------
Name:
Title:
GUARANTORS:
CADMUS COMMUNICATIONS CORPORATION
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
CADMUS JOURNAL SERVICES, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
WASHBURN GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
AMERICAN GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
EXPERT GRAPHICS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
CADMUS DIRECT MARKETING, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
THREE SCORE, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
PORT CITY PRESS, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
MACK PRINTING GROUP, INC.
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
SCIENCE CRAFTSMAN INCORPORATED
By:
---------------------------------------
Name: David E. Bosher
Title: Vice President and Treasurer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
SECTION 1.01 Definitions...............................................1
SECTION 1.02 Other Definitions........................................28
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........28
SECTION 1.04 Rules of Construction....................................29
ARTICLE II THE SENIOR SUBORDINATED SECURITIES..............................................29
SECTION 2.01 Form and Dating; Issuance................................29
SECTION 2.02 Execution and Authentication.............................30
SECTION 2.03 Registrar and Paying Agent...............................31
SECTION 2.04 Paying Agent To Hold Money in Trust......................32
SECTION 2.05 Senior Subordinated Securityholder Lists.................32
SECTION 2.06 Registration of Transfer and Exchange....................32
SECTION 2.07 Replacement Senior Subordinated Securities...............33
SECTION 2.08 Outstanding Senior Subordinated Securities...............34
SECTION 2.09 Temporary Senior Subordinated Securities.................34
SECTION 2.10 Cancellation.............................................34
SECTION 2.11 Defaulted Interest.......................................35
SECTION 2.12 CUSIP Numbers............................................35
SECTION 2.13 Book-Entry Provisions for Global Senior Subordinated
Securities...............................................35
SECTION 2.14 Special Transfer Provisions..............................36
SECTION 2.15 Special Transfer Restrictions on Senior Subordinated
Notes....................................................37
ARTICLE III REDEMPTION.....................................................................37
SECTION 3.01 Notices to Trustee.......................................37
SECTION 3.02 Selection................................................37
SECTION 3.03 Notice...................................................37
SECTION 3.04 Effect of Notice of Redemption...........................39
SECTION 3.05 Deposit of Redemption Price..............................39
SECTION 3.06 Senior Subordinated Securities Redeemed in Part..........39
SECTION 3.07 Optional Redemption......................................39
SECTION 3.08 Mandatory Redemption.....................................39
SECTION 3.09 Senior Subordinated Securities Acquired by the
Issuer...................................................40
ARTICLE IV COVENANTS.......................................................................40
SECTION 4.01 Payment of Senior Subordinated Securities................40
SECTION 4.02 Reports..................................................41
SECTION 4.03 Incurrence of Indebtedness...............................41
SECTION 4.04 Restricted Payments......................................41
SECTION 4.05 Dividend and Other Payment Restrictions Affecting
Subsidiaries.............................................43
SECTION 4.06 Asset Sales..............................................44
SECTION 4.07 Maximum Total Leverage Ratio.............................47
SECTION 4.08 Transactions with Affiliates.............................47
SECTION 4.09 Change of Control........................................48
SECTION 4.10 Compliance Certificate...................................51
SECTION 4.11 Maintenance of Properties and Insurance .................51
SECTION 4.12 Limitation on Liens......................................52
SECTION 4.13 Additional Subsidiary Guarantees.........................52
SECTION 4.14 No Layering..............................................52
SECTION 4.15 Capital Expenditures.....................................53
SECTION 4.16 Conduct of Business......................................53
SECTION 4.17 Environmental Matters....................................53
SECTION 4.18 Environmental Release....................................53
SECTION 4.19 Compliance with Laws.....................................53
