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SECURITIES & EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 19, 1997
AEP INDUSTRIES INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-14450 22-1916107
(State of Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
125 Phillips Avenue, South Hackensack, New Jersey 07606
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code) (201) 641-6600
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ITEM 5. OTHER EVENTS.
On November 19, 1997, Registrant sold in a private placement $200,000,000
of 9.875% Senior Subordinated Notes due 2007 at an issue price of 99.224%
resulting in an effective yield of 10%. The discount to the initial purchasers
was 2.75%, resulting in proceeds to the Company of $192,948,000. The initial
purchasers were J.P. Morgan Securities Inc., Morgan Stanley & Co., Incoporated
and Salomon Brothers Inc. The net proceeds of the sale were used to repay a
portion of indebtedness outstanding under Registrant's existing Credit
Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
The Exhibits listed below are filed as a part of this report:
1. Purchase Agreement, dated November 14, 1997, among Registrant and
J.P. Morgan Securities, Inc., Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
2. Registration Rights Agreement, dated as of November 19, 1997,
among Registrant and J.P. Morgan Securities, Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc.
3. Indenture, dated as of November 19, 1997, between the Registrant
and The Bank of New York, as Trustee.
4. Specimen form of Note (included as Exhibit A to Exhibit 3 above).
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 hereunto duly authorized.
AEP INDUSTRIES INC.
(Registrant)
Dated: November 25, 1997 /s/ Lawrence R. Noll
----------------------------------------
Lawrence R. Noll
Vice President, Controller and Secretary
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EXHIBIT 1
AEP INDUSTRIES INC.
$200,000,000
9.875 % Senior Subordinated Notes due 2007
Purchase Agreement
November 14, 1997
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
AEP Industries Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and Salomon Brothers Inc (the "Initial Purchasers") $200,000,000 aggregate
principal amount of its 9.875% Senior Subordinated Notes due 2007 (the "Notes").
The Notes will be issued pursuant to an Indenture to be dated as of November 19,
1997 (the "Indenture") between the Company and The Bank of New York, as trustee
(the "Trustee").
The offering and sale of the Notes to the Initial Purchasers will be made
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon the exemption therefrom provided by Section
4(2) of the Securities Act. Holders of Notes will have the benefits of a
Registration Rights Agreement to be dated as of November 19, 1997 between the
Company and the Initial Purchasers, substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement") pursuant to which the Issuers
will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Registration Statement") registering an issue of senior subordinated
notes of the Company (the "Exchange Notes") which are identical in all material
respects to the Notes (except that the Exchange Securities will not contain
terms with respect to transfer restrictions or liquidated damages) and
(ii) under certain limited circumstances, a shelf registration statement with
respect to the resale of the Securities pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement"). This Agreement, the
Indenture, the Notes, the Exchange Notes and the Registration Rights Agreement
are collectively referred to herein as the "Offering Agreements."
The Company hereby agrees with the Initial Purchasers as follows:
1. Upon the basis of the representations and warranties herein contained,
the Company agrees to issue and sell the Notes to the Initial Purchasers as
hereinafter provided, and each Initial Purchaser, subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company the respective
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principal amount of Notes set forth opposite such Initial Purchaser's name on
Schedule I hereto at a price (the "Purchase Price") equal to 96.474% of their
principal amount.
2. The Company understands that the Initial Purchasers intend (i) to
offer privately their respective portions of the Notes as soon after this
Agreement has become effective as in the judgment of the Initial Purchasers is
advisable and (ii) initially to offer the Notes upon the terms set forth in the
Offering Memorandum (as defined below).
The Company confirms that it has authorized the Initial Purchasers, subject
to the restrictions set forth below, to distribute copies of the Offering
Memorandum in connection with the offering of the Notes. Each Initial Purchaser
hereby makes to the Company the following representations and agreements:
(a) it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act; and
(b) (A) it will not solicit offers for, or offer to sell, the Notes
by any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act ("Regulation D")) or in
any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (B) it will solicit offers for the Notes only
from, and will offer the Notes only to, (1) persons whom it reasonably
believes to be "qualified institutional buyers" within the meaning of Rule
144A under the Securities Act or (2) upon the terms and conditions set
forth in Annex I to this Agreement (which Annex is expressly incorporated
into, and made a part of, this Agreement).
3. Payment for the Notes shall be made by wire transfer in immediately
available funds, to the account specified by the Company to the Initial
Purchasers no later than noon on the Business Day (as defined below) prior to
the Closing Date (as defined below), on November 19, 1997, or at such other time
on the same or such other date as the Initial Purchasers and the Company may
agree upon in writing. The time and date of such payment are referred to herein
as the "Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Notes shall be made against delivery to the nominee of The
Depository Trust Company for the account of the Initial Purchasers or such other
persons designated in writing by the Initial Purchasers of one or more global
notes representing the Notes (collectively, the "Global Note"), with any
transfer taxes payable in connection with the transfer to the Initial Purchasers
paid by the Company. The Global Note will be made available for inspection by
the Initial Purchasers at the office of J.P. Morgan Securities Inc. at the
address set forth above, or at such other location as the Company and the
Initial Purchasers agree, not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. The Company represents and warrants to each Initial Purchaser as
follows:
(a) A preliminary offering memorandum, dated November 3, 1997 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated
November 14, 1997 (the "Offering Memorandum"), have been prepared in
connection with the offering of the Notes. Any reference to the
Preliminary Offering Memorandum or the Offering Memorandum (or to material
included therein) shall be deemed to refer to and include any material
incorporated by reference therein. The Preliminary Offering Memorandum or
the Offering Memorandum and any amendments or supplements thereto did not,
as of their respective dates, and the Offering Memorandum will not as of
the Closing Date, contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing shall not apply to
statements or omissions in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto made in reliance upon and
in conformity with written information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser expressly for
use therein.
(b) The audited and unaudited financial statements, and the related
notes thereto, included or incorporated by reference in the Offering
Memorandum present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations and changes in their consolidated cash flows
and stockholders' equity for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and the interim
statements have been prepared on a basis substantially consistent with that
of the audited consolidated financial statements, except for the absence of
year-end adjustments to interim statements. The pro forma financial
statements, and the related notes thereto, and other pro forma financial
information included in the Offering Memorandum have been prepared on a
basis consistent with the historical financial statements included in the
Offering Memorandum, include all material adjustments to the historical
financial statements required by Rule 11-02 of Regulation S-X under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to reflect the transactions described in the Offering
Memorandum, and are based upon good faith estimates and assumptions
believed by the Company to be reasonable.
(c) The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources, including, without
limitation, internal Company research, surveys or studies, that the Company
believes are reliable and accurate.
(d) Since the respective dates as of which information is given in
the Offering Memorandum, there has not been any material change in the
capital stock or long-term debt of the Company or any of the Subsidiaries
(as defined below), or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries (as defined below), taken as a whole (a "Material Adverse
Change" or a "Prospective Material Adverse Change," respectively),
otherwise than as set forth in or contemplated by the Offering Memorandum.
Since the respective dates as of which information is given in the Offering
Memorandum, neither the Company nor any of the Subsidiaries has entered
into any transaction or agreement material to the Company and the
Subsidiaries taken as a whole, other than in the ordinary course of
business consistent with past practice.
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own and lease its
properties and conduct its business as described in the Offering
Memorandum, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing, singly or in the aggregate with all
other such failures, would not have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
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(f) The Company has, and, as of the Closing Date (prior to the
consummation of the transactions contemplated by the Offering Memorandum),
will have the capitalization set forth in the Offering Memorandum under the
caption "Capitalization." All of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued, are fully paid
and non-assessable and, except as described in the Offering Memorandum, are
not subject to any preemptive or similar rights; and, except as described
in or expressly contemplated by the Offering Memorandum, there are no
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company or any of the Subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind to which the Company or
any of the Subsidiaries is a party relating to the issuance of any capital
stock of the Company or of any such Subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options.
(g) Each of the subsidiaries of the Company (the "Subsidiaries") that
is a corporation has been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of incorporation, with
corporate power and authority to own and lease its properties and conduct
its business as described in the Offering Memorandum, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing, singly or in the aggregate with all other such failures, would
not have a Material Adverse Effect. All of the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable, and (except as otherwise set
forth in the Offering Memorandum) are, and as of the Closing Date, will be
owned by the Company, directly or indirectly, free and clear of all
material liens, encumbrances, security interests or claims.
(h) The Company has all requisite corporate power and authority to
execute each of the Offering Agreements and to perform its obligations
hereunder and thereunder; and all corporate action or action by
stockholders and/or the board of directors, as the case may be, required to
be taken by the Company for the due authorization, execution and delivery
of each of the Offering Agreements and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, when duly authorized, executed
and delivered by the Initial Purchasers, will constitute a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms except to the extent that (i) the enforcement
thereof may be subject to (A) bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
(B) general principles of equity and the discretion of the court before
which any proceedings therefor may be brought and (ii) the enforcement of
rights to indemnity and contribution thereunder may be limited by
applicable law.
(k) The Indenture has been duly authorized, executed and delivered by
the Company and, when duly authorized, executed and delivered by the
Trustee, will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms
except to the extent that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization,
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moratorium or similar laws affecting creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(l) The Notes and the Exchange Notes have been duly authorized and,
when executed, issued and delivered pursuant to this Agreement, the
Indenture or the Registration Rights Agreement, as the case may be, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled
to the benefits provided by the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(m) The Notes, the Registration Rights Agreement and the Indenture
conform, in all material respects, to the descriptions thereof contained in
the Offering Memorandum.
(n) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Notes) will violate or result in a violation by the Company of Section
7 of the Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations G, T, U, and X of the Board of Governors of
the Federal Reserve System.
(o) Neither the Company nor any of the Subsidiaries is, (i) in
violation of its charter or by-laws, (ii) in default, and no event has
occurred which, with the giving of notice or lapse of time or both would
be, in violation of or in default under, its organizational documents or
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party or
by which it or any of them or any of their respective properties is
subject, except for any such defaults which would not singly or in the
aggregate have a Material Adverse Effect or (iii) in violation of any law,
ordinance, governmental rule or regulation or any order, judgment or decree
to which it or any of their respective properties is subject, except for
any such violations which would not singly or in the aggregate have a
Material Adverse Effect.
(p) The execution and delivery by the Company of the Offering
Agreements, the issuance and sale of the Notes and the Exchange Notes, the
performance by the Company of all of its obligations under the Offering
Agreements and the consummation of the transactions contemplated thereby do
not and will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, franchise agreement or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries
is bound or to which any of their respective properties is subject or
(ii) result in any violation of (a) the charter or by-laws or similar
organizational document of the Company or any of the Subsidiaries or
(b) any applicable law or statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company,
the Subsidiaries or any of their respective properties, except, in the case
of clauses (i) and (ii)(b), for any such conflicts, breaches, defaults or
violations that, singly or in the aggregate, would not have a Material
Adverse Effect.
(q) No consent, approval, authorization, order, license, registration
or qualification of or with any court or governmental agency or body is
required for the execution and delivery by the Company of the Offering
Agreements, the issuance and sale of the Notes and the issuance of the
Exchange Notes, the performance by the Company of its obligations under the
Offering Agreements or the con-
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summation of the transactions contemplated thereby, except for such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as (i) have been obtained, (ii) as may be required under
any state securities or Blue Sky Laws in connection with the purchase and
distribution of the Notes by the Initial Purchasers or the issuance of the
Exchange Notes and (iii) in the case of the issuance of the Exchange Notes
or the performance of the Registration Rights Agreement, such as may be
required under the Securities Act and the Trust Indenture Act of 1939, as
amended (the "TIA").
(r) Other than as set forth in the Offering Memorandum, there are no
legal or governmental investigations, actions, suits or proceedings
(collectively, "Proceedings") pending against or affecting the Company or
any of the Subsidiaries or any of their respective properties or of which
the Company or any of the Subsidiaries is or, to its knowledge, may be a
party or of which any property of the Company or any of the Subsidiaries is
or, to its knowledge, may be the subject which, singly or in the aggregate,
could have, or reasonably could be expected to have, a Material Adverse
Effect or which could reasonably be expected to prevent or adversely affect
the issuance of the Notes or the Exchange Notes or challenge the validity
or enforceability of any of the Offering Agreements or any action taken or
to be taken pursuant to the Offering Agreements; and to the Company's best
knowledge, no such Proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(s) The Company and the Subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to
in the Offering Memorandum and except to the extent as would not, singly or
in the aggregate, have a Material Adverse Effect; and any real property and
buildings held under lease by the Company and the Subsidiaries are held by
them under valid, existing and enforceable leases with such exceptions as
would not, singly or in the aggregate, have a Material Adverse Effect.
(t) The Company is not, nor will it be after giving effect to the
offering and sale of the Notes and the application of the proceeds
therefrom, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act").
(u) Arthur Andersen LLP, who have certified certain financial
statements in the Offering Memorandum, are independent public accountants
within the meaning of rule 101 of the AICPA's Code of Professional Conduct
and its interpretations and rulings.
(v) The Company and the Subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith, except such amounts that are not, singly or in the
aggregate, material to the Company and the Subsidiaries taken as a whole;
and there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any
Subsidiary, other than such tax deficiencies in such amounts that are not,
singly or in the aggregate, material to the Company and the Subsidiaries
taken as a whole.
(w) Neither the Company, nor any of the Subsidiaries nor any person
acting on its or their behalf has taken or will take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Notes.
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(x) Each of the Company and the Subsidiaries owns, possesses or has
obtained all licenses, franchises, permits, certificates, consents, orders,
approvals and other authorizations (collectively, "Permits") from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations, all domestic or foreign courts and other
tribunals necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof,
except where the failure to obtain any such Permit or make any such
declaration or filing would not, singly or in the aggregate, have a
Material Adverse Effect and neither the Company nor any such Subsidiary has
received any notice of any proceeding relating to revocation or
modification of any such Permit; and each of the Company and the
Subsidiaries is in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof, except to the
extent that failure to so comply would not, singly or in the aggregate,
have a Material Adverse Effect.
(y) There are no existing or, to the Company's knowledge, threatened
labor disputes with the employees of the Company or any of the Subsidiaries
which, singly or in the aggregate, would have a Material Adverse Effect.
(z) The Company and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state, provincial, local or municipal
laws, rules, regulations, ordinances, codes, policies or rules of common
law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses, (iii) are in compliance with all terms and
conditions of any such permit, license or approval and (iv) have not
received any notice of any currently pending or threatened administrative,
regulatory or judicial action, suit, demand, claim, lien, notice of
noncompliance or violation, investigation or proceeding relating in any way
to any Environmental Law, except, in each case, where such noncompliance
with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a Material Adverse Effect.
(aa) Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended (the "Code"), except to the extent that any such non-compliance,
singly or in the aggregate, would not have a Material Adverse Effect. No
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA no "accumulated funding
deficiency" as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each such
plan (excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
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(bb) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Offering Memorandum has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(cc) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act ("Regulation D")) thereof has
directly, or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Notes
in a manner that would require the registration under the Securities Act of
the offering contemplated by the Offering Memorandum.
(dd) Neither the Company nor any person acting on behalf of the
Company has offered or sold the Notes by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the
Securities Act or, with respect to Notes sold outside the United States to
non-U.S. persons (as defined in Rule 902 under the Securities Act), by
means of any directed selling efforts within the meaning of Rule 902 under
the Securities Act, and the Company and all persons acting on its behalf
have complied with and will implement the "offering restrictions" within
the meaning of such Rule 902.
(ee) It is not necessary in connection with the offer, sale and
delivery of the Notes in the manner contemplated by this Agreement and the
Offering Memorandum to register the Notes under the Securities Act or to
qualify an indenture under the TIA.
(ff) The Notes satisfy the requirements set forth in Rule 144A(d)(3)
under the Securities Act.
(gg) None of the Subsidiaries are organized under the laws of any
state of the United States or the District of Columbia.
5. The Company covenants and agrees with each of the Initial Purchasers
as follows:
(a) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchasers a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchasers reasonably object;
(b) if, at any time prior to the completion of the Offering (as
defined in the Offering Memorandum), any event shall occur as a result of
which it is necessary to amend or supplement the Offering Memorandum in
order that the Offering Memorandum does not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances when the Offering
Memorandum is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
law, forthwith to prepare and furnish, at the expense of the Company, to
the Initial Purchasers and to the dealers (whose names and addresses the
Initial Purchasers will furnish to the Company) to which Notes may have
been sold by the Initial Purchasers and to any other dealers upon request,
such amendments or supplements to the Offering Memorandum as may be
necessary so that the Offering Memorandum as so amended or supplemented
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser,
misleading or so that the Offering Memorandum will comply with law;
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(c) the Company will cooperate with the Initial Purchasers and their
counsel in connection with the registration or qualification of the Notes
for offering and sale by the Initial Purchasers and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
may designate and will file such documents necessary or appropriate in
order to effect such registration or qualification; provided, however, that
in no event shall the Company be obligated to file a general consent to
service of process in any jurisdiction or to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to taxation or service of process in suits, other than
those arising out of the offering or sale of the Notes, in any jurisdiction
where it is not now so subject;
(d) for five years from the Closing Date, to furnish to the Initial
Purchasers copies of all reports or other communications (financial or
other) furnished to holders of Notes, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(e) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer,
sell, contract to sell, or otherwise dispose of any debt securities of or
guaranteed by the Company or any of the Subsidiaries which are
substantially similar to the Notes;
(f) to use the net proceeds received by the Company from the sale of
the Notes pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(g) to use its best efforts to cause such Notes to be eligible for
the PORTAL trading system ("PORTAL") of the National Association of
Securities Dealers, Inc. and for the Notes to be eligible for clearance and
settlement through the Depository Trust Company;
(h) during the period of two years after the Closing Date, the
Company will not, and will use its reasonable best efforts to cause its
subsidiaries not to, resell any of the Notes which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them;
(i) whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, issuance, execution,
authentication and delivery of the Notes, including any expenses of the
Trustee, (ii) incident to the preparation, printing and distribution of the
Preliminary Offering Memorandum and the Offering Memorandum (including in
each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of
eligibility for investment of the Notes under the laws of such
jurisdictions as the Initial Purchasers may designate (including reasonable
fees of counsel for the Initial Purchasers and their disbursements in
connection with such activities), (iv) in connection with the listing of
the Notes on any securities exchange or inclusion of the Notes on PORTAL,
(v) in connection with the printing (including word processing and
duplication costs) and delivery of the Preliminary and Supplemental Blue
Sky Memoranda and any Legal Investment Survey and the furnishing to the
Initial Purchasers and dealers of copies of the Preliminary Offering
Memorandum and Offering Memorandum (and any amendments and supplements
thereto), including mailing and shipping, as herein provided,
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<PAGE>
(vi) payable to rating agencies in connection with the rating of the Notes,
and (vii) incurred by the Company in connection with a "road show"
presentation to potential investors;
(j) to take all action that is appropriate or necessary to assure
that offerings of other securities will not be integrated for purposes of
the Securities Act with the offering contemplated hereby;
(k) not to solicit any offer to buy or offer to sell Notes by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act;
(l) while the Notes remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to, during any period in which the Company is not subject to Section 13 or
15(d) under the Exchange Act, make available to the Initial Purchasers and
any holder of Notes in connection with any sale thereof and any prospective
purchaser of Notes, in each case upon request, the information specified
in, and meeting the requirements of, Rule 144A(d)(4) ("Rule 144A(d)(4)
Information") under the Securities Act (or any successor thereto);
(m) not to take any action prohibited by Regulation M under the
Exchange Act, in connection with the distribution of the Notes contemplated
hereby;
(n) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested; and
(o) to do and perform all things required to be done and performed by
it under this Agreement and the Registration Rights Agreement that are
within its control prior to or after the Closing Date, and to use its
reasonable best efforts to satisfy all conditions precedent on its part to
the delivery of the Notes.
6. The several obligations of the Initial Purchasers hereunder to
purchase the Notes on the Closing Date are subject to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The representations and warranties of the Company contained
herein shall be true and correct, in all material respects, on and as of
the Closing Date as if made on and as of the Closing Date and the Company
shall have complied, in all material respects, with all agreements and all
conditions on their part to be performed or satisfied hereunder at or prior
to the Closing Date.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any downgrading, (ii) any
intended or potential downgrading or (iii) any review or possible change
that does not indicate an improvement, in the rating accorded any debt of
or guaranteed by the Company or any of the Subsidiaries by any "nationally
recognized statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act, if, in the case of the
securities of any Subsidiary, the event described in clauses (i), (ii) or
(iii) above would have a Material Adverse Effect.
(c) Since the respective dates as of which information is given in
the Offering Memorandum, there shall not have been any material change in
the capital stock or long-term debt of the Com-
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pany or any of the Subsidiaries or any Material Adverse Change, or any
development involving a Prospective Material Adverse Change, otherwise than
as set forth or contemplated in the Offering Memorandum, the effect of which
in the sole judgment of the Initial Purchasers makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes on the
Closing Date on the terms and in the manner contemplated in the Offering
Memorandum. Neither the Company nor any of the Subsidiaries has sustained
since the date of the latest audited financial statements included in the
Offering Memorandum any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Memorandum.
(d) The Initial Purchasers shall have received on and as of the
Closing Date a certificate of the chief financial officer of the Company,
satisfactory to the Initial Purchasers to the effect set forth in
subsections (a) through (c) of this Section and to the further effect that
(i) the audited and unaudited financial statements of the Company included
or incorporated by reference in the Offering Memorandum have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis, (ii) the interim statements have been prepared on a basis
substantially consistent with that of the audited consolidated financial
statements, except for the absence of year-end adjustments to interim
statements and (iii) such officer has notified the Company's independent
public accountants as to the foregoing.
(e) Bachner, Tally, Polevoy & Misher LLP, counsel for the Company,
shall have furnished to the Initial Purchasers their written opinion, dated
the Closing Date, in form and substance satisfactory to the Initial
Purchasers, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware
with corporate power and authority to own and lease its properties and
conduct its business as described in the Offering Memorandum;
(ii) other than as set forth in the Offering Memorandum, to such
counsel's knowledge, there are no Proceedings pending against or
affecting the Company or any of the Subsidiaries or any of their
respective properties or of which the Company or any of the
Subsidiaries is or may be a party or of which any property of the
Company or any of the Subsidiaries is or may be the subject which,
singly or in the aggregate, could have, or reasonably could be
expected to have, a Material Adverse Effect or which could reasonably
be expected to prevent or adversely affect the issuance of the Notes
or the Exchange Notes or challenge the validity or enforceability of
any of the Offering Agreements or any action taken or to be taken
pursuant to the Offering Agreements; and to the best knowledge of such
counsel, no such Proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, when duly authorized,
executed and delivered by the Initial Purchasers, will constitute a
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms except, to the extent
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, (ii) general principles of equity and
the discretion of
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<PAGE>
the court before which any proceeding therefor may be brought and (iii)
with respect to rights of indemnification and contribution, principles
of public policy or federal or state securities laws relating thereto.
The Company has all requisite corporate power and authority to execute
each of the Offering Agreements and to perform its obligations
hereunder and thereunder; and all corporate action or action by
stockholders and/or the board of directors, as the case may be,
required to be taken by the Company for the due authorization,
execution and delivery of each of the Offering Agreements and the
consummation of the transactions contemplated thereby have been duly
and validly taken;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and, when duly authorized, executed and
delivered by the Trustee, will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought;
(vi) the Notes and the Exchange Notes have been duly authorized
and, when executed, issued and delivered pursuant to this Agreement,
the Indenture or the Registration Rights Agreement, as the case may
be, will have been duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the
Company, entitled to the benefits provided by the Indenture and
enforceable against the Company in accordance with their terms, except
to the extent that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought; and the Notes were not, when issued, of the
same class as securities known to such counsel (after due inquiry) to
be listed on a national securities exchange registered under Section 6
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or quoted in a U.S. automated inter-dealer quotation system;
(vii) the execution and delivery by the Company of the Offering
Agreements, the issuance and sale of the Notes and the Exchange Notes,
the performance by the Company of all of its obligations under the
Offering Agreements and the consummation of the transactions
contemplated thereby do not and will not (i) conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, franchise agreement or other agreement or instrument,
in each case, identified to such counsel as material in a certificate
of the Company or filed by the Company under the Securities Act or the
Exchange Act as a material agreement, to which the Company or any of
the Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of their respective properties
is subject or (ii) result in any violation of (a) the charter or
by-laws of the Company or (b) any existing obligation of or
restriction on the Company under any order, judgment or decree of any
Delaware, New York or federal court or governmental authority binding
on the Company and identified to such counsel in a certificate of the
Company or violate any material Delaware, New York or federal statute
or regulation that such counsel has, in the exercise of customary
professional diligence, recognized as directly applicable to the
Company or to transactions of the type contemplated by the Offering
Agreements, except, in the case of clauses (i) and (ii)(b), for any
such conflicts, breaches, defaults or violations that, singly or in
the aggregate, would not have a Material Adverse Effect;
12
<PAGE>
(viii) no consent, approval, authorization, order, license,
registration or qualification of or with any Delaware, New York or
federal court or governmental agency or body is required for the
issuance and sale of the Notes and the issuance of the Exchange Notes
or the consummation of the other transactions contemplated by the
Offering Agreements, except for such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
(i) have been obtained, (ii) as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Initial Purchasers and (iii) in the case of the
performance of the Registration Rights Agreement, such as may be
required under the Securities Act and the TIA;
(ix) the Company is not, nor will it be after giving effect to
the offering and sale of the Notes and the application of the proceeds
therefrom (as described in the Offering Memorandum under the caption
"Use of Proceeds"), an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act;
(x) the summaries of the agreements or documents to which the
Company is a party (including the Notes, the Registration Rights
Agreement and the Indenture) included under the headings "Description
of Credit Facilities -- Credit Agreement" and "Description of Notes"
in the Offering Memorandum, insofar as such statements purport to
constitute summary of legal documents or instruments, fairly summarize
and present in all material respects the information required to be
presented therein;
(xi) no registration under the Securities Act of the Notes is
required in connection with the sale of the Notes to the Initial
Purchasers as contemplated by this Agreement and the Offering
Memorandum or in connection with the initial resale of the Notes by
the Initial Purchasers in accordance with Section 2 (including
Annex I) of this Agreement, and prior to the commencement of the
Exchange Offer (as defined in the Registration Rights Agreement) or
the effectiveness of the Shelf Registration Statement (as defined in
the Registration Rights Agreement), the Indenture is not required to
be qualified under the TIA, in each case assuming (i) that the
purchasers who buy the Notes in the initial resales are Qualified
Institutional Buyers or non-U.S. Persons (as defined in Rule 902 under
the Act), (ii) the accuracy of the Company's representations contained
in this Agreement regarding the absence of a general solicitation in
connection with the sale of the Notes to the Initial Purchasers and
the initial resales thereof and the accuracy of the Initial
Purchasers' representations contained in this Agreement and (iii) the
compliance by the Initial Purchasers, any other seller of the Notes or
any person acting on their behalf with the provisions of Rule
144A(d)(2) of the Securities Act; and
(xii) such counsel has no reason to believe that the Offering
Memorandum (other than the financial statements and other financial
information included therein as to which such counsel need express no
belief) or any amendment or supplement thereto contained as of its
date or contains as of the Closing Date any untrue statement of a
material fact or omitted as of its date or omits as of the Closing
Date to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
With respect to subparagraph (xiii) above, Bachner, Tally, Polevoy &
Misher LLP may state that such counsel has participated in conferences with
directors, officers and other representatives of the
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<PAGE>
Company and representatives of the independent public accountants for the
Company, at which conferences the contents of the Offering Memorandum and
related matters were discussed, and, although such counsel has not
independently verified and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained in
the Offering Memorandum, except as specified.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the State of New York and the General Corporation Law of the State of
Delaware, to the extent such counsel deems proper and to the extent
specified in such opinion, if at all, upon an opinion or opinions (in form
and substance reasonably satisfactory to the Initial Purchasers' counsel)
of other counsel, reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws and (B) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers
of the Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company.
The opinion of Bachner, Tally, Polevoy & Misher LLP described above
shall be rendered to the Initial Purchasers at the request of the Company
and shall so state therein.
(f) The Initial Purchasers shall have received on and as of the
Closing Date an opinion of Cahill Gordon & Reindel, counsel to the Initial
Purchasers, with respect to such matters as the Initial Purchasers may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
(g) On the date of the issuance of the Offering Memorandum and also
on the Closing Date, Arthur Andersen LLP shall have furnished to the
Initial Purchasers letters, dated the respective dates of delivery thereof,
in form and substance satisfactory to the Initial Purchasers, containing
statements and information of the type customarily included in accountants'
"comfort letters" with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(h) The Company shall have executed and delivered the Registration
Rights Agreement.
(i) On or prior to the Closing Date, the Company shall have furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall reasonably request.
(j) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion of
such counsel, is material or is necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
7. (a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, each affiliate of any Initial Purchaser which assists such Initial
Purchaser in the distribution of the Notes, and each person, if any, that
controls any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Offering
Memorandum, any preliminary offering memorandum or any amendment or supplement
14
<PAGE>
thereto, or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Initial Purchaser
furnished to the Company in writing by such Initial Purchaser expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any preliminary offering memorandum shall not inure to the benefit of any
Initial Purchaser from whom the person asserting any such losses, claims,
damages, liabilities or judgments purchased Notes, or any person controlling
such Initial Purchaser, if a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Initial Purchaser to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Notes to such person, and if the Offering
Memorandum (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, liabilities; unless such failure to furnish was a
result of non-compliance by the Company with Section 5(n).
(b) Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Company's directors and executive officers
and each person that controls the Company within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Initial Purchaser, but only with
respect to information relating to such Initial Purchaser furnished to the
Company in writing by such Initial Purchaser expressly for use in the Offering
Memorandum, any preliminary offering memorandum or any amendment or supplement
thereto.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding;
provided, however, that the failure to so notify the Indemnifying Person shall
not relieve it of any obligation or liability which it may have hereunder or
otherwise (unless and only to the extent that such failure directly results in
the loss or compromise of any material rights or defenses). In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Initial Purchasers, each affiliate of any Initial Purchaser which assists such
Initial Purchaser in the distribution of the Securities and such control persons
of Initial Purchasers shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, its directors, its executive
officers and such control persons of the Company shall be designated in writing
by the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have
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<PAGE>
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the second and third sentences of
this clause (c), the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding or claim effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
For purposes of this Section 7, the only written information furnished by
the Initial Purchasers to the Company expressly for use in the Offering
Memorandum is the information in the last paragraph of the cover page of the
Offering Memorandum, and the last paragraph on page 2 of the Offering Memorandum
and the second and third sentences of the third paragraph, the sixth paragraph,
the eighth paragraph and the tenth paragraph, all under the caption "Plan of
Distribution" in the Offering Memorandum.
(d) If the indemnification provided for in paragraphs (a) and (b) of this
Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Initial Purchasers on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Company and the total discounts and commissions
received by the Initial Purchasers, in each case as set forth in the table on
the cover of the Offering Memorandum, bear to the aggregate offering price of
the Notes. The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total price at which the Notes purchased by it were offered exceeds the
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of
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<PAGE>
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Notes set forth opposite
their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser or any person controlling any Initial Purchaser or by
or on behalf of the Company, the Company's officers or directors or any other
person controlling the Company and (iii) acceptance of and payment for any of
the Notes.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice
given to the Company, if after the execution and delivery of this Agreement
and prior to the Closing Date any of the following has occurred: (i) since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change or development involving a
prospective material adverse change in the condition, financial or otherwise,
of the Company, or the earnings, affairs, or business prospects of the
Company, whether or not arising in the ordinary course of business, which
would, in your judgment, make it impracticable to market the Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or material change in economic conditions, if the effect
of such outbreak, escalation, calamity, crisis or change on the financial
markets of the United States or elsewhere would, in your judgment, make it
impracticable to market the Notes on the terms and in the manner contemplated
in the Offering Memorandum, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market or limitation on prices for securities
on any such exchange or National Market, (iv) trading of any securities of
the Company shall have been suspended on any exchange, (v) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which
in your judgment materially and adversely affects, or will materially and
adversely affect, the business or operations of the Company, (vi) the
declaration of a banking moratorium by either federal or New York State
authorities or (vii) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
your judgment has a material adverse effect on the financial markets in the
United States.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. If on the Closing Date, any one or more of the Initial Purchasers
shall fail or refuse to purchase Notes which it or they have agreed to
purchase hereunder, and the aggregate number of Notes which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Notes to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the number of Notes set forth opposite
their respective names in Schedule I bears to the aggregate number of Notes
set forth opposite the names of all such non-defaulting Initial Purchasers,
or in such other proportions as the Initial Purchasers may specify, to
purchase the Notes which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date; provided,
however, that in no event shall the number of Notes that any Initial
Purchaser has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 9 by an amount in excess of one-ninth of such number of Notes
without the
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written consent of such Initial Purchaser. If on the Closing Date, any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Notes which it or they have agreed to purchase hereunder, and the aggregate
number of Notes with respect to which such default occurs is more than
one-tenth of the aggregate number of Notes to be purchased, and arrangements
satisfactory to the remaining Initial Purchasers and the Company for the
purchase of such Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Initial Purchaser or the Company. In any such case either the remaining
Initial Purchasers or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Offering Memorandum or in any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability
in respect of any default of such Initial Purchaser under this Agreement or
the offering contemplated hereunder.
11. If this Agreement shall be terminated by the Initial Purchasers, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement
in any material respect, or if for any reason the Company shall be unable to
perform its obligations under this Agreement in any material respect or any
condition of the Initial Purchasers' obligations cannot be fulfilled in any
material respect, the Company agrees to reimburse the Initial Purchasers or
such Initial Purchasers as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and expenses of their counsel) reasonably incurred by such
Initial Purchasers in connection with this Agreement or the offering
contemplated hereunder.
12. This Agreement shall inure to the benefit of and be binding upon the
Company, the Initial Purchasers, any affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Notes, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Notes from any Initial Purchaser
shall be deemed to be a successor by reason merely of such purchase.
13. Any action by the Initial Purchasers hereunder may be taken by J.P.
Morgan Securities Inc. alone on behalf of the Initial Purchasers, and any
such action taken by J.P. Morgan Securities Inc. alone shall be binding upon
the Initial Purchasers. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Initial Purchasers shall be given to the Initial Purchasers c/o J.P. Morgan
Securities Inc., 60 Wall Street, New York, New York 10260 (telecopy:
212/648-5121 or 212/648-5951); Attention: Syndicate Department. Notices to
the Company shall be given at Corporate Headquarters, 125 Phillips Avenue,
South Hackensack, New Jersey 07606, (telecopy 201/807-2849), Attention: EVP
- - Finance.
14. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
18
<PAGE>
[Remainder of Page Intentionally Left Blank.]
19
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
AEP INDUSTRIES INC.
By: ______________________________
Name:
Title:
Accepted as of the date
first above written:
J.P. MORGAN SECURITIES INC.
By: ______________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: ______________________________
Name:
Title:
SALOMON BROTHERS INC
By: ______________________________
Name:
Title:
20
<PAGE>
ANNEX I
(A) The Notes have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. Each Initial Purchaser represents that it
has offered and sold the Notes and will offer and sell the Notes (i) as part of
their distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering and the date of closing thereof, only in
accordance with Rule 903 of Regulation S or Rule 144A under the Securities Act
or pursuant to paragraph B of this Annex. Accordingly, each Initial Purchaser
agrees that none of it, its affiliates or any persons acting on its or their
behalf has engaged or will engage in any directed selling efforts with respect
to the Notes and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that,
at or prior to confirmation of sale of Notes (other than a sale pursuant to Rule
144A or paragraph B of this Annex), it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Initial Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Notes, except with its affiliates or with the prior written
consent of the Company.
(B) Notwithstanding the foregoing, Notes in registered form may be
offered, sold and delivered by the Initial Purchasers in the United States and
to U.S. persons pursuant to Section 2 of this Agreement without delivery of the
written statement required by paragraph (A) above.
(C) Each Initial Purchaser further represents and agrees that (i) it has
not offered or sold, and will not offer or sell, in the United Kingdom by means
of any document, any Notes other than to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or which it is reasonable
to expect will so do, or in circumstances which do not otherwise constitute an
offer to the public within the meaning of the Public Offers of Securities
Regulations 1995 of Great Britain, (ii) it has complied, and will comply, with
all applicable provisions of the Financial Services Act 1986 and any regulation
promulgated thereto of Great Britain with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom, and
(iii) it has only issued or passed on, and will only issue or pass on, in the
United Kingdom, any document received by it in connection with the issuance of
the Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
<PAGE>
(D) Each Initial Purchaser agrees that it will not offer, sell or deliver
any of the Notes in any jurisdiction except under circumstances that will result
in compliance with the applicable laws thereof, and that it will take at its own
expense whatever action is required to permit its purchase and resale of the
Notes in such jurisdictions. Each Initial Purchaser understands that no action
has been taken to permit a public offering in any jurisdiction where action
would be required for such purposes. Each Initial Purchaser agrees not to cause
any advertisement of the Notes to be published in any newspaper or periodical or
posted in any public place and not to issue any circular relating to the Notes.
22
<PAGE>
SCHEDULE I
Principal
Amount of
Notes To Be
Initial Purchaser Purchased
----------------- --------------
J.P. Morgan Securities Inc. ....................... $120,000,000
Morgan Stanley & Co. Incorporated ................. 40,000,000
Salomon Brothers Inc. ............................. 40,000,000
--------------
Total ................................... $200,000,000
==============
<PAGE>
Exhibit 2
REGISTRATION RIGHTS AGREEMENT
Dated as of November 19, 1997
among
AEP INDUSTRIES INC.
and
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
and
SALOMON BROTHERS INC
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
November 19, 1997, by and among AEP INDUSTRIES INC., a corporation formed
under the laws of the State of Delaware (the "Company"), and J.P. MORGAN
SECURITIES INC., MORGAN STANLEY & CO. INCORPORATED and SALOMON BROTHERS INC
(collectively, the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of November 14, 1997, between the Company and the Initial
Purchasers (the "Purchase Agreement") relating to the sale by the Company to
the Initial Purchasers, severally, of $200,000,000 aggregate principal amount
of its 9.875% Senior Subordinated Notes due 2007 (the "Notes"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement for the equal benefit of both of the Initial Purchasers and their
direct and indirect transferees. The execution and delivery of this
Agreement is a condition to the Initial Purchasers' obligation to purchase
the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Black Out Period: See Section 3(a).
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 180th day after the Issue Date. DTC: See
Section 5(i).
DTC: See Section 5(i).
Effectiveness Date: The 150th day after the Issue Date; provided,
however, that with respect to any Shelf Registration Statement, the
Effectiveness Date shall be the 90th day following the Filing Date with
respect thereto.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
<PAGE>
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Filing Date: (A) If no Registration Statement has been filed by the
Company pursuant to this Agreement, the 90th day after the Issue Date;
provided, however, that if a Shelf Notice is given within 15 days of the
Filing Date, then the Filing Date with respect to the Initial Shelf
Registration Statement shall be the 20th day after the date of the giving of
such Shelf Notice and (B) in each other case (which may be applicable
notwithstanding the consummation of the Exchange Offer), the 90th day after
the delivery of a Shelf Notice.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of November 19, 1997, between
the Company and The Bank of New York, as trustee, pursuant to which the Notes
are being issued, as amended or supplemented from time to time in accordance
with the terms thereof.
Initial Purchasers: See the introductory paragraph to this
Agreement.
Initial Shelf Registration Statement: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The original issue date of the Notes.
NASD: See Section 5(t).
Notes: See the preamble to this Agreement.
Participant: See Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
2
<PAGE>
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
Records: See Section 5(p).
Registrable Securities: The Notes upon original issuance thereof
and at all times subsequent thereto, each Exchange Security as to which
Section 2(c)(v) hereof is applicable upon original issuance and at all times
subsequent thereto and, if issued, the Private Exchange Securities, until in
the case of any such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, (i) a Registration Statement (other than,
with respect to any Exchange Security as to which Section 2(c)(v) hereof is
applicable, the Exchange Registration Statement) covering such Notes,
Exchange Securities or Private Exchange Securities has been declared
effective by the SEC and such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, have been disposed of in accordance with such
effective Registration Statement, (ii) such Notes, Exchange Securities or
Private Exchange Securities, as the case may be, are sold in compliance with
Rule 144, or (iii) such Notes, Exchange Securities or Private Exchange
Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and
sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration Statement: See Section 3(b).
Subsequent Shelf Registration Statement: See Section 3(b).
3
<PAGE>
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee as defined in the Indenture and, if existent,
the trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
Underwritten registration or underwritten offering: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
2. Exchange Offer
(a) The Company agrees (to the extent not prohibited by applicable
law or applicable interpretations of the SEC) to file with the SEC as soon as
practicable after the Closing Date, but in no event later than the Filing
Date, an offer to exchange (the "Exchange Offer") any and all of the
Registrable Securities for a like aggregate principal amount of debt
securities of the Company which are identical in all material respects to the
Notes (the "Exchange Securities") (and which are entitled to the benefits of
a trust indenture which is substantially identical in all material respects
to the Indenture (other than such changes as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification of such trust
indenture under the TIA) and which has been qualified under the TIA), except
that the Exchange Securities shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain
no restrictive legend thereon. The Company agrees to use its reasonable best
efforts to keep the Exchange Offer open for at least 30 business days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to Holders and to consummate the Exchange Offer on or prior
to the Effectiveness Date. The Exchange Offer will be registered under the
Securities Act on the appropriate form (the "Exchange Registration
Statement") and will comply with all applicable tender offer rules and
regulations under the Exchange Act. If after such Exchange Registration
Statement is initially declared effective by the SEC, the Exchange Offer or
the issuance of the Exchange Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court such Exchange Registration Statement shall be
deemed not to have become effective for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be deemed to
represent that any Exchange Securities received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement with any person to
participate in the distribution of the Exchange Securities in violation of
the provisions of the Securities Act, and that such Holder is not an
affiliate of the Company within the meaning of the Securities Act.
Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis,
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company shall have no further obligation to register
Registrable Securities (other than Private Exchange Securities and other than
Exchange Securities as to which clause 2(c)(v) hereof applies) pursuant to
Section 3 of this Agreement. No securities other than the Exchange
Securities shall be included in the Exchange Registration Statement.
(b) The Company shall include within the Prospectus contained in
the Exchange Registration Statement one or more section(s) reasonably
acceptable to the Initial Purchasers, which shall contain a summary statement
of the positions taken or policies made by the Staff of the SEC with respect
to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange Offer (a
"Participating Bro-
4
<PAGE>
ker-Dealer"), whether such positions or policies have been publicly
disseminated by the Staff of the SEC or such positions or policies, in the
reasonable judgment of the Initial Purchasers, represent the prevailing views
of the Staff of the SEC. Such section(s) shall also allow the use of the
prospectus by all persons subject to the prospectus delivery requirements of
the Securities Act, including all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may
resell the Exchange Securities.
The Company shall use its reasonable best efforts to keep the
Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons
must comply with such requirements in order to resell the Exchange
Securities, provided, however, that such period shall not exceed 90 days (or
such longer period if extended pursuant to the last paragraph of Section 5)
(the "Applicable Period").
If, prior to consummation of the Exchange Offer, an Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Company upon the request of such
Initial Purchaser shall, simultaneously with the delivery of the Exchange
Securities in the Exchange Offer, issue and deliver to each such Initial
Purchaser, in exchange (the "Private Exchange") for the Notes held by such
Initial Purchaser, a like principal amount of debt securities of the Company
that are identical in all material respects to the Exchange Securities (the
"Private Exchange Securities") (and which are issued pursuant to the same
indenture as the Exchange Securities) except for the placement of a
restrictive legend on such Private Exchange Securities. The Private Exchange
Securities shall bear the same CUSIP number as the Exchange Securities.
Interest on the Exchange Securities and Private Exchange Securities will
accrue from the last interest payment date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the Issue Date.
Any indenture under which the Exchange Securities or the Private
Exchange Securities will be issued shall provide that the holders of any of
the Exchange Securities and the Private Exchange Securities will vote and
consent together on all matters (to which such holders are entitled to vote
or consent) as one class and that none of the holders of the Exchange
Securities and the Private Exchange Securities will have the right to vote or
consent as a separate class on any matter (to which such holders are entitled
to vote or consent).
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the SEC, the Company reasonably determines in
good faith, after consultation with counsel, that it is not permitted to
effect the Exchange Offer, (ii) the Exchange Offer is not commenced on or
prior to the Effectiveness Date, (iii) the Exchange Offer is, for any
reason, not consummated on or prior to the 5th day after the Expiration Date,
(iv) any Holder of Private Exchange Securities so requests, or (v) in the
case of any Holder that participates in the Exchange Offer, such Holder does
not receive Exchange Securities on the date of the exchange that may be sold
without restriction under state and federal securities laws (the occurrence
of any such event set forth in the foregoing clauses (i) through (v), a
"Shelf Registration Event"), then, in the case of such events the Company
shall promptly deliver to the Holders and the Trustee notice thereof (the
"Shelf Notice") and thereafter the Company shall file an Initial Shelf
Registration Statement pursuant to Section 3.
3. Shelf Registration Statement
If a Shelf Notice is delivered as contemplated by Section 2(c), then:
(a) Initial Shelf Registration Statement. The Company shall as
promptly as reasonably practicable prepare and file with the SEC a Registration
Statement for an offering to be made on a continuous basis
5
<PAGE>
pursuant to Rule 415 covering all of the Registrable Securities (the "Initial
Shelf Registration Statement"). If the Company shall have not yet filed an
Exchange Offer, the Company shall use its reasonable best efforts to file
with the SEC the Initial Shelf Registration Statement on or prior to the
applicable Filing Date. The Initial Shelf Registration Statement shall be on
Form S-1 or another appropriate form permitting registration of such
Registrable Securities for resale by such holders in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act on or prior to the 120th day after the filing thereof with the
SEC and to keep the Initial Shelf Registration Statement continuously
effective under the Securities Act until the date which is 24 months from the
Issue Date (subject to extension pursuant to the last paragraph of Section 5
hereof) (the "Effectiveness Period"), or such shorter period ending when (i)
all Registrable Securities covered by the Initial Shelf Registration
Statement have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration Statement, (ii) a Subsequent Shelf Registration
Statement covering all of the Registrable Securities has been declared
effective under the Securities Act or (iii) the Registrable Securities may be
sold or transferred without restriction pursuant to Rule 144(k) under the
Securities Act. Notwithstanding the foregoing, the Company may suspend the
effectiveness of the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement (as defined below) for a period (the "Black Out
Period") not to exceed 45 days if (i)(A) an event occurs and is continuing as
a result of which such Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement would, in the good faith judgment of the
Company, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (B) the
Company determines in good faith that the disclosure of such event at such
time would have a material adverse effect on the business, operations or
prospects of the Company or (ii) in the good faith judgment of the Company,
it would be seriously detrimental to the Company and its stockholders to
maintain the effectiveness of such registration statement and it is therefore
essential to suspend the effectiveness of such registration statement;
provided, however, that the Company shall only be entitled to one Black Out
Period during any 18 month period.