SECTION 4.20 Payment of Taxes and Other Claims........................53
SECTION 4.21 Notice of Defaults.......................................54
SECTION 4.22 Waiver of Stay, Extension or Usury Laws..................54
SECTION 4.23 Limitation on Preferred Stock of Subsidiaries............54
SECTION 4.24 Limitation on Restricted and Unrestricted
Subsidiaries.............................................54
SECTION 4.25 Maintenance of Office or Agency..........................55
SECTION 4.26 Corporate Existence......................................56
ARTICLE V SUCCESSOR COMPANY................................................................56
SECTION 5.01 Merger, Consolidation or Sale of All or Substantially
All Assets of Cadmus.....................................56
SECTION 5.02 Merger or Consolidation of the Issuer....................57
SECTION 5.03 Merger or Consolidation of a Guarantor...................58
ARTICLE VI DEFAULTS AND REMEDIES...........................................................59
SECTION 6.01 Events of Default and Remedies...........................59
SECTION 6.02 Acceleration.............................................61
SECTION 6.03 Other Remedies...........................................61
SECTION 6.04 Waiver of Past Defaults..................................62
SECTION 6.05 Control by Majority......................................62
SECTION 6.06 Limitation on Suits......................................62
SECTION 6.07 Rights of Holders to Receive Payment.....................63
SECTION 6.08 Collection Suit by Trustee...............................63
SECTION 6.09 Trustee May File Proofs of Claim.........................63
SECTION 6.10 Priorities...............................................63
SECTION 6.11 Undertaking for Costs....................................64
ARTICLE VII THE TRUSTEE....................................................................64
SECTION 7.01 Duties of Trustee........................................64
SECTION 7.02 Rights of Trustee........................................65
SECTION 7.03 Individual Rights of Trustee.............................66
SECTION 7.04 Trustee's Disclaimer.....................................67
SECTION 7.05 Notice of Defaults.......................................67
SECTION 7.06 Reports by Trustee to Holders............................67
SECTION 7.07 Compensation and Indemnity...............................67
SECTION 7.08 Replacement of Trustee...................................68
SECTION 7.09 Successor Trustee by Merger..............................69
SECTION 7.10 Eligibility; Disqualification............................70
SECTION 7.11 Preferential Collection of Claims Against Issuer.........70
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................................70
SECTION 8.01 Legal Defeasance and Covenant Defeasance.................70
SECTION 8.02 Conditions to Legal or Covenant Defeasance...............71
SECTION 8.03 Deposited Money and Government Senior
Subordinated Securities to be Held in Trust; Other
Miscellaneous Provisions.................................72
SECTION 8.04 Repayment to Issuer......................................72
SECTION 8.05 Reinstatement............................................73
SECTION 8.06 Satisfaction and Discharge of Indenture..................73
ARTICLE IX AMENDMENTS......................................................................74
SECTION 9.01 Without Consent of Holders...............................74
SECTION 9.02 With Consent of Holders..................................75
SECTION 9.03 Compliance with Trust Indenture Act......................76
SECTION 9.04 Revocation and Effect of Consents and Waivers............76
SECTION 9.05 Notation on or Exchange of Senior Subordinated
Securities...............................................77
SECTION 9.06 Trustee To Sign Amendments...............................77
SECTION 9.07 Payment for Consent......................................77
ARTICLE X SUBORDINATION OF SENIOR SUBORDINATED SECURITIES..................................78
SECTION 10.01 Senior Subordinated Securities Subordinated to Senior
Debt.....................................................78
SECTION 10.02 No Payment on Securities in Certain Circumstances........78
SECTION 10.03 Payment Over of Proceeds upon Dissolution, etc...........79
SECTION 10.04 Subrogation..............................................81
SECTION 10.05 Obligations of Cadmus Unconditional .....................81
SECTION 10.06 Notice to Trustee........................................82
SECTION 10.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................82
SECTION 10.08 Trustee's Relation to Senior Debt........................83