(b) Subsequent Shelf Registration Statements. If the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Company shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any
event shall within 45 days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner expected to obtain the withdrawal of the
order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities (a "Subsequent Shelf Registration Statement"). If a Subsequent
Shelf Registration Statement is filed, the Company shall use its best efforts
to cause the Subsequent Shelf Registration Statement to be declared effective
as soon as practicable after such filing and to keep such Registration
Statement continuously effective for a period equal to the number of days in
the Effectiveness Period less the aggregate number of days during which the
Initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement was previously continuously effective. As used herein the term
"Shelf Registration Statement" means the Initial Shelf Registration Statement
and any Subsequent Shelf Registration Statement.
(c) Supplements and Amendments. The Company shall promptly
supplement and amend the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used
for such Shelf Registration Statement, if required by the Securities Act, or
if reasonably requested by the Holders of a majority in aggregate principal
amount of the Registrable Securities covered by such Registration Statement
or by any underwriter of such Registrable Securities.
6
<PAGE>
4. Additional Interest
(a) The Company and the Initial Purchasers agree that the Holders
of Registrable Securities will suffer damages if the Company fails to fulfill
its obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, the Company agrees to pay, as liquidated damages, additional
interest on the Registrable Securities ("Additional Interest") under the
circumstances and to the extent set forth below (each of which shall be given
independent effect and shall not be duplicative):
(i) (A) if neither the Exchange Registration Statement nor the Initial
Shelf Registration Statement has been filed on or prior to the Filing Date
or (B) notwithstanding that the Company has consummated or will consummate
the Exchange Offer, the Company is required to file a Shelf Registration
Statement and such Shelf Registration Statement is not filed on or prior to
the Filing Date applicable thereto, Additional Interest shall accrue on the
Registrable Securities over and above the stated interest at a rate of .25%
per annum for the first 90 days immediately following the applicable Filing
Date, such Additional Interest rate increasing by an additional .25% per
annum at the beginning of each subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor the
Initial Shelf Registration Statement is declared effective by the SEC on or
prior to the Effectiveness Date or (B) notwithstanding that the Company has
consummated or will consummate the Exchange Offer, the Company is required
to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the SEC on or prior to Effectiveness
Date in respect of such Shelf Registration Statement, Additional Interest
shall be accrued on the Registrable Securities included or which should
have been included in such Registration Statement over and above the stated
interest at a rate of .25% per annum for the first 90 days immediately
following the day after the Effectiveness Date, such Additional Interest
rate increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period; and
(iii) if (A) the Company has not exchanged Exchange Securities for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the Consummation Date or (B) the Exchange Registration
Statement ceases to be effective at any time prior to the time that the
Exchange Offer is consummated or (C) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time during the Effectiveness Period (other
than during a Black Out Period), then Additional Interest shall be accrued
on the Registrable Securities (over and above any interest otherwise
payable on the Registrable Securities) at a rate of .25% per annum for the
first 90 days commencing on the (x) 180th day after the Issue Date, in the
case of (A) above, or (y) the day the Exchange Registration Statement
ceases to be effective in the case of (B) above, or (z) the day such Shelf
Registration Statement ceases to be effective in the case of (C) above,
such Additional Interest rate increasing by an additional .25% per annum at
the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Registrable
Securities may not exceed at any one time in the aggregate 1.0% per annum;
and provided, further, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration Statement as required hereunder (in the
case of clause (i) of this Section 4), (2) upon the effectiveness of the
Exchange Registration Statement or the applicable Shelf Registration
Statement as required hereunder (in the case of clause (ii) of this Section
4), or (3) upon the exchange of Exchange Securities for all Notes tendered
(in the case of clause (iii)(A) of this Section 4), or upon the effectiveness
of the Exchange Registration Statement which had ceased to remain effective
(in the case of (iii)(B) of this Section 4), or upon
7
<PAGE>
the effectiveness of the Shelf Registration Statement which had ceased to
remain effective (in the case of (iii)(C) of this Section 4), Additional
Interest on the Registrable Securities as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue.
(b) The Company shall notify the Trustee within three business days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). The Company
shall pay the Additional Interest due on the Registrable Securities by
depositing with the Trustee, in trust, for the benefit of the Holders
thereof, on or before the applicable semi-annual interest payment date,
immediately available funds in sums sufficient to pay the Additional Interest
then due to Holders of Registrable Securities. The Additional Interest
amount due shall be payable on each interest payment date to the record
Holder of Registrable Securities entitled to receive the interest payment to
be made on such date as set forth in the Indenture. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the affected Registrable Securities of such
Holders, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed), and,
the denominator of which is 360. Each obligation to pay Additional Interest
shall be deemed to accrue immediately following the occurrence of the
applicable Event Date. The parties hereto agree that the Additional Interest
provided for in this Section 4 constitutes a reasonable estimate of the
damages that may be incurred by Holders of Registrable Securities by reason
of the failure of a Shelf Registration Statement or Exchange Offer to be
filed or declared effective, or a Shelf Registration Statement to remain
effective, as the case may be, in accordance with this Section 4.
5. Registration Procedures
In connection with the registration of any Registrable Securities
pursuant to Sections 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant
thereto the Company shall:
(a) Use its reasonable best efforts to prepare and file with the
SEC, as soon as practicable after the date hereof but in any event on or
prior to the Filing Date, a Registration Statement or Registration Statements
as prescribed by Section 2 or 3, and to use its best efforts to cause each
such Registration Statement to become effective and remain effective as
provided herein, provided, however, that, if (1) such filing is pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the Company
shall, upon written request, furnish to and afford the Holders of the
Registrable Securities and each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed; the Company
shall not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded a
reasonable opportunity to review prior to the filing of such document, if the
Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement, or each such Participating
Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object by notice to the Company after
a reasonable period to review unless the Company is advised by Counsel that
such amendment or supplement is legally required;
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(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement or Exchange
Registration Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be (except for a Black Out Period);
cause the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with
the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect
to the disposition of all securities covered by such Registration Statement
as so amended or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus; the Company shall be deemed to
have not used its best efforts to keep a Registration Statement effective
during the Applicable Period if the Company voluntarily takes any action that
would result in selling Holders of the Registrable Securities covered thereby
or Participating Broker-Dealers seeking to sell Exchange Securities not being
able to sell such Registrable Securities or such Exchange Securities during
that period unless such action is required by applicable law or unless the
Company complies with this Agreement, including without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, notify the selling Holders of
Registrable Securities, or each such Participating Broker-Dealer, as the case
may be, their counsel and the managing underwriters, if any, within 3
business days (and confirm such notice in writing), (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective amendment,
when the same has become effective under the Securities Act (including in
such notice a written statement that any Holder may, upon request, obtain,
without charge, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable
Securities or the Exchange Securities to be sold by any Participating
Broker-Dealer for offer or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, (iv) of the happening of any
event or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement,
it will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the Prospectus, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (v) of the Company's reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or
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exemption from qualification) of any of the Registrable Securities or the
Exchange Securities to be sold by any Participating Broker-Dealer, for sale
in any jurisdiction, and, if any such order is issued, to use its best
efforts to obtain the withdrawal of any such order at the earliest possible
moment.
(e) If a Shelf Registration Statement is filed pursuant to Section
3 and if requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering, (i) promptly incorporate in
a prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, or such Holders or counsel reasonably request
to be included therein, or (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; provided, however, that
the Company will not be required to incorporate such information or make such
filings during a Black Out Period.
(f) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, furnish to each selling Holder of
Registrable Securities and to each such Participating Broker-Dealer who so
requests and to counsel and each managing underwriter, if any, without
charge, one conformed copy of the Registration Statement or Statements and
each post-effective amendment thereto, including financial statements and
schedules, and if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, deliver to each selling Holder of
Registrable Securities, or each such Participating Broker-Dealer, as the case
may be, their counsel, and the underwriters, if any, without charge, as many
copies of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request;
and, subject to the last paragraph of this Section 5, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and
sale of the Registrable Securities covered by or the sale by Participating
Broker-Dealers of the Exchange Securities pursuant to such Prospectus and any
amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Registration Statement by
any Participating Broker-Dealer who seeks to sell Exchange Securities during
the Applicable Period, to use its best efforts to register or qualify, and to
cooperate with the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriters reasonably request
in writing, provided, however, that where Exchange Securities held by
Participating Broker-Dealers or Registrable Securities are offered other than
through an underwritten offering, the Company agrees to cause its counsel to
(i) perform Blue Sky investigations and file registrations and qualifications
required to be filed pursuant to this Section 5(h); (ii) keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be
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kept effective hereunder; and (iii) do any and all other reasonable acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Exchange Securities held by Participating Broker-Dealers or the
Registrable Securities covered by the applicable Registration Statement,
provided, further, that the Company shall not be required to (A) qualify
generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C)
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction.
(i) If a Shelf Registration Statement is filed pursuant to Section
3, cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company ("DTC"); and
enable such Registrable Securities to be registered in such names as the
managing underwriter or underwriters, if any, or Holders may request.
(j) Use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or approved by
such other United States governmental agencies or authorities of the United
States as may be necessary to enable the seller or sellers thereof or the
underwriters, if any, to consummate the disposition of such Registrable
Securities, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Company will cooperate
in all reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, upon the occurrence of any event
contemplated by paragraph 5(c)(iv) or 5(c)(v) above, as promptly as
practicable prepare and (subject to Section 5(a) above and any applicable
Black Out Period) file with the SEC, solely at the expense of the Company, a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder or to the purchasers of the Exchange
Securities to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Use its best efforts to cause the Registrable Securities
covered by a Registration Statement or the Exchange Securities, as the case
may be, to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement or the Exchange Securities,
as the case may be, or the managing underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with printed
certificates for the Registrable Securities in a form eligible for deposit
with DTC and (ii) provide a CUSIP number for the Registrable Securities.
(n) In connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration Statement, enter into an
underwriting agreement as is customary in underwritten offerings and take all
such other actions as are reasonably requested by the managing underwriters
in order to expedite or facilitate the registration or the disposition of
such Registrable Securities, and in such connection, (i) make such
representations and warranties to the underwriters, with respect to the
business of the Company and its subsidiaries, if
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any, and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
as are customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when reasonably requested; (ii) obtain a written
opinion of counsel to the Company and updates thereof in form and substance
reasonably satisfactory to the managing underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably
requested by underwriters; (iii) obtain "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriters from the independent certified public accountant(s) of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as may be reasonably requested
by underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other provisions
and procedures acceptable to Holders of a majority in aggregate principal
amount of Registrable Securities covered by such Registration Statement and
the managing underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(o) If (1) a Shelf Registration Statement is filed pursuant to
Section 3, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, make available for inspection by any
selling Holder of such Registrable Securities being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Securities, if any, and
any attorney, accountant or other agent retained by any such selling holder
or each such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors
and employees of the Company to supply all information in each case
reasonably requested by any such Inspector in connection with such
Registration Statement. Records determined in good faith by the Company to
be confidential shall not be disclosed by any Inspector notified of such
determination unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) the information in such Records
has been made generally available to the public or (iv) the release thereof
is necessary or advisable in connection with any action, suit or proceeding
involving any Holder or other Investor. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such is made generally available to the public. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company at its own expense to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(p) Provide an indenture trustee for the Registrable Securities or
the Exchange Securities, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a), as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable
Securities; and in connection therewith, cooperate with the trustee under
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any such indenture and the holders of the Registrable Securities, to effect
such changes to such indenture as may be required for such indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use its
best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required
to be filed with the SEC to enable such indenture to be so qualified in a
timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 90
days after the end of any 12-month period (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Shelf
Registration Statement, which statements shall cover said 12-month periods.
(r) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange for
the Exchange Securities or the Private Exchange Securities, as the case may
be, the Company shall mark, or caused to be marked, on such Registrable
Securities that such Registrable Securities are being cancelled in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied.
(s) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company in customary form, relating to
the Exchange Securities or the Private Exchange Securities, as the case may
be, addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as
the case may be, and which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Securities and Private
Exchange Securities and the related indenture; and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be, and the
related indenture constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms
(with customary exceptions).
(t) Reasonably cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD").
(u) Use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered by
a Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Company such information regarding such seller or
Participating Broker-Dealer and the distribution of such Registrable
Securities or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, as the Company may, from time to time,
reasonably request. The Company may exclude from such registration the
Registrable Securities of any seller or Participating Broker-Dealer who fails
to furnish such information within 10 business days after receiving such
request. Each seller as to which any Shelf Registration Statement is being
effected is deemed to agree to furnish promptly to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such seller not materially misleading.
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Each Holder of Registrable Securities and each Participating
Broker-Dealer agrees by acquisition of such Registrable Securities or
Exchange Securities to be sold by such Participating Broker-Dealer, as the
case may be, that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii),
5(c)(iv), or 5(c)(v), such Holder will forthwith discontinue disposition of
such Registrable Securities covered by such Registration Statement or
Prospectus or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, until such holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 5(k), or
until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed. In the event the Company shall
give any such notice, each of the Effectiveness Period and the Applicable
Period shall be extended by the number of days during such periods from and
including the date of the giving of such notice to and including the date
when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) or (y) the
Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration Statement is filed
or becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable
Securities or Exchange Securities and determination of the eligibility of the
Registrable Securities or Exchange Securities for investment under the laws
of such jurisdictions in the United States (x) where the holders of
Registrable Securities are located, in the case of the Exchange Securities,
or (y) as provided in Section 5(h), in the case of Registrable Securities or
Exchange Securities to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities or Exchange
Securities in a form eligible for deposit with DTC and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or, in respect of Registrable Securities or Exchange
Securities to be sold by any Participating Broker-Dealer during the
Applicable Period, by the Holders of a majority in aggregate principal amount
of the Registrable Securities included in any Registration Statement or of
such Exchange Securities, as the case may be), (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Company and
fees and disbursements of special counsel for the sellers of Registrable
Securities (subject to the provisions of Section 6(b)), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such
performance), (vi) rating agency fees, (vii) Securities Act liability
insurance, if the Company desires such insurance, (viii) fees and expenses of
all other Persons retained by the Company, (ix) internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees of the Company performing legal or accounting duties), (x) the
expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange, if applicable, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any
other documents necessary in order to comply with this Agreement.
(b) In connection with any Shelf Registration Statement hereunder,
the Company shall reimburse the Holders of the Registrable Securities being
registered in such registration for the fees and disbursements of not more
than one counsel (in addition to appropriate local counsel) in an aggregate
amount not to ex-
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ceed $25,000 chosen by the Holders of a majority in aggregate principal
amount of the Registrable Securities to be included in such Registration
Statement. Such Holders shall be responsible for any and all other
out-of-pocket expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
7. Indemnification
The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities and each Participating Broker-Dealer selling Exchange
Securities during the Applicable Period, the affiliates, officers, directors,
employees, representatives and agents of each such person, and each person,
if any, who controls any such person within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and
other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment thereto) or Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Company in writing
by such Participant expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any Participant (or to the benefit of any person
controlling such Participant) from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities if such untrue statement or omission or alleged untrue statement
or omission made in such preliminary prospectus is eliminated or remedied in
the related final Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) and a copy of the
related Prospectus (as so amended or supplemented) shall not have been
furnished to such person, if required by law so to have been delivered, at or
prior to the sale of such Registrable Securities or Exchange Securities, as
the case may be, to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages, or liabilities, unless such failure to furnish was a result of
non-compliance by the Company with Section 5(g).
Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers, its employees and agents and each person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to each Participant, but only with respect to information relating to such
Participant furnished to the Company in writing by such Participant expressly
for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus. The liability of any
Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Securities giving rise
to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person
and any others the Indemnifying Person may designate in such pro-
15
<PAGE>
ceeding and shall pay the reasonable fees and expenses actually incurred by
such counsel related to such proceeding, provided, however, that the failure
to so notify the Indemnifying Person shall not relieve it of any obligation
or liability which it may have hereunder or otherwise (unless and only to the
extent that such failure directly results in the loss or compromise of any
material rights or defenses). In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed
to the contrary, (ii) the Indemnifying Person has failed within a reasonable
time to retain counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that the Indemnifying Person shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all Indemnified Persons, and that all such reasonable fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Participants and such control persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities sold by all such Participants and any such separate firm for the
Company, its directors, officers and such control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the Indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified Person in
respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Participants on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand
and the Participants on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Participants and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The parties shall agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to
16
<PAGE>
include, subject to the limitations set forth above, any reasonable legal or
other expenses actually incurred by such Indemnified Person in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall a Participant be required to
contribute any amount in excess of the amount by which proceeds received by
such Participant from sales of Registrable Securities exceeds the amount of
any damages that such Participant has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this Section
7 will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and Rule 144A
The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any
time the Company is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available
other information so long as necessary to permit sales pursuant to Rule 144
and Rule 144A under the Securities Act. The Company further covenants that
it will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable
such holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144 and Rule 144A under the Securities Act, as such Rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
SEC.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Registrable Securities included in such
offering and shall be reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company of any of
its obligations under this Agreement, each Holder of Registrable Securities,
in addition to being entitled to exercise all rights provided herein, in the
Indenture or, in the case of the Initial Purchasers, in the Purchase
Agreement or granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, the Company shall waive the
defense that a remedy at law would be adequate.
17
<PAGE>
(b) No Inconsistent Agreements. The Company has not, as of the
date hereof, entered and shall not, after the date of this Agreement, enter
into any agreement with respect to any of their securities that is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The
Company has not entered and will not enter into any agreement with respect to
any of its securities which will grant to any Person piggy-back rights with
respect to a Registration Statement.
(c) Adjustments Affecting Registrable Securities. The Company
shall not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the ability of
the Holders of Registrable Securities to include such Registrable Securities
in a registration undertaken pursuant to this Agreement.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of (A) Holders of at least a majority of the
then outstanding aggregate principal amount of Registrable Securities and (B)
in circumstances that would adversely affect the Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Securities held by all
Participating Broker-Dealers; provided, however, that Section 7 and this
Section 10(d) may not be amended, modified or supplemented without the prior
written consent of each Holder and each Participating Broker-Dealer
(including any Person who was a Holder or Participating Broker-Dealer of
Registrable Securities or Exchange Securities, as the case may be, disposed
of pursuant to any Registration Statement) affected by any such amendment,
modification or supplement. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Securities may be given by Holders of at least a
majority in aggregate principal amount of the Registrable Securities being
sold by such Holders pursuant to such Registration Statement, provided,
however, that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(e) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
(i) if to a Holder of Registrable Securities, at the most current address
given by the Trustee to the Company; and
(ii) if to the Company, Corporate Headquarters, 125 Phillips Avenue,
South Hackensack, New Jersey 07606, (telecopy 201/807-2489), Attention:
EVP - Finance.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee under
the Indenture at the address specified in such Indenture.
18
<PAGE>
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Registrable Securities; provided, however,
that this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign holds Registrable Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement, is intended by the parties as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(l) Securities Held by the Company or its Affiliates. Whenever the
consent or approval of holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
or any of its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage; provided,
however, that for purposes of this Section 10(1), no Initial Purchaser shall
be deemed to be an affiliate of the Company.
[Remainder of Page Intentionally Left Blank]
19
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AEP INDUSTRIES INC.
By:
-----------------------------------
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:
-----------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
-----------------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
-----------------------------------
Name:
Title:
20
<PAGE>
Exhibit 3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INDENTURE
Dated as of November 19, 1997
Between
AEP INDUSTRIES INC.,
and
THE BANK OF NEW YORK, Trustee
--------------
$200,000,000
9.875% Senior Subordinated Notes due 2007
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
Indenture
Trust Indenture Act Section Section
Section 310(a)(1)............................. 7.10
(a)(2)............................. 7.10
(a)(3)............................. N.A.
(a)(4)............................. N.A.
(a)(5)............................. 7.10
(b)................................ 7.08; 7.10; 13.02
(c)................................ N.A.
Section 311(a)................................ 7.11
(b)................................ 7.11
(c)................................ N.A.
Section 312(a)................................ 2.05
(b)................................ 13.03
(c)................................ 13.03
Section 313(a)................................ 7.06
(b)(1)............................. N.A.
(b)(2)............................. 7.06
(c)................................ 7.06; 13.02
(d)................................ 7.06
Section 314(a)................................ 4.11; 4.12; 13.02
(b)................................ N.A.
(c)(1)............................. 13.04
(c)(2)............................. 13.04
(c)(3)............................. N.A.
(d)................................ N.A.
(e)................................ 13.05
(f)................................ N.A.
Section 315(a)................................ 7.01
(b)................................ 7.05; 13.02
(c)................................ 7.01(a)
(d)................................ 7.01(c)
(e)................................ 6.11
Section 316(a)(last sentence)................. 2.09
(a)(1)(A).......................... 6.05
(a)(1)(B).......................... 6.04
(a)(2)............................. N.A.
(b)................................ 6.07
(c)................................ 10.04
Section 317(a)(1)............................. 6.08
(a)(2)............................. 6.09
(b)................................ 2.04
Section 318(a)................................ 13.01
__________________________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.......................................... 1
SECTION 1.02. Other Definitions.................................... 14
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.... 14
SECTION 1.04. Rules of Construction................................ 15
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating...................................... 15
SECTION 2.02. Execution and Authentication......................... 17
SECTION 2.03. Registrar and Paying Agent........................... 17
SECTION 2.04. Paying Agent To Hold Money in Trust.................. 18
SECTION 2.05. Securityholder Lists................................. 18
SECTION 2.06. Transfer and Exchange................................ 18
SECTION 2.07. Replacement Securities............................... 25
SECTION 2.08. Outstanding Securities............................... 25
SECTION 2.09. Treasury Securities.................................. 25
SECTION 2.10. Temporary Securities................................. 26
SECTION 2.11. Cancellation......................................... 26
SECTION 2.12. Defaulted Interest................................... 26
SECTION 2.13. CUSIP or CINS Number................................. 26
SECTION 2.14. Payments of Interest................................. 26
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee................................... 27
SECTION 3.02. Selection of Securities To Be Redeemed............... 27
SECTION 3.03. Notice of Redemption................................. 28
SECTION 3.04. Effect of Notice of Redemption....................... 28
SECTION 3.05. Deposit of Redemption Price.......................... 28
SECTION 3.06. Securities Redeemed in Part.......................... 29
i
<PAGE>
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities................................ 29
SECTION 4.02. Maintenance of Office or Agency...................... 29
SECTION 4.03. Limitation on Transactions with Affiliates........... 29
SECTION 4.04. Limitation on Incurrence of Indebtedness............. 30
SECTION 4.05. Limitation on Certain Asset Dispositions............. 32
SECTION 4.06. Limitation on Restricted Payments.................... 33
SECTION 4.07. Corporate Existence.................................. 36
SECTION 4.08. Payment of Taxes and Other Claims.................... 36
SECTION 4.09. Notice of Defaults................................... 36
SECTION 4.10. Maintenance of Properties............................ 37
SECTION 4.11. Compliance Certificate............................... 37
SECTION 4.12. Provision of Financial Information................... 37
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.............. 37
SECTION 4.14. Change of Control.................................... 38
SECTION 4.15. Limitation on Senior Subordinated Indebtedness....... 38
SECTION 4.16. Limitation on Restrictions Affecting Restricted
Subsidiaries....................................... 38
SECTION 4.17. Limitation on Liens.................................. 39
SECTION 4.18. Subsidiary Guarantees................................ 40
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations and
Certain Sales of Assets.............................. 40
SECTION 5.02. Successor Corporation Substituted.................... 41
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.................................... 41
SECTION 6.02. Acceleration......................................... 43
SECTION 6.03. Other Remedies....................................... 43
SECTION 6.04. Waiver of Past Default............................... 43
SECTION 6.05. Control by Majority.................................. 44
SECTION 6.06. Limitation on Suits.................................. 44
SECTION 6.07. Rights of Holders to Receive Payment................. 45
SECTION 6.08. Collection Suit by Trustee........................... 45
SECTION 6.09. Trustee May File Proofs of Claim..................... 45
SECTION 6.10. Priorities........................................... 45
SECTION 6.11. Undertaking for Costs................................ 46
ii
<PAGE>
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.................................... 46
SECTION 7.02. Rights of Trustee.................................... 47
SECTION 7.03. Individual Rights of Trustee......................... 48
SECTION 7.04. Trustee's Disclaimer................................. 48
SECTION 7.05. Notice of Defaults................................... 48
SECTION 7.06. Reports by Trustee to Holders........................ 48
SECTION 7.07. Compensation and Indemnity........................... 48
SECTION 7.08. Replacement of Trustee............................... 49
SECTION 7.09. Successor Trustee by Merger, etc..................... 50
SECTION 7.10. Eligibility; Disqualification........................ 50
SECTION 7.11. Preferential Collection of Claims Against Company.... 51
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Debt............... 51
SECTION 8.02. No Payment on Securities in Certain Circumstances.... 51
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc....... 52
SECTION 8.04. Subrogation.......................................... 53
SECTION 8.05. Obligations of Company Unconditional................. 53
SECTION 8.06. Notice to Trustee.................................... 53
SECTION 8.07. Reliance on Judicial Order or Certificate of
Liquidating Agent.................................. 54
SECTION 8.08. Trustee's Relation to Senior Debt.................... 54
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Debt............. 55
SECTION 8.10. Securityholders Authorize Trustee To Effectuate
Subordination of Securities........................ 55
SECTION 8.11. This Article Not to Prevent Events of Default........ 55
SECTION 8.12. No Waiver of Subordination Provisions................ 55
SECTION 8.13. Subordination Provisions Not Applicable to Money
Held in Trust for Securityholders; Payments May Be
Paid Prior to Dissolution.......................... 55
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations................. 56
SECTION 9.02. Application of Trust Money........................... 57
SECTION 9.03. Repayment to Company................................. 57
SECTION 9.04. Reinstatement........................................ 58
iii
<PAGE>
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders........................... 58
SECTION 10.02. With Consent of Holders.............................. 59
SECTION 10.03. Compliance with Trust Indenture Act.................. 60
SECTION 10.04. Revocation and Effect of Consents.................... 60
SECTION 10.05. Notation on or Exchange of Securities................ 61
SECTION 10.06. Trustee To Sign Amendments, etc...................... 61
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.............................. 61
SECTION 11.02. Severability......................................... 62
SECTION 11.03. Release of a Guarantor............................... 62
SECTION 11.04. Limitation of Guarantor's Liability.................. 62
SECTION 11.05. Contribution......................................... 62
SECTION 11.06. Execution of Guarantee............................... 63
SECTION 11.07. Subordination of Subrogation and Other Rights........ 63
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Subordinated to Senior Debt of Guarantor... 63
SECTION 12.02. No Payment on Guarantees in Certain Circumstances.... 63
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc....... 64
SECTION 12.04. Subrogation.......................................... 65
SECTION 12.05. Obligations of Guarantors Unconditional.............. 66
SECTION 12.06. Notice to Trustee.................................... 66
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent.................................. 66
SECTION 12.08. Trustee's Relation to Senior Debt of Guarantors...... 67
SECTION 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Senior
Debt of Guarantors................................. 67
SECTION 12.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantees........................ 67
SECTION 12.11. This Article Not to Prevent Events of Default........ 68
SECTION 12.12. No Waiver of Guarantee Subordination Provisions...... 68
SECTION 12.13. Subordination Provisions Not Applicable to Money
Held in Trust for Securityholders; Payments May Be
Paid Prior to Dissolution.......................... 68
iv
<PAGE>
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls......................... 68
SECTION 13.02. Notices.............................................. 69
SECTION 13.03. Communications by Holders with Other Holders......... 70
SECTION 13.04. Certificate and Opinion as to Conditions Precedent... 70
SECTION 13.05. Statements Required in Certificate or Opinion........ 70
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar............ 71
SECTION 13.07. Governing Law........................................ 71
SECTION 13.08. No Recourse Against Others........................... 71
SECTION 13.09. Successorsg.......................................... 71
SECTION 13.10. Counterpart Originals................................ 71
SECTION 13.11. Severability......................................... 71
SECTION 13.12. No Adverse Interpretation of Other Agreements........ 71
SECTION 13.13. Legal Holidays....................................... 71
EXHIBIT A - Form of Security A-1
EXHIBIT B - Form of Certificate of Transfer B-1
EXHIBIT C - Form of Certificate of Exchange C-1
____________________
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of this Indenture.
v
<PAGE>
INDENTURE dated as of November 19, 1997, between AEP INDUSTRIES INC., a
Delaware corporation (the "Company") and THE BANK OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 9.875%
Senior Subordinated Notes due 2007:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means, with respect to any Person, Indebtedness of
such Person (i) existing at the time such Person becomes a Restricted Subsidiary
or (ii) assumed in connection with the acquisition of assets from another
Person, including Indebtedness Incurred in connection with, or in contemplation
of, such Person's becoming a Restricted Subsidiary or such acquisition, as the
case may be.
"Acquisition" means (i) any capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) by the Company or any Restricted
Subsidiary to any other Person, or any acquisition or purchase of Capital Stock
of any other Person by the Company or any Restricted Subsidiary, in either case
pursuant to which such Person shall become a Restricted Subsidiary or shall be
consolidated or merged with or into the Company or any Restricted Subsidiary or
(ii) any acquisition by the Company or any Restricted Subsidiary of the assets
of any Person which constitute substantially all of an operating unit or line of
business of such Person or which is otherwise outside of the ordinary course of
business.
"Additional Interest" shall have the meaning set forth in the Registration
Rights Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar. See Section
2.03.
"Applicable Procedures" means with respect to any transfer or exchange of
interests in a Global Security, the rules and procedures of DTC, Euroclear and
Cedel that apply to such transfer or exchange.
"Asset Disposition" means any sale, transfer or other disposition
(including, without limitation, by merger, consolidation or
sale-and-leaseback transaction) of (i) shares of Capital Stock of a
Subsidiary of the Company (other than directors' qualifying shares) or (ii)
property or assets of the Company or any Subsidiary of the Company; provided,
however, that an Asset Disposition shall not include (a) any sale, transfer
or other disposition of shares of Capital Stock, property or assets by a
Restricted Subsidiary to the Company or to any Wholly Owned Subsidiary, (b)
any sale, transfer or other disposition of defaulted receivables for
collection or any sale, transfer or other disposition of property or assets
in the ordinary course of business, (c) any sale, trans-
<PAGE>
fer or other disposition that does not (together with all related sales,
transfers or dispositions) involve aggregate consideration in excess of $1.0
million, (d) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor and
other similar intellectual property, (e) the granting of any Lien (or
foreclosure thereon) securing Indebtedness to the extent that such Lien is
granted in compliance with Section 4.17, (f) any Restricted Payment permitted
by Section 4.06, (g) any disposition of property or assets in the ordinary
course of business to the extent such property or assets are obsolete,
worn-out, damaged, fully depreciated or otherwise unsuitable for use in the
Company's or any Restricted Subsidiary's business, (h) the sale, lease,
conveyance or disposition or other transfer of all or substantially all of
the assets of the Company as permitted under Section 5.01, (i) any
disposition that constitutes a Change of Control or (j) any Sale and
Lease-Back Transaction consummated within 180 days after the completion of
construction or acquisition of such asset.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, as at the time of determination, the present value (discounted according
to GAAP at the cost of indebtedness implied in the lease) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Lease-Back Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or liquidation
value payments of such Indebtedness or Preferred Stock, respectively, and the
amount of such principal or liquidation value payments, by (ii) the sum of all
such principal or liquidation value payments.
"Bankruptcy Code" means Title 11, United States Code, as amended.
"Basket" has the meaning set forth in Section 4.06.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of that Board.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York, New
York are authorized or obligated by law or executive order to close.
"Capital Lease Obligations" of any Person means the obligations to pay rent
or other amounts under a lease of (or other Indebtedness arrangements conveying
the right to use) real or personal property of such Person which are required to
be classified and accounted for as a capital lease or liability on the face of a
balance sheet of such Person in accordance with GAAP. The amount of such
obligations shall be the capitalized amount thereof in accordance with GAAP and
the stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
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"Cash Equivalents" means (i) marketable, direct obligations issued or
guaranteed by the United States of America, or any governmental entity or agency
or political subdivision thereof (provided, that the good faith and credit of
the United States of America is pledged in support thereof), maturing within one
year of the date of purchase; (ii) commercial paper issued by corporations or
financial institutions maturing within 180 days from the date of the original
issue thereof, and rated "P-1" or better by Moody's Investors Service, Inc. or
"A-1" or better by Standard & Poor's Rating Services or an equivalent rating or
better by any other nationally recognized securities rating agency;
(iii) certificates of deposit issued or acceptances accepted by or guaranteed by
any bank or trust company organized under the laws of the United States of
America or any state thereof or the District of Columbia, in each case having
capital, surplus and undivided profits totaling more than $500,000,000, maturing
within one year of the date of purchase; (iv) money market funds substantially
all of whose assets comprise securities of the type described in clauses
(i) through (iii) above and (v) below; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (i) and (iii) above entered into with any financial institution meeting
the qualifications specified in clause (iii) above and (vi) readily marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two highest rating categories
obtainable from either Moody's Investors Service, Inc. or Standard & Poor's
Rating Services.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow Available For Fixed Charges" of any Person means
for any period the Consolidated Net Income of such Person for such period
increased (to the extent Consolidated Net Income for such period has been
reduced thereby) by the sum of (without duplication) (i) Consolidated Interest
Expense of such Person for such period, plus (ii) Consolidated Income Tax
Expense of such Person for such period, plus (iii) the consolidated depreciation
and amortization expense included in the income statement of such Person
prepared in accordance with GAAP for such period, plus (iv) any other non-cash
charges to the extent deducted from or reflected in Consolidated Net Income
except for any non-cash charges that represent accruals of, or reserves for,
cash disbursements to be made in any future accounting period.
"Consolidated Cash Flow Ratio" of any Person means for any period the ratio
of (i) Consolidated Cash Flow Available for Fixed Charges of such Person for
such period to (ii) Consolidated Fixed Charges for such period; provided,
however, that all Incurrences and repayments of Indebtedness (including the
Incurrence giving rise to such calculation and any repayments in connection
therewith) and all dispositions (including discontinued operations) or
acquisition of assets (other than in the ordinary course of business) made
during or after such period and on or prior to the date of determination shall
be given pro forma effect as if they occurred on the first day of such
four-quarter period, except that Indebtedness under the Senior Credit Facility
shall be deemed to be the average daily balance of such Indebtedness during such
four-quarter period. Calculations of pro forma amounts in accordance with this
definition shall be done in accordance with Article 11 of Regulation S-X under
the Securities Act or any successor provision.
"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 (other than dividends paid in Qualified Capital
Stock) paid, accrued or scheduled to be 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.
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"Consolidated Income Tax Expense" of any Person means for any period the
consolidated provision for income taxes of such Person and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" for any Person means for any period,
without duplication, (a) the consolidated interest expense included in a
consolidated income statement (without deduction of interest or finance charge
income) of such Person and its Restricted Subsidiaries for such period
calculated on a consolidated basis in accordance with GAAP (including, without
limitation, (i) any amortization of debt discount, (ii) the net costs under
interest rate agreements, (iii) all capitalized interest and (iv) the interest
portion of any deferred payment obligation) and (b) the interest component of
Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued
by such Person and its Restricted Subsidiaries during such period as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP;
provided, however, that there shall be excluded therefrom (a) the net income (or
loss) of any Person acquired by such Person or a Restricted Subsidiary of such
Person in a pooling-of-interests transaction for any period prior to the date of
such transaction, (b) the net income (but not loss) of any Restricted Subsidiary
of such Person which is subject to restrictions which prevent or limit the
payment of dividends or the making of distributions to such Person to the extent
of such restrictions (regardless of any waiver thereof), (c) non-cash gains and
losses due solely to fluctuations in currency values, (d) the net income of any
Person that is not a Restricted Subsidiary of such Person, except to the extent
of the amount of dividends or other distributions representing such Person's
proportionate share of such other Person's net income for such period actually
paid in cash to such Person by such other Person during such period, (e) gains
or losses (other than for purposes of calculating Consolidated Net Income under
clause (3) of Section 4.06) on Asset Dispositions by such Person or its
Restricted Subsidiaries, (f) all extraordinary or non-recurring gains and losses
determined in accordance with GAAP and (g) 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 (or losses) of the successor corporation prior to
such consolidation, merger or transfer of assets.
"Continuing Director" means a director who either was a member of the Board
of Directors of the Company on the Issue Date or who became a director of the
Company subsequent to the Issue Date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors then on the Board of Directors of the Company, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such individual
is named as nominee for director.
"Currency Agreement" means, with respect to any Person, any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement, which may include the use of derivatives, designed to protect such
Person against, or to expose such Person to, fluctuations in currency values.
"Default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
"Designated Preferred Stock" means preferred stock of the Company (other
than Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary) and is so designated as Designated Preferred Stock pursuant to an
Officers' Certificate executed by the principal executive officer and the
principal financial officer of the Company, on the date of issuance thereof;
provided, however, that the net cash proceeds received by the
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Company from the issuance of such Designated Preferred Stock are excluded
from the calculation set forth in clause (3) of the first paragraph of
Section 4.06.
"Designated Senior Debt" means (i) so long as any Indebtedness under the
Senior Credit Facility is outstanding or any lender has any commitment to extend
credit to the Company thereunder, the Senior Debt Incurred under the Senior
Credit Facility and (ii) so long as outstanding, any other Senior Debt which has
at the time of initial issuance an aggregate outstanding principal amount in
excess of $10.0 million which has been so designated as Designated Senior Debt
by the Board of Directors of the Company at the time of initial issuance in a
resolution delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final maturity of the Securities.
"DTC" means The Depository Trust Company or its successors.
"Equity Offering" means an underwritten public offering of Common Stock of
the Company pursuant to an effective registration statement filed under the
Securities Act (excluding any registration statements filed on Form S-8 or any
successor form).
"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels
Office) as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Exchange Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such asset) which could be
negotiated in an arm's-length transaction, for cash, between a willing seller
and a willing and able buyer, neither of which is under any compulsion to
complete the transaction; provided, however, that the Fair Market Value of any
such asset or assets shall be determined conclusively (i) for any determination
pursuant to the covenant described under Section 4.05 or 4.06 by the Board of
Directors of the Company acting in good faith, which determination shall be
evidenced by a resolution of such Board delivered to the Trustee, and (ii) for
any other determination by an officer of the Company acting in good faith.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary whose
jurisdiction of incorporation or formation is other than the United States, any
state thereof or the District of Columbia or Canada or any province or territory
thereof.
"GAAP" means generally accepted accounting principles, consistently
applied, as in effect on the Issue Date in the United States of America, as 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 is approved by a significant segment of the
accounting profession in the United States.
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"Guarantee" means the guarantee of the Notes by each Guarantor under this
Indenture.
"Guarantor" means (i) each Restricted Subsidiary that, on the Issue Date,
is a direct or indirect obligor under, or in respect of, the Senior Credit
Facility and (ii) each Restricted Subsidiary that pursuant to the terms of this
Indenture executes a supplement to this Indenture as a Guarantor, in each case,
until such Restricted Subsidiary is released from its Guarantee.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary (or is merged into or consolidates with the Company or any Restricted
Subsidiary), whether or not such Indebtedness was incurred in connection with,
or in contemplation of, such Person becoming a Restricted Subsidiary (or being
merged into or consolidated with the Company or any Restricted Subsidiary),
shall be deemed Incurred at the time any such Person becomes a Restricted
Subsidiary or merges into or consolidates with the Company or any Restricted
Subsidiary.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not overdue or
which are being contested in good faith), (v) every Capital Lease Obligation of
such Person, (vi) every net obligation under interest rate swap or similar
agreements or Currency Agreements of such Person, (vii) Attributable
Indebtedness and (viii) every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is responsible
or liable for, directly or indirectly, as obligor, guarantor or otherwise.
Indebtedness shall include the liquidation preference and any mandatory
redemption payment obligations in respect of any Disqualified Stock of the
Company, and any Preferred Stock of a Subsidiary of the Company. Indebtedness
shall never be calculated taking into account any cash and cash equivalents held
by such Person. Indebtedness shall not include obligations arising from
agreements of the Company or a Restricted Subsidiary to provide for
indemnification, adjustment of purchase price, earn-out, or other similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business or assets of a Restricted Subsidiary.
"Indenture" means this Indenture as amended or supplemented from time to
time in accordance with its terms.
"Initial Global Securities" means the Regulation S Global Security and the
144A Global Security, each of which contains a Securities Act Legend.
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"Initial Securities" means the Securities containing a Securities Act
Legend.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D promulgated under the Securities Act.
"interest" means, with respect to the Securities, the sum of any cash
interest and any Additional Interest on the Securities.
"Interest Payment Date" has the meaning given to such term in the
Securities.
"Interest Rate Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against, or to expose
such Person to, fluctuations in interest rates.
"Investment" by any Person means any direct or indirect loan, advance,
guarantee or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Indebtedness issued by any other Person. For purposes of Section
4.06, the amount of any investment shall be the original cost of such
investment, plus the cost of all additions thereto, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such investment.
"Issue Date" means November 19, 1997, the original issue date of the
Securities.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien, charge,
easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security agreement
with respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Material Subsidiary" means, at any date of determination, (a) any
Restricted Subsidiary that, together with its Subsidiaries that constitute
Restricted Subsidiaries (i) for the most recent fiscal year of the Company
accounted for more than 10.0% of the consolidated revenues of the Company and
the Restricted Subsidiaries or (ii) as of the end of such fiscal year, owned
more than 10.0% of the consolidated assets of the Company and the Restricted
Subsidiaries, all as set forth on the consolidated financial statements of the
Company and the Restricted Subsidiaries for such year prepared in conformity
with GAAP, and (b) any Restricted Subsidiary which, when aggregated with all
other Restricted Subsidiaries that are not otherwise Material Subsidiaries and
as to which any event described in Section 6.01(h) or (i) has occurred, would
constitute a Material Subsidiary under clause (a) of this definition.
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquirer of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the monetization
or other disposition of any non-cash consideration (including notes or other
securities) received in connection with such Asset Disposition, net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
7
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incurred and all federal, state, foreign and local taxes required to be accrued
as a liability as a consequence of such Asset Disposition, (ii) all payments
made by such Person or any of its Restricted Subsidiaries on any Indebtedness
which is secured by such assets in accordance with the terms of any Lien upon or
with respect to such assets or which must by the terms of such Lien, or in order
to obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iii) all payments made
with respect to liabilities associated with the assets which are the subject of
the Asset Disposition, including, without limitation, trade payables and other
accrued liabilities, (iv) appropriate amounts to be provided by such Person or
any Restricted Subsidiary thereof, as the case may be, as a reserve in
accordance with GAAP against any liabilities associated with such assets and
retained by such Person or any Restricted Subsidiary thereof, as the case may
be, after such Asset Disposition, including, without limitation, liabilities
under any indemnification obligations and severance and other employee
termination costs associated with such Asset Disposition, until such time as
such amounts are no longer reserved or such reserve is no longer necessary (at
which time any remaining amounts will become Net Available Proceeds to be
allocated in accordance with the provisions of clause (iii) of Section 4.05) and
(v) all distributions and other payments made to minority interest holders in
Restricted Subsidiaries of such Person or joint ventures as a result of such
Asset Disposition.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments made in any Unrestricted Subsidiary or joint venture by the Company
or any Restricted Subsidiary on or after the Issue Date (in the case of an
Investment made other than in cash, the amount shall be the fair market value of
such Investment as determined in good faith by the Board of Directors of the
Company or such Restricted Subsidiary) over (ii) the aggregate amount returned
in cash on or with respect to such Investments whether through interest
payments, principal payments, dividends or other distributions or payments;
provided, however, that such payments or distributions shall not be (and have
not been) included in subclause (c) of clause (3) of Section 4.06; provided,
further, that with respect to all Investments made in any Unrestricted
Subsidiary or joint venture the amounts referred to in clause (ii) above with
respect to such Investments shall not exceed the aggregate amount of all such
Investments made in such Unrestricted Subsidiary or joint venture.
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each holder at his address appearing in
the register for the Securities on the date of the Offer offering to purchase up
to the principal amount of Securities specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to this Indenture).
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the "Expiration Date") of the Offer to Purchase which shall be
not less than 30 days nor more than 60 days after the date of such Offer and a
settlement date (the "Purchase Date") for purchase of Securities within five
Business Days after the Expiration Date. The Company shall notify the Trustee
at least 15 Business Days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company.
The Offer shall contain all the information required by applicable law to be
included therein. The Offer shall contain all instructions and materials
necessary to enable such holders to tender Securities pursuant to the Offer to
Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to Purchase
is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Securities offered to
be purchased by the Company pursuant to the Offer to Purchase (including, if
less than 100%, the manner by which such amount has been determined pursuant to
the Section of the Indenture requiring the Offer to Purchase) (the "Purchase
Amount");
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(4) the purchase price to be paid by the Company for each $1,000 aggregate
principal amount of Securities accepted for payment (as specified pursuant to
this Indenture) (the "Purchase Price");
(5) that the holder may tender all or any portion of the Securities
registered in the name of such holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal amount;
(6) the place or places where Securities are to be surrendered for tender
pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(9) that each holder electing to tender all or any portion of a Security
pursuant to the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of business on the
Expiration Date (such Security being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder thereof
or his attorney duly authorized in writing);
(10) that holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not later
than the close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the holder, the principal amount of the Security the holder
tendered, the certificate number of the Security the holder tendered and a
statement that such holder is withdrawing all or a portion of his tender;
(11) that (a) if Securities in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the
Offer to Purchase, the Company shall purchase all such Securities and (b) if
Securities in an aggregate principal amount in excess of the Purchase Amount are
tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall
purchase Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed appropriate
so that only Securities in denominations of $1,000 or integral multiples thereof
shall be purchased); and
(12) that in the case of any holder whose Security is purchased only in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such holder, in an
aggregate principal amount equal to and in exchange for the unpurchased portion
of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance with
the provisions above pertaining to any Offer.
"Officer" means the Chairman of the Board, the Chief Executive Officer, any
Executive Vice President, any Senior Vice President, the Chief Financial
Officer, the Treasurer, or the Secretary of the Company.
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"Officers' Certificate" means a certificate, signed by two Officers (at
least one of whom shall be the Chief Financial Officer or Senior Vice
President-Finance of the Company) or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company, complying with Sections 13.04 and 13.05.
"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.
"Pari Passu Indebtedness" means Indebtedness of the Company ranked pari
passu in right of payment with the Securities.
"Participant" means any Person who has an account with DTC.
"Permitted Holder" means (i) J. Brendan Barba, his spouse and lineal
descendants and trusts for the exclusive benefit of any of the foregoing
persons; (ii) Borden, Inc. and its Affiliates and (iii) Kohlberg Kravis Roberts
& Co. and its Affiliates.