SECTION 10.09 Subordination Rights Not Impaired by Acts or
Omissions of Cadmus or Holders of Senior Debt............83
SECTION 10.10 Holders Authorize Trustee To Effectuate Subordination
of Senior Subordinated Securities........................83
SECTION 10.11 This Article Not To Prevent Events of Default............84
SECTION 10.12 Trustee's Compensation Not Prejudiced....................84
SECTION 10.13 No Waiver of Subordination Provisions....................84
SECTION 10.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................84
SECTION 10.15 Amendments...............................................84
ARTICLE XI SUBSIDIARY GUARANTEES...........................................................85
SECTION 11.01 Guarantor Guarantees.....................................85
SECTION 11.02 Limitation on Liability..................................86
SECTION 11.03 Successors and Assigns...................................87
SECTION 11.04 No Waiver................................................87
SECTION 11.05 Release of Guarantors....................................87
SECTION 11.06 Modification.............................................87
ARTICLE XII SUBORDINATION OF SUBSIDIARY GUARANTEES.........................................88
SECTION 12.01 Subsidiary Guarantees Subordinated to Guarantor
Senior Debt..............................................88
SECTION 12.02 No Payment on Securities in Certain Circumstances........88
SECTION 12.03 Payment Over of Proceeds upon Dissolution, etc...........89
SECTION 12.04 Subrogation..............................................91
SECTION 12.05 Obligations of the Guarantors Unconditional..............91
SECTION 12.06 Notice to Trustee........................................92
SECTION 12.07 Reliance on Judicial Order or Certificate of Liquidating
Agent....................................................93
SECTION 12.08 Trustee's Relation to Guarantor Senior Debt..............93
SECTION 12.09 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Debt..............................................93
SECTION 12.10 Holders Authorize Trustee To Effectuate Subordination
of Subsidiary Guarantees.................................93
SECTION 12.11 This Article Not To Prevent Events of Default............94
SECTION 12.12 Trustee's Compensation Not Prejudiced....................94
SECTION 12.13 No Waiver of Subordination Provisions....................94
SECTION 12.14 Subordination Provisions Not Applicable to Money
Held in Trust for Holders................................94
SECTION 12.15 Amendments...............................................95
ARTICLE XIII MISCELLANEOUS.................................................................95
SECTION 13.01 Trust Indenture Act Controls.............................95
SECTION 13.02 Notices..................................................95
SECTION 13.03 Communication by Holders with Other Holders..............96
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.......96
SECTION 13.05 Statements Required in Certificate or Opinion............97
SECTION 13.06 When Senior Subordinated Securities Disregarded..........97
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar.............97
SECTION 13.08 Legal Holidays...........................................97
SECTION 13.09 GOVERNING LAW............................................97
SECTION 13.10 Submission to Jurisdiction...............................98
SECTION 13.11 No Recourse Against Others...............................98
SECTION 13.12 Successors...............................................98
SECTION 13.13 Multiple Originals.......................................98
SECTION 13.14 Table of Contents; Headings..............................98
SECTION 13.15 Severability.............................................98
</TABLE>
EXHIBITS
EXHIBIT A - Form Of Senior Subordinated Note
EXHIBIT B - Form Of Rollover Note
EXHIBIT C - Global Senior Subordinated Securities Legend
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CADMUS
COMMUNICATIONS CORPORATION'S CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED
STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 281
<SECURITIES> 0
<RECEIVABLES> 67,824
<ALLOWANCES> 2,370
<INVENTORY> 27,978
<CURRENT-ASSETS> 102,815
<PP&E> 238,803
<DEPRECIATION> 111,896
<TOTAL-ASSETS> 285,229
<CURRENT-LIABILITIES> 75,174
<BONDS> 65,214
0
0
<COMMON> 3,923
<OTHER-SE> 116,620
<TOTAL-LIABILITY-AND-EQUITY> 285,229
<SALES> 308,596
<TOTAL-REVENUES> 308,596
<CGS> 246,994
<TOTAL-COSTS> 279,694
<OTHER-EXPENSES> 1,387
<LOSS-PROVISION> 494
<INTEREST-EXPENSE> 6,085
<INCOME-PRETAX> 21,430
<INCOME-TAX> 8,251
<INCOME-CONTINUING> 13,179
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,179
<EPS-PRIMARY> 1.67
<EPS-DILUTED> 1.63
</TABLE>