"Permitted Investments" means (i) Investments in Cash Equivalents; (ii)
Investments representing Capital Stock or obligations issued to the Company or
any Restricted Subsidiary in the course of the good faith settlement of claims
against any other Person or by reason of a composition or readjustment of debt
or a reorganization of any debtor of the Company or any Restricted Subsidiary;
(iii) deposits, including interest-bearing deposits, maintained in the ordinary
course of business in banks; (iv) any acquisition of the Capital Stock of any
Person; provided, however, that after giving effect to any such acquisition such
Person shall become a Restricted Subsidiary; (v) trade receivables and prepaid
expenses, in each case arising in the ordinary course of business; provided,
however, that such receivables and prepaid expenses would be recorded as assets
of such Person in accordance with GAAP; (vi) endorsements for collection or
deposit in the ordinary course of business by such Person of bank drafts and
similar negotiable instruments of such other Person received as payment for
ordinary course of business trade receivables; (vii) any interest rate
agreements or Currency Agreements with an unaffiliated Person otherwise
permitted by clause (iv) or (v) under Section 4.04; (viii) Investments received
as consideration for an Asset Disposition in compliance with Section 4.05;
(ix) loans or advances to employees of the Company or any Restricted Subsidiary
in an aggregate amount not to exceed $1.0 million at any one time outstanding;
(x) any Investment in the Company or any Restricted Subsidiary; (xi) any
Investment existing on the Issue Date; (xii) additional Investments having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (xii) that at the time outstanding, not to exceed $15.0
million; (xiii) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case incurred in the ordinary course of business; and (xiv) Investments the
payment for which consists of Capital Stock of the Company (exclusive of
Disqualified Stock); provided, however, that the issuance of such Capital Stock
is not included in the calculation set forth in clause (3) of the first
paragraph of Section 4.06.
"Permitted Junior Securities" means (i) Qualified Stock, (ii) securities of
the Company or any other corporation authorized by an order or decree giving
effect, and stating in such order or decree that effect is given, to the
subordination of such securities to the Senior Debt, and made by a court of
competent jurisdiction in a reorganization proceeding under any applicable
bankruptcy, insolvency or other similar law, or (iii) any securities of the
Company provided for by a plan of reorganization or readjustment that are
subordinated in right of payment to all Senior Debt that may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are subordinated as provided in this Indenture.
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"Person" means any individual, corporation, limited or general partnership,
joint venture, limited liability company, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Principal" of any Security means principal of, and premium, if any, with
respect to, such Security.
"Private Exchange Securities" has the meaning set forth in the Registration
Rights Agreement.
"Purchase Date" has the meaning set forth in the definition of "Offer to
Purchase."
"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary incurred for the purpose of financing all or any part of
the purchase price or the cost of installation, construction or improvement of
any property; provided, however, that the aggregate principal amount of such
Indebtedness does not exceed the lesser of (i) the fair market value of such
property and (ii) such purchase price or cost, as applicable, including any
refinancing of such Indebtedness that does not increase the aggregate principal
amount (or accreted amount, if less) thereof as of the date of refinancing.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
under Rule 144A under the Securities Act.
"Qualified Stock" means any Capital Stock of the Company other than
Disqualified Stock.
"Refinance" means refinance, renew, extend, replace or refund; and
"Refinancing" and "Refinanced" have correlative meanings.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the date hereof among the Company, J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated and Salomon Brothers Inc.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Physical Security" means a Physical Security containing, or
required to contain, a Securities Act Legend.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Restricted Subsidiary of the
Company of any real or tangible personal property, which
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property has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 9.875% Senior Subordinated Notes due 2007 issued
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Securities Payment" has the meaning set forth in Section 8.02.
"Security Payment" has the meaning set forth in Section 8.02.
"Senior Credit Facility" means the Credit Agreement, dated as of
October 11, 1996, among the Company, the Eligible Subsidiaries (as defined in
the Senior Credit Facility), Morgan Guaranty Trust Company of New York, as
Agent, and the lenders party thereto, including any deferrals, renewals,
extensions, replacements, Refinancings or refundings thereof, or amendments,
restatements, modifications or supplements thereto and any agreement providing
therefor whether by or with the same or any other lender, creditors, or group of
creditors and including related notes, guarantee agreements, security agreements
and other instruments and agreements executed in connection therewith.
"Senior Debt" means, with respect to any Person at any date, (i) in the
case of the Company or the Guarantor, all Indebtedness and other payment
obligations under the Senior Credit Facility, including principal, premium, if
any, and interest on such Indebtedness and all other amounts due on or in
connection with such Indebtedness including all charges, fees, expenses and
indemnity payments, (ii) all other Indebtedness of such Person for borrowed
money, including principal, premium, if any, and interest on such Indebtedness,
unless the instrument under which such Indebtedness for money borrowed is
created, incurred, assumed or guaranteed expressly provides that such
Indebtedness for money borrowed is not senior or superior in right of payment to
the Securities or the Guarantee, as the case may be, and all Refinancings or
modifications or amendments thereof and (iii) all interest on any Indebtedness
referred to in clauses (i) and (ii) accruing during or which would accrue but
for, the pendency of any bankruptcy or insolvency proceeding, whether or not
allowed or allowable thereunder. Notwithstanding the foregoing, Senior Debt
shall not include (a) Indebtedness which is pursuant to its terms or any
agreement relating thereto subordinated or junior in right of payment or
otherwise to any other Indebtedness of such Person; provided, however, that no
Indebtedness shall be deemed to be subordinate or junior in right of payment or
otherwise to any other Indebtedness of a Person solely by reason of such other
Indebtedness being secured and such Indebtedness not being secured, (b) the
Securities, (c) any Indebtedness of such Person to any of its Subsidiaries,
(d) Indebtedness Incurred in violation of the provisions of Section 4.04 (but,
as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (d) if the holder(s) of such obligation or their
representative and the Trustee shall have received an Opinion of Counsel (which
legal counsel may, as to matters of fact, rely upon 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 the provisions of Section 4.04) and
(e) any Indebtedness which, when incurred and without respect to any election
under Section 1111(b) of the Bankruptcy Code, is without recourse to the
Company.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
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"Similar Business" means any business related, ancillary or complementary
(as determined in good faith by the Board of Directors) to the business of the
Company and the Restricted Subsidiaries on the Issue Date.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Guarantor (whether outstanding on the date hereof or hereafter Incurred) which
is by its terms expressly subordinate or junior in right of payment to the
Securities or the Guarantee of such Guarantor, as the case may be.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more other Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and voting power relating to the
policies, management and affairs thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as in effect on the date of this Indenture, except as provided in
Section 10.03.
"Trust Officer" means any officer within the corporate trust department (or
any successor group) of the Trustee including any vice president, assistant vice
president, assistant secretary, treasurer or assistant treasurer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such trust matter is referred because of his knowledge
of and familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Unrestricted Global Securities" means one or more Global Securities that
do not and are not required to bear the Securities Act Legend.
"Unrestricted Physical Securities" means one or more Physical Securities
that do not and are not required to bear the Securities Act Legend.
"Unrestricted Securities" means the Securities that do not and are not
required to bear the Securities Act Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination is designated an Unrestricted Subsidiary by the Board
of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. Any such designation by the Board of Directors will be
evidenced to the Trustee by promptly filing with the Trustee a copy of the board
resolution giving effect to such designation and an officers' certificate
certifying that such designation complied with the foregoing provisions. The
Board of Directors of the Company shall not designate any Subsidiary of the
Company to be an Unrestricted Subsidiary (a) unless such designation is made in
accordance with Section 4.05 and (b) if, after such designation, (i) the Company
or any other Restricted Subsidiary (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
contingently liable for any Indebtedness of such Subsidiary, (ii) a default with
respect to any Indebtedness of such Subsidiary (including the exercise of any
right which the holders thereof may have to take en-
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forcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity or (iii) 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. The Board of
Directors may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that (a) no Default shall have occurred and be
continuing and (b) all Indebtedness of such Unrestricted Subsidiary and all
Liens on any asset of such Unrestricted Subsidiary outstanding immediately
following such redesignation would, if Incurred at such time, be permitted to
be Incurred under this Indenture.
"Voting Stock" of any Person means the Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly Owned Subsidiary" means a Restricted Subsidiary, all of the
outstanding Capital Stock or other ownership interests of which (other than
directors' qualifying shares) shall at the time be owned by the Company and/or
by one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Term Defined in Section
----- ------------------
Bankruptcy Law 6.01
Change of Control 4.14
Custodian 6.01
Event of Default 6.01
Funding Guarantor 11.05
Global Security 2.01(a)
Guarantor Blockage Period 12.02(a)
Guarantor Payment Blockage Notice 12.02(a)
144A Global Security 2.01(a)
Paying Agent 2.03
Payment Blockage Notice 8.02(a)
Payment Blockage Period 8.02(a)
Physical Security 2.01(b)
Registrar 2.03
Regulation S Global Security 2.01(a)
Required Filing Date 4.12
Securities Act Legend 2.06(f)
United States Government Obligation 9.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
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"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the 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 therein.
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 generally accepted accounting principles in effect
from time to time, and any other reference in this Indenture to "generally
accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) Section and Article references are to sections and articles of
this Indenture;
(6) provisions apply to successive events and transactions; and
(7) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
(a) Global Securities. Securities offered and sold to QIBs in reliance on
Rule 144A shall be issued initially substantially in the form of Exhibit A
hereto in the name of Cede & Co. as nominee of DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. Such Security shall
be referred to herein as the "144A Global Security." Securities offered and
sold in reliance on Regulation S shall be issued initially substantially in the
form of Exhibit A hereto in the name of Cede & Co. as nominee of DTC, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. Such Security shall be referred
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to herein as the "Regulation S Global Security." Unrestricted Global
Securities shall be issued initially in accordance with Sections 2.06(b)(iv),
2.06(c)(ii) and 2.06(e) in the name of Cede & Co. as nominee of DTC, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The 144A Global Security, Regulation S Global Security and
Unrestricted Global Security are collectively referred to herein as the
"Global Securities." The aggregate principal amount of each of the Global
Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee as hereinafter provided.
Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Securities from time to time endorsed
thereon and that the aggregate principal amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and transfers of interests
therein in accordance with the terms of this Indenture. Any endorsement of a
Global Security to reflect the amount of any increase or decrease in the
principal amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.06.
Upon the issuance of the Global Security to DTC, DTC shall credit, on its
internal book-entry registration and transfer system, its Participants' accounts
with the respective interests owned by such Participants. Interests in the
Global Securities shall be limited to Participants, including Euroclear and
Cedel, and indirect Participants.
The Participants shall not have any rights either under this Indenture or
under any Global Security with respect to such Global Security held on their
behalf by DTC, and DTC may be treated by the Company, the Trustee and any agent
of the Company or the Trustee as the absolute owner of such Global Security for
the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on the Global Securities
and for all other purposes. 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 DTC or impair, as between DTC and its Participants, the operation
of customary practices of DTC governing the exercise of the rights of an owner
of a beneficial interest in any Global Security.
The provisions of the "Operating Procedures of the Euroclear System,"
"Terms and Conditions Governing Use of Euroclear," the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel, and successor
provisions, shall be applicable to interests in the Regulation S Global Security
that are held by the Participants through Euroclear or Cedel.
(b) Physical Securities. Securities offered and sold to Institutional
Accredited Investors who are not also QIBs shall be issued substantially in the
form of Exhibit A hereto, in certificated form and issued in the names of the
purchasers thereof (or their nominees), duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Securities in
certificated form shall be referred to herein as the "Physical Securities."
(c) Securities. The provisions of the form of Securities contained in
Exhibit A hereto are incorporated herein by reference. The Securities and the
Trustee's Certificates of Authentication shall be substantially in the form of
Exhibit A hereto. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Company shall approve the
form of the Securities and any notation, legend or endorsement (including
notations relating to the Guarantee) on them. If required, the Securities shall
bear the appropriate legend regarding original issue discount for federal income
tax purposes. Each Security shall be dated
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the date of its authentication. The terms and provisions contained in the
Securities shall constitute, and are hereby expressly made, a part of this
Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers of the Company shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Securities for original issue in
the aggregate principal amount of up to $200,000,000 in one or more series,
(ii) Private Exchange Securities from time to time only in exchange for a like
principal amount of Initial Global Securities and (iii) Unrestricted Securities
from time to time only (x) in exchange for a like principal amount of Initial
Securities or (y) in an aggregate principal amount of not more than the excess
of $200,000,000 over the sum of the aggregate principal amount of (A) Initial
Securities then outstanding, (B) Private Exchange Securities then outstanding
and (C) Unrestricted Securities issued in accordance with clause (iii), in each
case upon a written order signed by an Officer of the Company. The order shall
specify the amount of Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated. The order shall also
provide instructions concerning registration, amounts for each Holder and
delivery. The aggregate principal amount of Securities outstanding at any time
may not exceed $200,000,000 except as provided in Section 2.07. The Securities
shall be issued only in registered form, without coupons and only in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("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 Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent and shall, if required, incorporate the
provisions of the TIA. The Company shall notify the Trustee in writing 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 in accordance with the provisions of Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying Agent.
The Company shall give written notice to the Trustee in the event that the
Company decides to act as Registrar. None of the Company, its Subsidiaries or
any of their Affiliates may act as Paying Agent.
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SECTION 2.04. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in writing to hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities
(whether such money has been paid to it by the Company or any other obligor on
the Securities), and the Company and the Paying Agent shall each notify the
Trustee in writing of any default by the Company (or any other obligor on the
Securities) in making any such payment. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon making such payment the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. Transfer of the Global
Securities shall be by delivery. Global Securities will be exchanged by the
Company for Physical Securities only (i) if DTC notifies the Company that it is
unwilling or unable to continue to act as depositary with respect to the Global
Securities or ceases to be a clearing agency registered under the Exchange Act
and, in either case, a successor depositary registered as a clearing agency
under the Exchange Act is not appointed by the Company within 120 days, (ii) at
any time if the Company in its sole discretion determines that the Global
Securities (in whole but not in part) should be exchanged for Physical
Securities or (iii) if the owner of an interest in the Global Securities
requests such Physical Securities, following an Event of Default under the
Indenture, in a writing delivered through DTC to the Trustee.
Upon the occurrence of any of the events specified in the previous
paragraph, Physical Securities shall be issued in such names as DTC shall
instruct the Trustee in writing and the Trustee shall cause the aggregate
principal amount of the applicable Global Security to be reduced accordingly and
direct DTC to make a corresponding reduction in its book-entry system. The
Company shall execute and the Trustee shall authenticate and make available for
delivery to the Person designated in the instructions a Physical Security in the
appropriate principal amount. The Trustee shall make available for delivery
such Physical Securities to the Persons in whose names such Securities are so
registered. Physical Securities issued in exchange for an Initial Global
Security pursuant to this Section 2.06(a) shall bear the Securities Act Legend
and shall be subject to all restrictions on transfer contained therein. Global
Securities may also be exchanged or replaced, in whole or in part, as provided
in Sections 2.07 and 2.10. Every Security authenticated and made available for
delivery in exchange for, or in lieu of, a Global Security or any portion
thereof, pursuant to Section 2.07 or 2.10, shall be authenticated and made
available for delivery in the form of, and shall be, a Global Security. A
Global Security may not be exchanged for another Security other than as provided
in this Section 2.06(a).
(b) Transfer and Exchange of Interests in Global Securities. The
transfer and exchange of interests in Global Securities shall be effected
through DTC, in accordance with this Indenture and the procedures of DTC
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therefor. Interests in Initial Global Securities shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. The Trustee shall have no obligation to
ascertain DTC's compliance with any such restrictions on transfer. Transfers
of interests in Global Securities shall also require compliance with
subparagraph (i) below, as well as one or more of the other following
subparagraphs as applicable:
(i) All Transfers and Exchanges of Interests in Global Securities.
In connection with all transfers and exchanges of interests in Global
Securities (other than transfers of interests in a Global Security to
Persons who take delivery thereof in the form of an interest in the same
Global Security), the transferor of such interest must deliver to the
Registrar (1) instructions given in accordance with the Applicable
Procedures from a Participant or an indirect Participant directing DTC to
credit or cause to be credited an interest in the specified Global Security
in an amount equal to the interest to be transferred or exchanged, (2) a
written order given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase and (3) instructions given by the Holder of the Global Security to
effect the transfer referred to in (1) and (2) above.
(ii) Transfer of Interests in the Same Initial Global Security.
Interests in any Initial Global Security may be transferred to Persons who
take delivery thereof in the form of an interest in the same Initial Global
Security in accordance with the transfer restrictions set forth in Section
2.06(f) hereof.
(iii) Transfer of Interests to Another Initial Global Security.
Interests in any Initial Global Security may be transferred to Persons who
take delivery thereof in the form of an interest in another Initial Global
Security if the Registrar receives the following:
(A) if the transferee will take delivery in the form of an
interest in the 144A Global Security, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the
certifications in item 1 thereof; or
(B) if the transferee will take delivery in the form of an
interest in the Regulation S Global Security, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item 2 thereof.
(iv) Transfer and Exchange of Interests in Initial Global Security for
Interests in an Unrestricted Global Security. Interests in any Initial
Global Security may be exchanged by the holder thereof for an interest in
the Unrestricted Global Security or transferred to a Person who takes
delivery thereof in the form of an interest in the Unrestricted Global
Security if:
(A) such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement; or
(C) the Registrar receives the following:
(1) if the holder of such an interest in an Initial Global
Security proposes to exchange it for an interest in the
Unrestricted Global Security, a certificate
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from such Holder in the form of Exhibit C hereto, including the
certifications in item 1(a) thereof;
(2) if the holder of such an interest in an Initial Global
Security proposes to transfer it to a Person who shall take
delivery thereof in the form of an interest in an Unrestricted
Global Security, a certificate in the form of Exhibit B hereto,
including the certification in item 4 thereof; and
(3) in each such case set forth in this paragraph (C), an
Opinion of Counsel in form reasonably acceptable to the Company,
to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in Section 2.06(f) hereof are not required
in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to paragraph (B) above at a time
when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02, the Trustee shall authenticate one or more Unrestricted
Global Securities in an aggregate principal amount equal to the principal
amount of interests in the Initial Global Security transferred pursuant to
paragraph (B) above.
(v) Notation by the Trustee of Transfer of Interests Among Global
Securities. Upon satisfaction of the requirements for transfer of
interests in Global Securities pursuant to clauses (iii) or (iv) above, the
Trustee, as Registrar, shall reduce or cause to be reduced the aggregate
principal amount of the relevant Global Security from which the interests
are being transferred, and increase or cause to be increased the aggregate
principal amount of the Global Security to which the interests are being
transferred, in each case, by the principal amount so transferred and shall
direct DTC to make corresponding adjustments in its book-entry system. No
transfer of interests of a Global Security shall be effected until, and any
transferee pursuant thereto shall succeed to the rights of a holder of such
interests only when, the Registrar has made appropriate adjustments to the
applicable Global Security in accordance with this paragraph.
(c) Transfer or Exchange of Physical Securities for Interests in a Global
Security.
(i) If any Holder of Physical Securities required to contain the
Securities Act Legend proposes to exchange such Securities for an interest
in a Global Security or to transfer such Physical Securities to a Person
who takes delivery thereof in the form of an interest in a Global Security,
then, upon receipt by the Registrar of the following documentation (all of
which may be submitted by facsimile):
(A) if the Holder of such Physical Registered Securities
proposes to exchange such Securities for an interest in an Initial
Global Security, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item 2 thereof;
(B) if such Physical Securities are being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item 1 thereof; or
(C) if such Physical Securities are being transferred to a
Non-U.S. Person (as defined in Regulation S) in an offshore
transaction in accordance with Rule 904 under the Secu-
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rities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item 2 thereof,
the Trustee shall cancel the Physical Securities, increase or cause to be
increased the aggregate principal amount of, in the case of clause (B)
above, the 144A Global Security, in the case of clause (C) above, the
Regulation S Global Security, and direct DTC to make a corresponding
increase in its book-entry system.
(ii) A Holder of Physical Securities required to contain the
Securities Act Legend may exchange such Securities for an interest in the
Unrestricted Global Security or transfer such Restricted Physical
Securities to a Person who takes delivery thereof in the form of an
interest in the Unrestricted Global Security only:
(A) if such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) upon receipt by the Registrar of the following documentation
(all of which may be submitted by facsimile):
(1) if the Holder of such Physical Securities proposes to
exchange such Securities for an interest in the Unrestricted
Global Security, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item 1(b)
thereof;
(2) if the Holder of such Registered Securities proposes to
transfer such Securities to a Person who shall take delivery
thereof in the form of an interest in the Unrestricted Global
Security, a certificate in the form of Exhibit B hereto,
including the certifications in item 4 thereof; and
(3) in each such case set forth in this paragraph (C), an
Opinion of Counsel in form reasonably acceptable to the Company,
to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in Section 2.06(f) hereof are not required
in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to paragraph (B) above
at a time when an Unrestricted Global Security has not yet been
issued, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02, the Trustee shall authenticate
one or more Unrestricted Global Securities in an aggregate principal
amount equal to the principal amount of Physical Securities
transferred pursuant to paragraph (B) above.
(d) Transfer and Exchange of Physical Securities.
(i) Transfer of a Physical Security to Another Physical Security.
Following the occurrence of one or more of the events specified in Section
2.06(a), a Physical Security may be transferred to Persons
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who take delivery thereof in the form of another Physical Security if the
Registrar receives the following:
(A) if the transfer is being effected pursuant to and in
accordance with Rule 144A, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item 3(a) thereof; or
(B) if the transfer is being effected pursuant to and in
accordance with Regulation S, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item 3(b) thereof.
(ii) Transfer and Exchange of Restricted Physical Securities for
Unrestricted Physical Securities. Following the occurrence of one or more
of the events specified in Section 2.06(a), a Restricted Physical Security
may be exchanged by the Holder thereof for an Unrestricted Physical
Security or transferred to a Person who takes delivery thereof in the form
of an Unrestricted Physical Security if:
(A) such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement; or
(C) the Registrar receives a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item 1(c)
thereof and an Opinion of Counsel in form reasonably acceptable to the
Company, to the effect that such exchange or transfer is in compliance
with the Securities Act and, that the restrictions on transfer
contained herein and in Section 2.06(f) hereof are not required in
order to maintain compliance with the Securities Act.
(iii) Exchange of Physical Securities. When Physical Securities
are presented by a Holder to the Registrar with a request to register the
exchange of such Physical Securities for an equal principal amount of
Physical Securities of other authorized denominations, the Registrar shall
make the exchange as requested only if the Physical Securities are endorsed
or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by such Holder or by his attorney duly
authorized in writing and shall be issued only in the name of such Holder
or its nominee. The Physical Securities issued in exchange for Physical
Securities shall bear the Securities Act Legend and shall be subject to all
restrictions on transfer contained herein in each case to the same extent
as the Physical Securities so exchanged.
(iv) Return of Physical Securities. In the event of a transfer
pursuant to clauses (i) or (ii) above and the Holder thereof has delivered
certificates representing an aggregate principal amount of Securities in
excess of that to be transferred, the Company shall execute and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security, without service charge, a new Physical Security or Securities of
any authorized denomination requested by the Holder, in an aggregate
principal amount equal to the portion of the Security not so transferred.
(e) Exchange Offer. Upon the occurrence of the Exchange Offer (as
defined in the Registration Rights Agreement) in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of
an authentication order in accordance with Section 2.02, the Trustee shall
authenticate one or more Unrestricted
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Global Securities in an aggregate principal amount equal to the principal
amount of the interests in the Initial Global Securities tendered for
acceptance (and not withdrawn) by persons participating therein.
Concurrently with the issuance of such Securities, the Trustee shall cause
the aggregate principal amount of the applicable Initial Global Securities to
be reduced accordingly and direct DTC to make a corresponding reduction in
its book-entry system. The Trustee shall cancel any Restricted Physical
Certificates in accordance with Section 2.11 hereof.
In the case that one or more of the events specified in Section 2.06(a)
have occurred, upon the occurrence of such Exchange Offer, the Company shall
issue and, upon receipt of an authentication order in accordance with Section
2.02, the Trustee shall authenticate Unrestricted Physical Securities in an
aggregate principal amount equal to the principal amount of the Restricted
Physical Securities tendered for acceptance by persons participating therein.
(f) Legends. Each Initial Global Security and each Restricted Physical
Security shall bear the legend (the "Securities Act Legend") in substantially
the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE REOFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT OR (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(g) Global Security Legend. Each Global Security shall bear a legend in
substantially the following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO A NOMINEE OF DTC, OR BY ANY SUCH NOMINEE OF DTC, OR BY
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DTC TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
"TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE INDENTURE."
(h) Cancellation and/or Adjustment of Global Securities. At such time as
all interests in the Global Securities have been exchanged for Physical
Securities, all Global Securities shall be returned to or retained and canceled
by the Trustee in accordance with Section 2.11 hereof. At any time prior to
such cancellation, if any interest in a Global Security is exchanged for an
interest in another Global Security or for Physical Securities, the principal
amount of Securities represented by such Global Security shall be reduced
accordingly and an endorsement shall be made on such Global Security, by the
Trustee to reflect such reduction.
(i) General Provisions Relating to All Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Securities and
Physical Securities upon a written order signed by an Officer of the
Company or at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any stamp or transfer tax or similar governmental
charge payable in connection therewith (other than any such stamp or
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.05, 4.14 and 10.05 hereof).
(iii) All Global Securities and Physical Securities issued upon
any registration of transfer or exchange of Global Securities or Physical
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Global Securities or Physical Securities surrendered upon such registration
of transfer or exchange.
(iv) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Securities during a period beginning at the
opening of 15 Business Days before the day of any mailing of notice of
redemption of Securities under Section 3.02 and ending at the close of
business on the day of such mailing, (B) to register the transfer of or to
exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or
(C) to reg-
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ister the transfer of or to exchange a Security between a record
date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer of
any Security, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and
interest on such Securities and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vi) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfers of any interest in any Security (including any transfers between
or among Participants or beneficial owners of interests in any Global
Security) or Physical Security other than to require delivery of such
certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. The Holder shall provide an
indemnity bond in an amount sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced may be required by the Trustee or
the Company. The Company and the Trustee each may charge such Holder for its
expenses in replacing such Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities that have been
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or Maturity Date money
sufficient to pay the principal of, and interest on Securities payable on that
date, then on and after that date such Securities cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Subsidiary or any of their respective Affiliates shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected
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in relying on any such direction, waiver or consent, only Securities that the
Trustee actually knows are so owned shall be so disregarded.
The Trustee may require an Officers' Certificate listing securities owned
by the Company, any Subsidiary or any of their respective Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee and no one else shall cancel all Securities surrendered for transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace, reissue or resell Securities which the Company has redeemed, paid,
purchased on the open market or otherwise, or otherwise acquired or have been
delivered to the Trustee for cancellation. The Trustee (subject to the
record-retention requirements of the Exchange Act) may, but shall not be
required to, destroy canceled Securities.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus any interest payable on the defaulted
interest pursuant to Section 4.01 hereof, to the persons who are Securityholders
on a subsequent special record date, and such term, as used in this Section 2.12
with respect to the payment of any defaulted interest, shall mean the fifteenth
day next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 30 days before
such special record date, the Company shall mail to each Securityholder and to
the Trustee a notice that states such special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP or CINS Number.
The Company in issuing the Securities may use a "CUSIP" or "CINS" number,
and if so, such CUSIP or CINS number shall be included in notices of redemption
or exchange as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP or CINS number printed in the notice or on the Securities, and that
reliance may be placed only on the other identification numbers printed on the
Securities. The Company will promptly notify the Trustee of any change in the
CUSIP or CINS number.
SECTION 2.14. Payments of Interest.
(a) The Holder of a Physical Security at the close of business on the
regular record date with respect to any Interest Payment Date shall be entitled
to receive the interest payable on such Interest Payment Date not-
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withstanding any transfer or exchange of such Physical Security subsequent to
the regular record date and prior to such Interest Payment Date, except if
and to the extent the Company shall default in the payment of the interest
due on such Interest Payment Date, in which case such defaulted interest
shall be paid in accordance with Section 2.12; and in the event of an
exchange of a Physical Security for a beneficial interest in any Global
Security subsequent to a regular record date or any special record date and
prior to or on the related Interest Payment Date or other payment date under
Section 2.12, any payment of the interest payable on such payment date with
respect to any such Physical Security shall be made to the Person in whose
name such Physical Security was registered on such record date. Payments of
interest on the Global Securities will be made on each Interest Payment Date
to the Holder of the Global Security on the record date with respect thereto;
provided, however, that, in the event of an exchange of all or a portion of a
Global Security for a Physical Security subsequent to the regular record date
or any special record date and prior to or on the related Interest Payment
Date or other payment date under Section 2.12, any payment of interest
payable on such Interest Payment Date or other payment date with respect to
the Physical Security shall be made to the Holder of the Global Security as
of the applicable record date. (b) Subject to Section 4.01, interest
shall be paid to DTC, with respect to any Global Security held by DTC, on the
applicable Interest Payment Date in accordance with instructions received
from DTC at least five Business Days before the applicable Interest Payment
Date.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to paragraph 5 of the
Securities at the applicable redemption price set forth thereon, it shall notify
the Trustee in writing of the redemption date and the principal amount of
Securities to be redeemed.
The Company shall give the notice provided for in this Section 3.01 at
least 45 days before the redemption date (unless a shorter notice shall be
agreed to by the Trustee in writing) but not more than 60 days before the
redemption date, together with an Officers' Certificate stating that such
redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to paragraph
5 thereof, the Trustee shall select the Securities to be redeemed pro rata or by
lot or in such other manner as the Trustee shall deem appropriate and fair. The
Trustee shall make the selection from the Securities then outstanding, subject
to redemption and not previously called for redemption. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption.
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SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first class mail to each Holder
whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the CUSIP number (subject to Section 2.13);
(4) the name and address of the Paying Agent to which the Securities
are to be surrendered for redemption;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date and the only remaining right of the Holders
is to receive payment of the redemption price upon surrender to the Paying
Agent; and
(7) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued.
At the Company's request, the Trustee shall give the notice of redemption
on behalf of the Company, in the Company's name and at the Company's expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price, plus accrued interest thereon to the redemption date, but interest
installments whose maturity is on or prior to such redemption date shall be
payable to the Holders of record at the close of business on the relevant record
dates referred to in the Securities. The Trustee shall not be required to (i)
issue, authenticate, register the transfer of or exchange any Security during a
period beginning 15 days before the date a notice of redemption is mailed and
ending at the close of business on the date the redemption notice is mailed, or
(ii) register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m. on the redemption date, the Company shall deposit with
the Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other
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than Securities or portions thereof called for redemption on that date which
have been delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities in
the manner provided in the Securities. An installment of principal or interest
shall be considered paid on the date due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay the installment in full and
is not prohibited from paying such money to the Holders of the Securities
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the same rate per
annum borne by the Securities. The Company shall pay interest on overdue
installments of interest at the same rate per annum borne by the Securities, to
the extent lawful.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the 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 or served at the
address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the principal Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. Limitation on Transactions with Affiliates.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, enter into any transaction with any of
their respective Affiliates (other than the Company or a Wholly
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Owned Subsidiary), including, without limitation, the purchase, sale, lease
or exchange of property, the rendering of any service, or the making of any
guarantee, loan, advance or Investment, either directly or indirectly, unless
the terms of such transaction are at least as favorable as the terms that
could be obtained at such time by the Company or such Restricted Subsidiary,
as the case may be, in a comparable transaction made on an arms-length basis
with a Person that is not such an Affiliate; provided, however, that (x) in
any transaction involving aggregate consideration in excess of $5.0 million,
the Company shall deliver an officer's certificate to the Trustee stating
that a majority of the disinterested directors of the Board of Directors of
the Company have determined, in their good faith judgment, that the terms of
such transaction are at least as favorable as the terms that could be
obtained by the Company or such Restricted Subsidiary, as the case may be, in
a comparable transaction made on an arms-length basis between unaffiliated
parties and (y), if the aggregate consideration is in excess of $10.0
million, the Company shall also obtain, prior to the consummation of the
transaction, the favorable opinion of a nationally recognized accounting,
appraisal or investment banking firm as to the fairness of the transaction to
the Company or such Restricted Subsidiary, from a financial point of view.
The provisions of this covenant shall not apply to (i) transactions permitted
by the provisions of Section 4.06; (ii) reasonable fees and compensation paid
to, and indemnity provided on behalf of, officers, directors and employees of
the Company and the Restricted Subsidiaries as determined in good faith by
the Board of Directors of the Company; (iii) loans or advances to employees
or consultants which are approved by a majority of the Board of Directors of
the Company in good faith; (iv) transactions made in accordance with
agreements in existence on the Issue Date (including pursuant to any
amendment thereto; provided, however, that any such amendment is not more
disadvantageous to the Holders in any material respect); and (v) transactions
with customers, clients, suppliers, or purchasers or sellers of goods or
services, in each case in the ordinary course of business and otherwise in
compliance with the terms of the Indenture which in the reasonable
determination of a majority of the members of the Board of Directors of the
Company or the senior management thereof are fair to the Company or its
Restricted Subsidiaries, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party.
SECTION 4.04. Limitation on Incurrence of Indebtedness.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness), except:
(i) Indebtedness of the Company and shares of Disqualified Stock of
the Company, if, immediately after giving effect to the Incurrence of such
Indebtedness or the issuance of such Disqualified Stock and the receipt and
application of the net proceeds thereof, the Consolidated Cash Flow Ratio
of the Company for the four full fiscal quarters for which quarterly or
annual financial statements are available next preceding the Incurrence of
such Indebtedness or the issuance of such Disqualified Stock would be
greater than 2.0 to 1.0;
(ii) Indebtedness (a) of the Company and the Restricted Subsidiaries
Incurred under the Senior Credit Facility in an aggregate principal amount
at any time outstanding not to exceed $250.0 million and (b) of any Foreign
Restricted Subsidiary Incurred under a working capital facility in an
aggregate amount not to exceed $100.0 million; provided, however, that the
Indebtedness is Incurred, denominated and payable in United States dollars
or the local currencies of the jurisdictions of the operations of the
Foreign Restricted Subsidiary Incurring such Indebtedness, less, in each
case, the amount of any repayments made pursuant to any scheduled
amortization or mandatory prepayments (to the extent, in the case of a
revolving credit facility, accompanied by a permanent commitment reduction
thereunder);
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(iii) Indebtedness owed by the Company to any Wholly Owned Subsidiary
or Indebtedness owed by a Restricted Subsidiary to the Company or a Wholly
Owned Subsidiary; provided, however, that upon either (I) the transfer or
other disposition by such Wholly Owned Subsidiary or the Company of any
Indebtedness so permitted under this clause (iii) to a Person other than
the Company or another Wholly Owned Subsidiary or (II) the issuance (other
than directors' qualifying shares), sale, transfer or other disposition of
shares of Capital Stock or other ownership interests (including by
consolidation or merger) of such Wholly Owned Subsidiary to a Person other
than the Company or another such Wholly Owned Subsidiary, the exception
provided by this clause (iii) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been Incurred at
the time of any such issuance, sale, transfer or other disposition, as the
case may be;
(iv) Indebtedness of the Company or any Restricted Subsidiary under
any interest rate agreement to the extent entered into to protect the
Company or such Restricted Subsidiary from fluctuations in interest rates
on any other Indebtedness permitted under the Indenture (including the
Securities); provided, however, that the notional amount of such interest
rate agreement does not exceed the principal amount of the Indebtedness to
which such interest rate agreement relates;
(v) Indebtedness of the Company or any Restricted Subsidiary under
Currency Agreements to the extent relating to Indebtedness of the Company
or any Restricted Subsidiary permitted to be Incurred under the Indenture;
provided, however, that such Currency Agreements do not increase the
Indebtedness or other obligations of the Company and the Restricted
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities or compensation
payable thereunder;
(vi) Indebtedness Incurred to Refinance any Indebtedness outstanding
on the Issue Date, any Indebtedness Incurred under the prior clause
(i) above or the Securities and the Guarantee; provided, however, that (I)
such Indebtedness does not exceed the principal amount (or accreted value,
if less) of the Indebtedness so Refinanced plus the amount of any premium
required to be paid in connection with such Refinancing pursuant to the
terms of the Indebtedness being Refinanced or the amount of any premium
reasonably determined by the issuer of such Indebtedness as necessary to
accomplish such Refinancing by means of a tender offer, exchange offer, or
privately negotiated repurchase, plus the expenses of such issuer
reasonably incurred in connection therewith and (II)(A) in the case of any
Refinancing of Indebtedness that is pari passu with the Securities, such
Refinancing Indebtedness is made pari passu with or subordinate in right of
payment to the Securities, and, in the case of any Refinancing of
Indebtedness that is subordinate in right of payment to the Securities,
such Refinancing Indebtedness is subordinate in right of payment to the
Securities on terms no less favorable to the Holders than those contained
in the Indebtedness being Refinanced, (B) in either case, the Refinancing
Indebtedness by its terms, or by the terms of any agreement or instrument
pursuant to which such Indebtedness is issued, does not have an Average
Life that is less than the remaining Average Life of the Indebtedness being
Refinanced and does not require redemption or other retirement (including
pursuant to any required offer to purchase to be made by the Company or a
Restricted Subsidiary) of such Indebtedness at the option of the holder
thereof prior to the final stated maturity of the Indebtedness being
Refinanced, other than a redemption or other retirement at the option of
the holder of such Indebtedness (including pursuant to a required offer to
purchase made by the Company or a Restricted Subsidiary) which is
conditioned upon a change of control of the Company pursuant to provisions
substantially similar to those contained in Section 4.14 and (C) any
Indebtedness Incurred to Refinance any Indebtedness is Incurred by the
obligor on the Indebtedness being Refinanced or by the Company;
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(vii) Indebtedness of the Company under the Exchange Securities
and Indebtedness of the Guarantors under the Guarantee incurred in
accordance with the Indenture;
(viii) Indebtedness of the Company not otherwise permitted to be
Incurred pursuant to clauses (i) through (vii) above which, together with
any other outstanding Indebtedness Incurred pursuant to this clause (viii),
has an aggregate principal amount not in excess of $20.0 million at any
time outstanding;
(ix) Indebtedness outstanding on the Issue Date;
(x) Purchase Money Indebtedness and Capital Lease Obligations in an
aggregate amount not to exceed $20.0 million at any one time outstanding;
(xi) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including without
limitation letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; provided, however, that
upon the drawing of such letters of credit or the Incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or Incurrence;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or the Capital
Stock of a Subsidiary, other than guarantees of Indebtedness incurred by
any Person acquiring all or any portion of such business, assets or the
Capital Stock of a Subsidiary for the purpose of financing such
acquisition; provided, however, that (i) such Indebtedness is not reflected
on the balance sheet of the Company or any Restricted Subsidiary
(contingent obligations referred to in a footnote to financial statements
and not otherwise reflected on the balance sheet will not be deemed to be
reflected on such balance sheet for purposes of this clause (i)) and (ii)
the maximum assumable liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds including noncash proceeds (the fair
market value of such noncash proceeds being measured at the time received
and without giving effect to any subsequent changes in value) actually
received by the Company and its Restricted Subsidiaries in connection with
such disposition;
(xiii) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business; and
(xiv) Indebtedness of the Company incurred under its swing line
credit facility with CoreStates Bank in an aggregate principal amount not
to exceed $10.0 million.
SECTION 4.05. Limitation on Certain Asset Dispositions.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, cause, make or suffer to exist an Asset Disposition, unless (x)
the Company, or its Restricted Subsidiaries, as the case may be, receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (as determined in good faith by the Company) of the assets or
Capital Stock issued or sold or otherwise disposed of and (y) at least 75% of
the proceeds from such Asset Disposition when received consists of either (I)
cash or Cash Equivalents or (II) property or assets that are used or useful in
the business of the Company or a Similar Busi-
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ness, or Capital Stock of any Person primarily engaged in a Similar Business
if, as a result of the acquisition by the Company or any Restricted
Subsidiary thereof, such Person becomes a Restricted Subsidiary; provided,
however, that the amount of any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Securities) that are assumed by the transferee of any
such assets pursuant to an agreement that releases the Company or Restricted
Subsidiary from further liability shall be deemed to be cash for the purposes
of this provision.
(b) Within 365 days after the Company's or any Restricted Subsidiary's
receipt of the Net Proceeds of any Asset Disposition, the Company or such
Restricted Subsidiary may apply the Net Available Proceeds from such Asset
Disposition to (i) repay Senior Debt and permanently reduce any related
commitment thereunder, (ii) an investment in property, capital expenditures or
assets that are used or useful in the business of the Company or a Similar
Business, or Capital Stock of any Person primarily engaged in a Similar Business
if, as a result of such acquisition by the Company or any Restricted Subsidiary,
such Person becomes a Restricted Subsidiary and/or (iii) an investment in
properties or assets that replace the properties or assets that are the subject
of such Asset Disposition.
(c) To the extent all or part of the Net Available Proceeds of any Asset
Disposition are not applied as described in clause (i) or (ii) of the
immediately preceding paragraph within the time periods set forth therein
(the "Net Proceeds Utilization Date") (such Net Available Proceeds, the
"Unutilized Net Available Proceeds"), the Company shall, within ten business
days after such Net Proceeds Utilization Date, make an Offer to Purchase all
outstanding Securities and Pari Passu Indebtedness, pro rata up to a maximum
principal amount (expressed as a multiple of $1,000) of Securities and Pari
Passu Indebtedness equal to such Unutilized Net Available Proceeds, at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the Purchase Date; provided,
however, that the Offer to Purchase may be deferred until there are aggregate
Unutilized Net Available Proceeds equal to or in excess of $15 million, at
which time the entire amount of such Unutilized Net Available Proceeds, and
not just the amount in excess of $15 million, shall be applied as required
pursuant to this paragraph. Pending the final application of any such Net
Available Proceeds, the Company or such Restricted Subsidiary may temporarily
reduce Indebtedness under a revolving credit facility, if any, or otherwise
invest such Net Available Proceeds in Cash Equivalents. To the extent that
the aggregate amount of Securities and Pari Passu Indebtedness tendered
pursuant to an Offer to Purchase is less than the Unutilized Net Available
Proceeds, the Company may use any remaining proceeds for general corporate
purposes. If the aggregate principal amount of Securities and Pari Passu
Indebtedness surrendered by Holders thereof exceeds the amount of Unutilized
Net Available Proceeds, the Trustee shall select the Securities to be
purchased in the manner described in the definition of Offer to Purchase.
Upon completion of any such Offer to Purchase, the amount of Unutilized Net
Available Proceeds shall be reset at zero. These provisions will not apply
to a transaction consummated in compliance with Article Five.
SECTION 4.06. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend, or make any distribution of any kind
or character (whether in cash, property or securities), in respect of any class
of Capital Stock of the Company or any Restricted Subsidiary, excluding any (x)
dividends or distributions payable solely in shares of Qualified Stock or in
options, warrants or other rights to acquire Qualified Stock, or (y) in the case
of any Restricted Subsidiary, dividends or distributions payable to the Company
or another Restricted Subsidiary,
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(ii) purchase, redeem, or otherwise acquire or retire for value any
shares of Capital Stock of the Company or any Restricted Subsidiary, any
options, warrants or rights to purchase or acquire such shares or any securities
convertible or exchangeable into such shares (other than any such shares of
Capital Stock, options, warrants, rights or securities that are owned by the
Company or a Restricted Subsidiary),
(iii) make any Investment (other than a Permitted Investment) in,
or make any payment on a guarantee of any obligation of, any Person, other than
the Company or a Wholly Owned Subsidiary, or
(iv) redeem, defease, repurchase, retire or otherwise acquire or
retire for value, prior to its scheduled maturity, repayment or any sinking fund
payment, Subordinated Indebtedness (each of the transactions described in
clauses (i) through (iv) (other than any exception to any such clause) being a
"Restricted Payment")
if at the time thereof:
(1) a Default or an Event of Default shall have occurred and be
continuing, or
(2) after giving effect to such Restricted Payment, the Company could
not Incur at least $1.00 of additional Indebtedness pursuant to clause
(i) of Section 4.04, or
(3) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments declared or made on or after the Issue Date exceeds
the sum (without duplication) of: (a) 50% of cumulative Consolidated Net
Income of the Company (or, in the case cumulative Consolidated Net Income
of the Company shall be negative, less 100% of such deficit) for the period
(treated as one accounting period) from the Issue Date through the last day
of the Company's most recently ended fiscal quarter for which financial
statements are available; plus (b) 100% of the aggregate net cash proceeds
and the fair market value of readily marketable securities received after
the Issue Date from the issuance of, or equity contribution received by the
Company with respect to, shares of Qualified Stock and warrants, rights or
options to purchase or acquire shares of Qualified Stock (other than from a
Subsidiary of the Company and other than any such proceeds to the extent
used to redeem the Securities pursuant to paragraph 5 of the Securities)
and the principal amount of Indebtedness of the Company or any Restricted
Subsidiary that has been converted into or exchanged for Qualified Stock
which Indebtedness was Incurred after the Issue Date; plus (c) 100% of the
aggregate after-tax net cash proceeds, from the sale or other disposition
of any Investment constituting a Restricted Payment made after the Issue
Date; provided, however, that any gain on the sale or disposition included
in such after-tax net proceeds shall not be included in determining
Consolidated Net Income for purposes of clause (a) above; provided, further
that amounts included in this clause (c) shall not exceed the Net
Investment by the Company in the asset so sold or disposed; plus (d)
without duplication of any amounts included in clause (a) above, if the
designation of a Subsidiary as an Unrestricted Subsidiary was treated as a
Restricted Payment made after the Issue Date, the proportionate interest of
the Company or any Restricted Subsidiary in the fair market value of any
such Unrestricted Subsidiary that has been redesignated as a Restricted
Subsidiary after the Issue Date in accordance with the definition of
"Unrestricted Subsidiary"; provided, however, that such amount shall not in
any case exceed the amount of Investments made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary that was treated as a
Restricted Payment under the Indenture; plus (e) without duplication of any
amounts included in clause (a) above, 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 the return of capital with
respect to such Investment and the initial amount of such Investment which
was treated as a Restricted Payment, in either case, less the cost of the
disposition of such Investment and net of taxes. For purposes of
determining the amount
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expended for Restricted Payments under this clause (e), property other than
cash shall be valued at its fair market value.
The foregoing provision will not prohibit (i) any dividend on any class of
Capital Stock of the Company or any Restricted Subsidiary paid within 60 days
after the declaration thereof if, on the date when the dividend was declared,
the Company or such Restricted Subsidiary, as the case may be, could have paid
such dividend in accordance with the provisions of this Indenture; (ii) the
Refinancing of any Indebtedness otherwise permitted pursuant to clause (v) of
Section 4.04; (iii) the exchange or conversion of any Indebtedness of the
Company or any Restricted Subsidiary for or into Qualified Stock; (iv) so long
as no Default or Event of Default has occurred and is continuing, any Investment
made with the proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) for cash of Qualified Stock; provided, however, that
the proceeds of such sale of Qualified Stock shall not be (and have not been)
included in clause (3) of the preceding paragraph; (v) the redemption,
repurchase, retirement or other acquisition of any Capital Stock of the Company
in exchange for, or out of the net cash proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company) of Qualified Stock;
provided, however, that the proceeds of such sale of Capital Stock shall not be
(and have not been) included in clause (3) of the preceding paragraph; (vi) so
long as no Event of Default has occurred and is continuing, the redemption,
repurchase or retirement of Subordinated Indebtedness of the Company in exchange
for, by conversion into, or out of the net proceeds of, (A) a substantially
concurrent sale or Incurrence of Subordinated Indebtedness (other than any
Indebtedness owed to a Subsidiary of the Company) of the Company that is
contractually subordinated in right of payment to the Securities to at least the
same extent and which has an Average Life no less than, in each case, the
Subordinated Indebtedness being redeemed, repurchased or retired or (B) a
substantially concurrent sale (other than to a Subsidiary of the Company) for
cash of Qualified Stock; provided, however, that the proceeds of such sale of
Capital Stock shall not be (and have not been) included in clause (3) of the
preceding paragraph; (vii) the making of Investments in Unrestricted
Subsidiaries or joint ventures provided that the aggregate Net Investments
therein shall not exceed $15.0 million at any time; (viii) the repurchase,
retirement or other acquisition or retirement for value of Capital Stock of the
Company held by any future, present or former employee or director of the
Company or any of the Company's Restricted Subsidiaries or the estate, heirs or
legatees of, or any entity controlled by, any such employee or director,
pursuant to any management equity plan or stock option plan or any other
management or employee benefit plan or agreement in connection with the
termination of such person's employment for any reason (including by reason of
death or disability); provided, however, that the aggregate Restricted Payments
made under this clause (viii) does not exceed in any calendar year the sum of
(A) $1.0 million (with unused amounts in any calendar year being carried over to
succeeding calendar years subject to a maximum (without giving effect to the
following proviso) of $10.0 million in any calendar year) and (B) the cash
proceeds of key man life insurance policies on the life of any such person
received by the Company and its Restricted Subsidiaries after the Issue Date;
(ix) so long as no Default or Event of Default shall have occurred and be
continuing, the declaration and payment of dividends to holders of any class or
series of Disqualified Stock of the Company issued in accordance with Section
4.04; (x) repurchases of Capital Stock deemed to occur upon exercise of stock
options if such Capital Stock represents a portion of the exercise price of such
options; (xi) the declaration and payment of dividends to holders of any class
or series of Designated Preferred Stock (other than Disqualified Stock) issued
after the Issue Date; provided, however, that at the time of such issuance,
after giving effect to such issuance on a pro forma basis, the Consolidated Cash
Flow Ratio for the Company and its Restricted Subsidiaries for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date of such issuance would have been no
less than 2 to 1; and (xii) other Restricted Payments in an aggregate amount not
to exceed $15.0 million. Each Restricted Payment described in clauses (i) (to
the extent not already taken into account for purposes of computing the
aggregate amount of all Restricted Payments pursuant to clause (3) of the
preceding paragraph), (vii), (xi) and (xii) of the previous sentence shall be
taken into account
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for purposes of computing the aggregate amount of all Restricted Payments
made pursuant to clause (3) of the preceding paragraph.
For purposes of this Section, (i) an "Investment" shall be deemed to have
been made at the time any Restricted Subsidiary is designated as an Unrestricted
Subsidiary 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 as an Unrestricted Subsidiary;
(ii) at any date the aggregate amount of all Restricted Payments made as
Investments after 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 an Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is redesignated a Restricted Subsidiary, not to exceed, in the case
of any such redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, the amount of Investments previously made by the Company and the
Restricted Subsidiaries in such Unrestricted Subsidiary; provided, however, that
such amount shall not be included in determining Consolidated Net Income for
purposes of subclause (a) of clause (3) of the second preceding paragraph (in
each case (i) and (ii) "net worth" to be calculated based upon the fair market
value of the assets of such Subsidiary as of any such date of designation); and
(iii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each of its
Subsidiaries in accordance with the respective organizational documents of each
such Subsidiary and the rights (charter and statutory) and material franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right or franchise, or the corporate
existence of any Subsidiary, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not, and will not be, adverse in any material respect to the
Holders; provided, further, however, that a determination of the Board of
Directors of the Company shall not be required in the event of a merger of one
or more Wholly Owned Subsidiaries with or into another Wholly Owned Subsidiary
or another Person, if the surviving Person is a Wholly Owned Subsidiary
organized under the laws of the United States or a State thereof or of the
District of Columbia.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders.
SECTION 4.09. Notice of Defaults.
Within five days after becoming aware of any Default, if such Default is
then continuing, the Company shall promptly deliver an Officers' Certificate to
the Trustee specifying the details of such Default and the action which the
Company proposes to take with respect thereto.
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SECTION 4.10. Maintenance of Properties.
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 4.10 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 or of the board of directors of the
Subsidiary concerned, or of an officer (or other agent employed by the Company
or of any of its Subsidiaries) 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 of its Subsidiaries.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 45 days after the end of
each of the first three fiscal quarters of the Company and within 90 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
has occurred and whether or not the signers know of any Default by the Company
that occurred during such fiscal quarter or fiscal year. If they do know of
such a Default, the certificate shall describe all such Defaults, their status
and the action the Company is taking or proposes to take with respect thereto.
The first certificate to be delivered by the Company pursuant to this Section
4.11 shall be for the fiscal quarter ending September 30, 1997.
SECTION 4.12. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Sections or any successor provision thereto if the Company were so
required. The Company shall file such documents with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file such documents if the Company were so required. The
Company shall also in any event (a) within 15 days of each Required Filing Date
(i) transmit by mail to all holders of Securities, as their names and addresses
appear in the Security Register, without cost to such holders, and (ii) file
with the Trustee, copies of the annual reports, quarterly reports and other
documents which the Company is required to file with the Commission pursuant to
the preceding sentence, and (b) if, notwithstanding the preceding sentence,
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request supply copies of such documents
to any prospective holder of Securities.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company 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 from paying all or any
portion of the principal of and/or interest on the 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 it
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may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it 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 4.14. Change of Control.
Within 30 days following the date of the consummation of a transaction
resulting in a Change of Control, the Company will commence an Offer to Purchase
all outstanding Securities at a purchase price in cash equal to 101% of their
principal amount plus accrued and unpaid interest to the Purchase Date. Such
Offer to Purchase will be consummated not earlier than 30 days and not later
than 60 days after the commencement thereof. Each holder shall be entitled to
tender all or any portion of the Securities owned by such holder pursuant to the
Offer to Purchase, subject to the requirement that any portion of a Security
tendered must be in an integral multiple of $1,000 principal amount. A "Change
of Control" shall be deemed to have occurred upon any of the following events
(whether or not otherwise permitted by the Indenture): (i) the sale, lease or
transfer, in one or a series of related transactions, of all or substantially
all of the assets of the Company and its Subsidiaries, taken as a whole; (ii)
the Company becomes aware of (by way of a report or any other filing pursuant to
Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, or any successor provision), including any
group acting for the purpose of acquiring, holding or disposing of securities
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
Permitted Holders, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination or
purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision) of 40% or more of the total voting
power of the Voting Stock of the Company or such Person or group beneficially
owns more of the total voting power of the Voting Stock of the Company than the
Permitted Holders; or (iii) the first day on which a majority of the members of
the Board of Directors of the Company are not Continuing Directors.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
The Company will not (i) directly or indirectly, Incur any Indebtedness
that by its terms would expressly rank senior in right of payment to the
Securities and rank subordinate in right of payment to any other Indebtedness of
the Company and (ii) cause or permit any Guarantor to, and no Guarantor will,
directly or indirectly, incur any Indebtedness that by its terms would expressly
rank senior in right of payment to the Guarantee of such Guarantor and rank
subordinate in right of payment to any other Indebtedness of such Guarantor.
SECTION 4.16. Limitation on Restrictions Affecting Restricted
Subsidiaries.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay, directly or indirectly, dividends or make any other
distributions in respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary, (ii) make
loans or advances to the Company or any other Restricted Subsidiary or
(iii) transfer any of its property or assets to the Company or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of (a) any agreement in effect on the Issue Date as any such
agreement is in effect on such date, (b) the Senior Credit Facility, (c) any
agreement relating to Capital Stock of, or any Indebtedness Incurred by, such
Restricted Subsidiary prior to the date on which such Restricted Subsidiary was
acquired by the Company and outstanding on such date and not Incurred in
anticipation or contemplation of becoming a Restricted Subsidiary; provided,
however, that such encumbrance or restriction shall not apply to any
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property or assets of the Company or any Restricted Subsidiary other than
such Restricted Subsidiary, (d) customary provisions contained in an
agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of a Restricted Subsidiary;
provided, however, that such encumbrance or restriction is applicable only to
such Restricted Subsidiary or its property and assets, (e) customary
provisions in joint venture agreements entered into in the ordinary course of
business, (f) any agreement effecting a Refinancing or amendment of
Indebtedness Incurred pursuant to any agreement referred to in clause (a)
above; provided, however, that the provisions contained in such Refinancing
or amendment agreement relating to such encumbrance or restriction are no
more restrictive in any material respect than the provisions contained in the
agreement that is the subject thereof in the reasonable judgment of the Board
of Directors of the Company, (g) the Indenture, (h) applicable law, rule or
regulation or any order or ruling by any governmental authority; (i)
customary provisions restricting subletting or assignment of any lease
governing any leasehold interest of any Restricted Subsidiary, (j) Purchase
Money Indebtedness that imposes restrictions of the type referred to in
clause (iii) of this covenant, or (k) restrictions of the type referred to in
clause (iii) of this covenant contained in security agreements securing
Indebtedness of a Restricted Subsidiary to the extent that such Liens were
otherwise incurred in accordance with Section 4.17 and restrict the transfer
of property subject to such agreements.
SECTION 4.17. Limitation on Liens.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, create, cause, incur or suffer to exist
any Lien on or with respect to the Capital Stock or any property or assets of
the Company or such Restricted Subsidiary owned on the Issue Date or thereafter
created or acquired or on the income or profits thereof to secure any
Indebtedness, without making, or causing such Restricted Subsidiary to make,
effective provision for securing the Securities and all other amounts due under
the Indenture equally and ratably with such Indebtedness or, in the event such
Indebtedness is Subordinated Indebtedness, prior to such Indebtedness, as to
such property or assets for so long as such Indebtedness shall be so secured.
The foregoing restrictions shall not apply to (i) Liens existing on the
Issue Date securing Indebtedness existing on the Issue Date; (ii) Liens securing
Senior Debt (including Liens securing Indebtedness under the Senior Credit
Facility) and any guarantees thereof to the extent that the Indebtedness secured
thereby is permitted to be incurred under Section 4.04; (iii) Liens securing
only the Securities and the Guarantees, if any; (iv) Liens in favor of the
Company or any Guarantor; (v) Liens to secure Purchase Money Indebtedness and
Capital Lease Obligations; provided, however, that (a) such Lien does not extend
to or cover any other property or assets other than such item of property and
any improvements on such item and any insurance proceeds resulting from damage
to or destruction of such property or improvements, and (b) the Incurrence of
such Indebtedness is permitted by Section 4.04; (vi) Liens on property existing
immediately prior to the time of acquisition thereof (and not created in
connection with or in anticipation or contemplation of the financing of such
acquisition); (vii) Liens on property of a Person existing at the time such
Person is acquired or merged with or into or consolidated with the Company or
any such Restricted Subsidiary (and not created in connection with or in
anticipation or contemplation thereof); (viii) Liens to secure Indebtedness
Incurred to Refinance, in whole or in part, any Indebtedness secured by Liens
referred to in the foregoing clauses (i)-(vii) so long as such Liens do not
extend to any other property and the principal amount of Indebtedness so secured
is not increased except for the amount of any premium required to be paid in
connection with such Refinancing pursuant to the terms of the Indebtedness
Refinanced or the amount of any premium reasonably determined by the Company as
necessary to accomplish such Refinancing by means of a tender offer, exchange
offer or privately negotiated repurchase, plus the expenses of the issuer of
such Indebtedness reasonably incurred in connection with such Refinancing;
(ix) Liens in favor of the Trustee as provided for in this Indenture on money or
property held or collected by the Trustee in its capacity as Trustee; (x) Liens
to secure the performance of statutory or regulatory obligations,
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leases, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business; (xi) Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided, however,
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor, and (xii) Liens incurred
in the ordinary course of business of the Company or any Subsidiary of the
Company with respect to obligations that do not exceed $5.0 million at any
one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the
use thereof in the operation of business by the Company or such Subsidiary.
SECTION 4.18. Subsidiary Guarantees.
The Company shall not permit any Restricted Subsidiary to become a direct
or indirect obligor under, or in respect of, the Senior Credit Facility without
causing such Restricted Subsidiary to become a Guarantor. Any such Restricted
Subsidiary shall (a) execute and deliver a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Securities and the Indenture on the terms set forth in the Indenture
and (b) deliver to the Trustee an opinion of counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a valid and legally binding and enforceable
obligation of such Restricted Subsidiary (subject, in the case of
enforceability, to customary bankruptcy, insolvency, fraudulent conveyance and
similar exceptions).
Any Guarantor that is no longer a direct or indirect obligor under, or in
respect of, the Senior Credit Facility shall be released from the Guarantee upon
delivery of an Officers' Certificate to the Trustee certifying to such effect.
The Company may, at its option, cause any of its Subsidiaries to be a
Guarantor.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations and Certain Sales
of Assets.
The Company will not consolidate or merge with or into any Person, or sell,
assign, lease, convey or otherwise dispose of (or cause or permit any Restricted
Subsidiary to consolidate or merge with or into any Person or sell, assign,
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 Restricted
Subsidiaries), whether as an entirety or substantially an entirety in one
transaction or a series of related transactions, including by way of liquidation
or dissolution, to any Person unless, in each such case: (i) the entity formed
by or surviving any such consolidation or merger (if other than the Company or
such Restricted Subsidiary, as the case may be), or to which such sale,
assignment, lease, conveyance or other disposition shall have been made (the
"Surviving Entity"), is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
Surviving Entity assumes by supplemental indenture all of the obligations of the
Company on the Securities and under the Indenture; (iii) immediately after
giving effect to such transaction and the use of any net
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proceeds therefrom on a pro forma basis, the Company or the Surviving Entity, as
the case may be, could Incur at least $1.00 of Indebtedness pursuant to clause
(i) of Section 4.04; (iv) immediately before and after giving effect to such
transaction and treating any Indebtedness which becomes an obligation of the
Company or any of its such Restricted Subsidiaries as a result of such
transaction as having been Incurred by the Company or such Restricted
Subsidiary, as the case may be, at the time of the transaction, no Default or
Event of Default shall have occurred and be continuing; and (v) if, as a result
of any such transaction, property or assets of the Company or a Restricted
Subsidiary would become subject to a Lien not excepted from the provisions of
Section 4.17, the Company, Restricted Subsidiary or the Surviving Entity, as the
case may be, shall have secured the Securities as required by said covenant.
The provisions of this paragraph shall not apply to any merger of a Restricted
Subsidiary with or into the Company or a Wholly Owned Subsidiary or the release
of any Guarantor in accordance with the terms of the Guarantee and the Indenture
in connection with any transaction complying with the provisions of Section
4.05.
SECTION 5.02. Successor Corporation Substituted.
Upon the execution of a supplemental indenture by the Surviving Person in
form and substance satisfactory to the Trustee (as evidenced by the Trustee's
execution thereof) in accordance with Section 5.01, the Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of
and shall assume all obligations of, the Company or such Subsidiary, as the case
may be, under this Indenture, the Registration Rights Agreement and the
Securities or the Guarantees, as the case may be, with the same effect as if
such Surviving Person had been named as the Company or such Subsidiary, as the
case may be, herein and therein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and covenants under
this Indenture, the Registration Rights Agreement and the Securities or the
Guarantees, as the case may be.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company fails to pay principal of (or premium, if any, on)
any Security when due (whether or not prohibited by Article Eight or
Twelve);
(b) the Company fails to pay any interest on any Security when due,
continued for 30 days (whether or not prohibited by Article Eight or
Twelve);
(c) the Company defaults in the payment of principal of and interest
on Securities required to be purchased pursuant to an Offer to Purchase
under Sections 4.05 or 4.14 hereof when due and payable (whether or not
prohibited by Article Eight or Twelve);
(d) the Company fails to perform or comply with any of the provisions
of Section 5.01;
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(e) the Company fails to perform any other covenant or agreement of
the Company under this Indenture or the Securities continued for 30 days
after written notice to the Company by the Trustee or holders of at least
25% in aggregate principal amount of outstanding Securities;
(f) the Company defaults under the terms of one or more instruments
evidencing or securing Indebtedness of the Company or any of its
Subsidiaries having an outstanding principal amount of $15.0 million or
more individually or in the aggregate that has resulted in the acceleration
of the payment of such Indebtedness or failure to pay principal when due at
the stated final maturity of any such Indebtedness;
(g) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any of its Restricted Subsidiaries in an
amount of $15.0 million or more which remains undischarged or unstayed for
a period of 60 days after the date on which the right to appeal has
expired;
(h) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(1) commences a voluntary case or proceeding,
(2) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(3) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(4) makes a general assignment for the benefit of its creditors;
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(1) is for relief against the Company or any Material Subsidiary
in an involuntary case or proceeding,
(2) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its property, or
(3) orders the liquidation of the Company or any Material
Subsidiary,
and in each case the order or decree remains unstayed and in effect for
60 days; provided, however, that if the entry of such order or decree is
appealed and dismissed on appeal then the Event of Default hereunder by
reason of the entry of such order or decree shall be deemed to have been
cured; or
(j) any Guarantee, ceases to be in full force and effect or is
declared null and void and unenforceable or is found to be invalid or any
Guarantor denies its liability under its Guarantee (other than by reason of
a release of such Guarantor from its Guarantee in accordance with the terms
of this Indenture and such Guarantee).
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The term "Bankruptcy Law" means Title 11, U.S. Code, as amended, or any
similar Federal, state or foreign law for the relief of debtors. 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 with respect to the
Company specified in Section 6.01(h) or (i)) shall occur and be continuing,
either the Trustee or the Holders of at least 25% in aggregate principal amount
of the outstanding Securities may accelerate the maturity of all Securities;
provided, however, that after such acceleration, but before a judgment or decree
based on acceleration, the Holders of a majority in aggregate principal amount
of outstanding Securities may rescind and annul such acceleration if all
Defaults, other than the non-payment of accelerated principal, have been cured
or waived as provided in this Indenture; provided, further, that so long as the
Senior Credit Facility shall be in full force and effect, if an Event of Default
shall have occurred and be continuing (other than an Event of Default with
respect to the Company specified in Section 6.01(h) or (i)), the Securities
shall not become due and payable until the earlier to occur of (x) five Business
Days following delivery of a written notice of such acceleration of the
Securities to the agent under the Senior Credit Facility, if such Event of
Default has not been cured prior to such fifth business day, and (y) the
acceleration of any Indebtedness under the Senior Credit Facility. If an Event
of Default specified in Section 6.01(h) or (i) occurs, the outstanding
Securities will ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
maturing 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 Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration of
acceleration of the Securities, (i) the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default and its consequences, except a Default
in the payment of principal of or interest on any Security as specified in
Section 6.01(a) or (b), a default arising from failure to effect an Offer to
Purchase required under Section 4.14 or a Default in respect of any term or
provision of this Indenture that may not be amended or modified without the
consent of each Holder affected as provided in Section 10.02 and (ii) the
Holders of three-fourths of the aggregate principal amount of Notes affected
thereby, on behalf of all Holders, may waive a default arising from failure to
effect an Offer to Purchase required under Section 4.14. The Company shall
deliver to the Trustee an Officers' Certificate stating that the requisite
percentage of Holders have consented to such waiver and attaching copies of such
consents. In case of any such waiver, the Company, the Trustee and the Holders
shall be restored to their former positions and rights hereunder and under the
Securities, respectively. This paragraph of this Section 6.04 shall be in lieu
of Section 316(a)(1)(B) of the TIA and such Section
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316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount of
the outstanding Securities may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of another Securityholder, or that may
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction. In the event the Trustee takes any action or follows any
direction pursuant to this Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section 3
16(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities make a written request to the Trustee to pursue a
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee 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 and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities (excluding Affiliates of the Company)
do not give the Trustee a direction which, in the opinion of the Trustee,
is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 6.06 limitations do not apply to a suit instituted by a Holder of a
Note for enforcement of payment of the principal or of interest on such Security
on or after the respective due dates therefor.
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SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities, on or
after the respective due dates therefor, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal 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 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
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
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
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 Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: subject to Articles Eight and Twelve, to Holders for amounts
due and unpaid on the Securities for principal and interest, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 shall not apply to a suit by the Trustee, a suit by a Holder
or group of Holders of more than 10% in aggregate principal amount of the
outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates therefor.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of a 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 conforming to
the requirements of this Indenture; provided, however, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).
(c) The Trustee shall not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or to take or omit to take any action
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under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive an indemnity satisfactory to it in
its sole discretion against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Money or assets held in trust by the Trustee need not be segregated from other
funds or assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting on any document whether in its original or
facsimile form believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate and
an Opinion of Counsel, which shall conform to the provisions of Section
13.05. The Trustee shall not be liable for any action it takes, suffers or
omits to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its selection
and shall not be responsible for the misconduct or negligence of any agent
or attorney (other than an agent who is an employee of the Trustee)
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 reasonably believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(e) 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 Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(f) Provided the Trustee acts in good faith, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or
investigation.
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(g) The Trustee shall not be deemed to have notice of any Default
unless a Trust Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Securities and this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and
7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of any Default with
respect to the Securities, give the Holders notice of all uncured Defaults
actually known to it; provided, however, that, except in the case of an Event of
Default or a Default in payment with respect to the Securities or a Default in
complying with Section 5.01, the Trustee shall be protected in withholding such
notice if and so long as the Board of Directors of the Trustee, the executive
committee or a trust committee of directors or responsible officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each July 1
beginning with the July 1 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such July 1 that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b), (c) and (d).
A copy of each such report at the time of its mailing to Securityholders
shall be filed with the Commission, the Company and each stock exchange, if any,
on which the Securities are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any securities exchange or of any delisting therefrom.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
(including reasonable fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except
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any such disbursements, expenses and advances as may be attributable to the
Trustee's negligence or bad faith. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee or any predecessor Trustee and
their agents for, and hold them harmless against any and all loss, damage,
claims, liability or expense, including taxes (other than franchise taxes
imposed on the Trustee and taxes based upon, measured by or determined by the
income of the Trustee), arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of enforcing this Indenture against the Company (including Section
7.07) and of defending itself against any claim (whether asserted by any
Securityholder or the Company or any other person) or liability in connection
with the exercise or performance of any of their powers or duties hereunder,
except to the extent that such loss, damage, claim, liability or expense is due
to their own negligence or bad faith. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. However, the failure by the Trustee to so notify the Company shall
not relieve the Company of its obligations hereunder (unless and only to the
extent that such failure results in the loss or compromise of any rights or
defenses). The Company shall defend the claim and the Trustee shall cooperate
in the defense (and may employ its own counsel) at the Company's expense;
provided, however, that the Company's reimbursement obligation with respect to
counsel employed by the Trustee will be limited to the reasonable fees and
expenses of such counsel. The Company need not pay for any settlement made
without its written consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the violation of this Indenture
by the Trustee.
To the extent permitted by the Senior Credit Facility, to secure the
Company's payment obligations in this Section 7.07, the Trustee shall have a
Lien prior to the Securities against all money or property held or collected by
the Trustee or any predecessor Trustee, in their capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) occurs, the expenses (including the
reasonable fees and expenses of its agents and counsel) and the compensation for
the services shall be preferred over the status of the Holders in a proceeding
under any Bankruptcy Law and are intended to constitute expenses of
administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of this
Indenture.
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 aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
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(3) a custodian or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the 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. As promptly as practicable after
that, the retiring Trustee shall transfer, after payment of all sums then owing
to the Trustee pursuant to Section 7.07, all property held by it as Trustee to
the successor Trustee, subject to the Lien provided in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have the rights, powers and duties of the Trustee under
this Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding
Securities may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
banking corporation, the resulting, surviving or transferee corporation or
banking corporation without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to act
as Trustee under TIA Sections 310(a)(1) and 310(a)(5). The Trustee (or in the
case of a corporation included in a bank holding company, the related bank
holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. If the Trustee has or shall acquire any "conflicting interest"
within the meaning of TIA Section 310(b), the Trustee and the Company shall
comply with the provisions of TIA Section 310(b); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect hereinbefore specified in this Article Seven.
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SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder of the
Securities by his acceptance thereof likewise covenant and agree, that all
Securities shall be issued subject to the provisions of this Article; and each
Holder of any 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 Additional Interest) on, and all other obligations in
respect of each and all of the Securities, shall, to the extent and in the
manner set forth in this Article, be subordinated and junior in right of payment
to the prior payment in full in cash of all amounts payable under the Senior
Debt.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment, deposit or distribution of any kind or
character, whether in cash, property or securities (including any payment made
to Holders of the Securities under the terms of Indebtedness subordinated to the
Securities, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of the Company of principal of, or interest
(including, Additional Interest) on, or any other obligation in respect of, the
Securities, whether pursuant to the terms of the Securities, upon acceleration,
by way of repurchase, redemption, defeasance or otherwise (all such payments,
deposits or distributions being referred to herein, individually and
collectively, as a "Securities Payment"), shall be made if, at the time of such
Securities Payment, there exists a default (a "Payment Default") in the payment
when due of all or any portion of the obligations under or in respect of any
Designated Senior Debt, whether at maturity, on account of mandatory redemption
or prepayment, acceleration or otherwise, and such Payment Default shall not
have been cured or waived. In addition, during the continuance of any default
or event of default (other than a Payment Default) with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without the giving of any notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, no Securities Payment may be made by or on behalf of the Company for a
period (a "Payment Blockage Period") commencing upon the receipt by the Company
and the Trustee of written notice of such default or event of default from the
holder or holders of such Designated Senior Debt or any trustee, agent or other
representative acting on behalf of the holder or holders of such Designated
Senior Debt specifying an election to effect a Payment Blockage Period (a
"Payment Blockage Notice") and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee and
the Company from the holder or holders of such Designated Senior Debt or any
trustee, agent or other representative acting on behalf of the holder or holders
of such Designated Senior Debt, (ii) by discharge or repayment in full in cash
of such Designated Senior Debt or (iii) because the default or event of default
giving rise to such Payment Blockage Notice has been cured, waived or ceased to
exist). Subject to the provisions of the first sentence of this Section, the
Company may resume payments on the Securities after such Payment Blockage
Period.
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Not more than one Payment Blockage Period may be commenced with respect to
the Securities during any period of 360 consecutive days. No default or event
of default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Debt initiating
such Payment Blockage Period may be, or be made, the basis for the commencement
of any other Payment Blockage Period by the holder or holders of such Designated
Senior Debt or any trustee, agent or other representative acting on behalf of
the holder or holders of such Designated Senior Debt, whether or not within a
period of 360 consecutive days, unless such default or event of default has been
cured or waived for a period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any Securities
Payment shall be received by the Trustee or any Holder when such Securities
Payment is prohibited by Section 8.02(a), such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Debt or any trustee, agent or other representative under any
agreement or indenture pursuant to which any of such Designated Senior Debt may
have been issued, as their respective interests may appear, but only to the
extent that, upon notice from the Trustee to the holders of Designated Senior
Debt that such prohibited Securities Payment has been made, the holders of the
Designated Senior Debt (or their trustee, agent or other representative) notify
the Trustee in writing of the amounts then due and owing on the Designated
Senior Debt, if any, and only the amount specified in such notice to the Trustee
shall be paid to or for the account of the holders of Designated Senior Debt.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) In the event of (i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to their assets, or (ii) any liquidation, dissolution or other
winding up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (iii) any assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Company, then
and in any such event specified in (i), (ii) or (iii) above the holders of
Senior Debt shall be entitled to receive payment in full in cash of all amounts
due or to become due on or in respect of all Senior Debt before the Holders of
the Securities are entitled to receive any Securities Payment and in any such
event any Securities Payment to which the Holders of the 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, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective trustee, agent or other representative 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 after giving effect to any 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 Securities Payment, any Securities Payment shall be received by the Trustee
or any Holder of Securities at a time when such Securities Payment is prohibited
by Section 8.03(a) and before all obligations in respect of Senior Debt are paid
in full in cash, such Securities Payment shall be received and held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Debt (pro rata to such holders on the basis of the respective amounts of Senior
Debt held by such holders) or their respective trustee, agent or other
representative under any agreement or indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of Senior Debt remaining unpaid until all such Senior
Debt has been paid in
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full in cash after giving effect to any concurrent payment, distribution or
provision therefor to or for the account of the holders of such Senior Debt.
The consolidation of the Company with, or the merger of the Company with or
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Debt, the Holders of the
Securities shall be subrogated to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of the Company
made on such Senior Debt until the principal of, interest (including Additional
Interest, if any) on, and all other amounts in respect of the Securities shall
be paid in full in cash; and, for the purposes of such subrogation, no payments
or distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee on their behalf
would be entitled except for the provisions of this Article, and no payment over
pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee on their behalf shall, as between the
Company, its creditors other than holders of Senior Debt, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Debt. It is understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities, on the one hand, and the holders of the Senior Debt, on the
other hand.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company and the Holders
of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
interest (including Additional Interest, if any) on, and all other amounts in
respect of the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
Holder of any Security or the Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article of the holders of the Senior
Debt in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
SECTION 8.06. 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 Securities pursuant to the provisions of this Article.
The Trustee shall not be charged with knowledge of the existence of any default
or event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing at this Corporate Trust Office
to that effect signed by an Officer of the Company, or by a holder of Senior
Debt or trustee, agent or other representative therefor; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article Seven,
be entitled to assume that no such facts exist; provided that if the Trustee
shall not have received the
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notice provided for in this Section 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 or
interest (including Additional Interest) on any 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. Nothing
contained in this Section 8.06 shall limit the right of the holders of Senior
Debt to recover payments as contemplated by Section 8.03. 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 (or a trustee,
agent or other representative of, such holder) to establish that such notice has
been given by a holder of such Senior Debt or a trustee, agent or other
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 to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, 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
payment.
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decrees 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, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders of the Securities for
the purpose of ascertaining the persons entitled to participate in such payment
or distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 8.08. Trustee's Relation to Senior Debt.
The Trustee and any Paying Agent shall be entitled to all the rights set
forth in this Article with respect to any Senior Debt which may at any time be
held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt (except as provided in Sections 8.02(b) and
8.03)(b)). 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 Securities
or to the Company or to any other person cash, property or securities to which
any holders of Senior Debt shall be entitled by virtue of this Article or
otherwise.
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SECTION 8.09. 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 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
revisions of this Article are intended to be for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt.
SECTION 8.10. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such 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, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his
Securities in the form required in those proceedings.
SECTION 8.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of, or interest
(including Additional Interest) on, or any other amount in respect of the
Securities by reason of any provision of this Article shall not be construed as
preventing the occurrence of an Event of Default under Article Six.
SECTION 8.12. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the holders of
Senior Debt may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (c) release any Person
liable in any manner for the collection of Senior Debt; and (d) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 8.13. Subordination Provisions Not Applicable to Money Held
in Trust for Securityholders; Payments May Be Paid
Prior to Dissolution.
All cash and investments deposited in trust with the Trustee pursuant to
and in accordance with Article Nine shall be for the sole benefit of the Holders
and shall not be subject to this Article Eight.
Nothing contained in this Article or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Section 8.02,
from making payments of principal of, or interest (including
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Additional Interest) on, the Securities, or from depositing with the Trustee any
such payments or from effecting a termination of the Company's obligations under
the Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest (including Additional
Interest) on the Securities, to the holders entitled thereto unless at least two
Business Days prior to the date upon which such payment becomes due and payable
and the Trustee shall have received the written notice provided for in Section
8.02(b) or in Section 1.06. The Company shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or reorganization of the
Company.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
(a) Discharge. Subject to the provisions of Article Eight, the Company
may terminate its substantive obligations and the substantive obligations of the
Guarantors, if any, in respect of the Securities and the Guarantees by
delivering all outstanding Securities to the Trustee for cancellation and paying
all sums payable by the Company on account of principal of and interest on all
Securities or otherwise.
(b) Covenant Defeasance. In addition to the provisions of
Section 9.01(a), the Company may, provided that no Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default specified in
Section 6.01(h) or (i), any time on or prior to the 91st calendar day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st day)) and provided that no default under
any Senior Debt would result therefrom, terminate its substantive obligations
and the substantive obligations of the Guarantors, if any, in respect of the
Securities and the Guarantees (except for the Company's obligation to pay the
principal of and the interest on the Securities and such Guarantors' guarantee
thereof) by (i) depositing with the Trustee, under the terms of an irrevocable
trust agreement, money or direct non-callable obligations of the United States
of America for the payment of which its full faith and credit is pledged
("United States Government Obligations") sufficient (without reinvestment) to
pay all remaining indebtedness on the Securities to maturity or to redemption,
(ii) delivering to the Trustee either an Opinion of Counsel or a ruling directed
to the Trustee from the Internal Revenue Service to the effect that the Holders
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and termination of obligations, (iii) delivering to the
Trustee an Opinion of Counsel to the effect that the Company's exercise of its
option under this paragraph will not result in the Company, the Trustee or the
trust created by the Company's deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act of 1940, as amended, and (iv) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that there has been
compliance with all conditions precedent provided for herein.
(c) Legal Defeasance. In addition to the provisions of Section 9.01(a)
and (b), the Company may, provided that no Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default specified in
Section 6.01(h) or (i), any time on or prior to the 91st calendar day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 91st day)) and provided that no default under
any Senior Debt would result therefrom, terminate all of its substantive
obligations and all of the substantive obligations of the Guarantors, if any, in
respect of the Securities and the Guarantees (including the Company's obligation
to pay the principal of and interest on the Securities and such Guarantors'
guarantee thereof) by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or United
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States Government Obligations sufficient (without reinvestment) to pay all
remaining indebtedness on the Securities to maturity or to redemption, (ii)
delivering to the Trustee either a ruling directed to the Trustee from the
Internal Revenue Service to the effect that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and termination of obligations or an Opinion of Counsel based upon
such a ruling addressed to the Trustee or a change in the applicable Federal
tax law since the date of this Indenture, to such effect, (iii) delivering to
the Trustee an Opinion of Counsel to the effect that the Company's exercise
of its option under this paragraph will not result in the Company, the
Trustee or the trust created by the Company's deposit of funds pursuant to
this provision becoming or being deemed to be an "investment company" under
the Investment Company Act of 1940, as amended, and (iv) delivering to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
there has been compliance with all conditions precedent provided for herein.
(d) Notwithstanding the foregoing paragraphs 9.01(b) and (c) above, the
Company's obligations contained in Sections 2.03, 2.05, 2.06, 2.07, 4.02,
7.07, 7.08, 9.03 and 9.04 shall survive until the Securities are no longer
outstanding. In addition, notwithstanding the foregoing paragraph 9.01(b),
in that instance the Company's obligations contained in Section 4.01 shall
also survive until the Securities are no longer outstanding. Thereafter the
Company's obligations in Section 7.07, 9.03 and 9.04 shall survive. The
Company may make an irrevocable deposit pursuant to this Section 9.01 only if
at such time it is not prohibited from doing so under the subordination
provisions of this Indenture and the Company has delivered to the Trustee and
any Paying Agent an Officers' Certificate to that effect. After such
delivery or irrevocable deposit and delivery of an Officers' Certificate and
Opinion of Counsel, the Trustee upon request of the Company shall acknowledge
in writing the discharge of the Company's and the Guarantors' (if any)
obligations under the Securities, the Guarantees and this Indenture other
than those surviving obligations specified in this paragraph (d).
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities. The Company shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the United States
Government Obligations deposited pursuant to Section 9.01 or the principal
and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of outstanding
Securities.
SECTION 9.03. Repayment to Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay to the
Company upon receipt by the Trustee of the Company's written request
accompanied by an Officers' Certificate any excess money held by it at any
time. The Trustee shall pay to the Company upon such request any money held
by it for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee before being required to make any
payment may at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and
that, after a date specified therein which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining shall be repaid to the Company. After payment to the Company,
Securityholders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person, and all liability of the Trustee or Paying Agent with respect
to such money shall thereupon cease.
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SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States Government
Obligations in accordance with Section 9.01 by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors'(if any) obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 9.01 until such time as the Trustee is permitted
to apply all such money or United States Government Obligations in accordance
with Section 9.01; provided, however, that if the Company has made any
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the
money or United States Government Obligations held by the Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, if any, when authorized by a resolution
of their respective Boards of Directors, and the Trustee may amend or
supplement this Indenture or the Securities without notice to or consent of
any Securityholder:
(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(ii) to effect the assumption by a successor Person of all obligations
of the Company under the Securities and this Indenture in connection with
any transaction complying with Article Five of this Indenture;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(iv) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional benefit or
rights to the Holders;
(vi) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(vii) to evidence the succession of another Person to any
Guarantor and the assumption by any such successor of the covenants of such
Guarantor herein and in the Guarantee;
(viii) to add to the covenants of the Company or the Guarantors for
the benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or any Guarantor;
(ix) to secure the Securities pursuant to the requirements of Section
4.17 or otherwise; or
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(x) to reflect the release of a Guarantor from its obligations with
respect to its Guarantee in accordance with the provisions of Section 11.03
and to add a Guarantor pursuant to the requirements of Section 4.18;
provided, however, that the Company has delivered to the Trustee an Opinion
of Counsel and an Officers' Certificate each stating that such amendment or
supplement complies with the provisions of this Section 10.01.
SECTION 10.02. With Consent of Holders.
The Company, the Guarantors, if any, and the Trustee may amend or
supplement this Indenture or the Securities with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities. However, without the consent of each Holder affected, an
amendment, supplement or waiver may not:
(1) change the Stated Maturity of the principal of any Security;
(2) alter the optional redemption or repurchase provisions of any
Security or this Indenture in a manner adverse to the holders of the
Securities;
(3) reduce the principal amount of any Security;
(4) reduce the rate of or extend the time for payment of interest on
any Security;
(5) change the place or currency of payment of the principal of or
interest on any Security;
(6) modify any provisions of this Indenture relating to the waiver of
past defaults (other than to add sections of this Indenture subject
thereto) or the right of the Holders to institute suit for the enforcement
of any payment on or with respect to any Security or the Guarantees, or the
modification and amendment of this Indenture and the Securities (other than
to add sections of this Indenture or the Securities which may not be
amended, supplemented or waived without the consent of each Holder
affected);
(7) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any Default;
(8) waive a default in the payment of principal of, interest on, or
redemption payment with respect to, any Security (except a rescission of
acceleration of the Securities by the Holders as provided in this Indenture
and a waiver of the payment default that resulted from such acceleration);
(9) modify the ranking or priority of the Securities or the
Guarantee, if any, or modify the definition of Senior Debt or Designated
Senior Debt or amend or modify the subordination provisions of this
Indenture in any manner adverse to the Holders;
(10) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with this
Indenture; or
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(11) modify any of the provisions (including the definitions relating
thereto) relating to any Offer to Purchase required under Sections 4.05 or
4.14 in a manner materially adverse to the holders of Securities with
respect to any Asset Disposition that has been consummated or Change of
Control that has occurred.
The Holders of a majority in aggregate principal amount of the
outstanding Securities, on behalf of all holders of Securities, may waive
compliance by the Company with certain restrictive provisions of this
Indenture. Subject to certain rights of the Trustee, as provided in this
Indenture, the Holders of a majority in aggregate principal amount of the
outstanding Securities, on behalf of all Holders of Securities, may waive any
past default under this Indenture, except a default in the payment of
principal, premium or interest or a default arising from failure to purchase
any Security tendered pursuant to an Offer to Purchase, or a default in
respect of a provision that under this Indenture cannot be modified or
amended without the consent of the Holder of each outstanding Security
affected.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of
that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on
any Security. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Security or
portion of such Security by written notice to the Trustee or the Company
received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the
last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in the second
sentence of Section 10.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
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SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel and an Officers' Certificate each stating
that the execution of any amendment, supplement or waiver authorized pursuant
to this Article Ten is authorized or permitted by this Indenture and that
such amendment, supplement or waiver constitutes the legal, valid and binding
obligation of the Company and the Guarantors, enforceable in accordance with
its terms (subject to customary exceptions). The Trustee shall execute any
amendment, supplement or waiver authorized pursuant to this Article Ten,
provided, however, that the Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver which affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise. In
signing any amendment, supplement or waiver, the Trustee shall be entitled to
receive an indemnity reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor who becomes a party to this Indenture hereby
unconditionally, jointly and severally, guarantees to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns that: the principal of and interest on the
Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and interest
on the overdue principal and interest on any overdue interest on the
Securities and all other obligations of the Company to the Holders or the
Trustee hereunder or under the Securities will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; subject,
however, to the limitations set forth in Section 11.04. Each such Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities
or this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Each
such Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that the Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities, this Indenture, and this Guarantee. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such Holder,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand,
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and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
for the purpose of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Six, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this 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.
SECTION 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with Section 9.01(c), or if
all of the Capital Stock of any Guarantor is sold (including by issuance or
otherwise) by the Company or any of its Subsidiaries in a transaction
constituting an Asset Disposition (or which, but for the provisions of clause
(c) of the definition of such term, would constitute an Asset Disposition),
and, if required by this Indenture, (x) the Net Available Proceeds from such
Asset Disposition are used in accordance with Section 4.05 or (y) the Company
delivers to the Trustee an Officers' Certificate covenanting that the Net
Available Proceeds from such Asset Disposition will be used in accordance
with Section 4.05 and within the time limits specified by such Section 4.05,
then such Guarantor shall be released and discharged from all obligations
under this Article Eleven upon such use in the case of clause (x) or upon
such delivery in the case of clause (y). The Trustee shall, at the sole cost
and expense of the Company and upon receipt at the reasonable request of the
Trustee of an Opinion of Counsel that the provisions of this Section 11.03
have been complied with, deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section. Any Guarantor
not so released remains liable for the full amount of principal of and
interest on the Securities and the other obligations of the Company hereunder
as provided in this Article Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the Trustee,
hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United
States Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar U.S. Federal or state or other
applicable law. To effectuate the foregoing intention, the Holders and such
Guarantor hereby irrevocably agree that the obligations of such Guarantor
under the Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to Section 11.05, result in the
obligations of such Guarantor under the Guarantee not constituting such
fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from
all other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with
GAAP, subject to Section 11.04, for all payments, damages and expenses
incurred by that Funding Guar-
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antor in discharging the Company's obligations with respect to the Securities
or any other Guarantor's obligations with respect to the Guarantee.
SECTION 11.06. Execution of Guarantee.
To further evidence their Guarantee to the Holders, any Guarantor
required to Guarantee the Securities pursuant to Section 4.18 shall execute
the endorsement of Guarantee in substantially the form set forth in Exhibit A
hereto, which endorsement shall be delivered to each Holder to be attached to
each Security. Each such Guarantor hereby agrees that its Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Guarantee. Each
such Guarantee shall be signed on behalf of each Guarantor by its Chairman of
the Board, its President or one of its Vice Presidents prior to the
authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of such Guarantee on behalf of such Guarantor.
Such signature upon the Guarantee may be manual or facsimile signature of
such officer and may be imprinted or otherwise reproduced on the Guarantee,
and in case such officer who shall have signed the Guarantee shall cease to
be such officer before the Security on which such Guarantee is endorsed shall
have been authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed the Guarantee had not ceased to
be such officer of the Guarantor.
SECTION 11.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to,
and no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in
accordance with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Subordinated to Senior Debt of Guarantor.
Each Guarantor covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, that
the Guarantees shall be issued subject to the provisions of this Article; and
each Holder of any 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 Additional Interest) on, and all other
obligations in respect of each and all of the Securities pursuant to the
Guarantee, shall, to the extent and in the manner set forth in this Article,
be subordinated and junior in right of payment to the prior payment in full
in cash of all amounts payable under the Senior Debt of such Guarantor.
SECTION 12.02. No Payment on Guarantees in Certain Circumstances.
(a) No direct or indirect payment, deposit or distribution of any kind
or character, whether in cash, property or securities (including any payment
made to Holders of the Securities under the terms of Indebtedness
subordinated to the Securities, but excluding any payment or distribution of
Permitted Junior Securities) by or
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on behalf of any Guarantor of principal of, or interest (including,
Additional Interest) on, or any other obligation in respect of, the
Securities pursuant to such Guarantor's Guarantee, whether pursuant to the
terms of the Securities, upon acceleration, by way of repurchase, redemption,
defeasance or otherwise, shall be made if, at the time of such payment, there
exists a default in the payment when due of all or any portion of the
obligations under or in respect of any Designated Senior Debt of such
Guarantor, whether at maturity, on account of mandatory redemption or
prepayment, acceleration or otherwise, and such default shall not have been
cured or waived. In addition, during the continuance of any non-payment
default or non-payment event of default with respect to any Designated Senior
Debt pursuant to which the maturity thereof may be accelerated immediately
without the giving of any notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
no payment may be made by or on behalf of such Guarantor for a period (a
"Guarantor Blockage Period") commencing upon the receipt by such Guarantor
and the Trustee of written notice of such default or event of default from
the holder or holders of such Designated Senior Debt or any trustee, agent or
other representative acting on behalf of the holder or holders of such
Designated Senior Debt specifying an election to effect a Guarantor Blockage
Period (a "Guarantor Payment Blockage Notice") and ending 179 days thereafter
(or earlier if such Guarantor Blockage Period is terminated (i) by written
notice to the Trustee and such Guarantor from the holder or holders of such
Designated Senior Debt or any trustee, agent or other representative acting
on behalf of the holder or holders of such Designated Senior Debt, (ii) by
discharge or repayment in full in cash of such Designated Senior Debt or
(iii) because the default or event of default giving rise to such Guarantor
Payment Blockage Notice has been cured, waived or ceased to exist). Subject
to the provisions of the first sentence of this Section, such Guarantor may
resume payments on the Securities after such Guarantor Blockage Period.
Not more than one Guarantor Blockage Period may be commenced with respect
to a Guarantee during any period of 360 consecutive days. No default or
event of default that existed or was continuing on the date of commencement
of any Guarantor Blockage Period with respect to the Designated Senior Debt
initiating such Guarantor Blockage Period may be, or be made, the basis for
the commencement of any other Guarantor Blockage Period by the holder or
holders of such Designated Senior Debt or any trustee, agent or other
representative acting on behalf of the holder or holders of such Designated
Senior Debt, whether or not within a period of 360 consecutive days, unless
such default or event of default has been cured or waived for a period of not
less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by
Section 12.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of such Designated Senior
Debt or any trustee, agent or other representative under any agreement or
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, but only to the extent
that, upon notice from the Trustee to the holders of such Designated Senior
Debt that such prohibited payment has been made, the holders of such
Designated Senior Debt (or their trustee, agent or other representative)
notify the Trustee in writing of the amounts then due and owing on such
Designated Senior Debt, if any, and only the amount specified in such notice
to the Trustee shall be paid to or for the account of the holders of such
Designated Senior Debt.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) In the event of (i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to their assets, or (ii) any liquidation, dissolution
or other winding up of any Guarantor, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (iii) any assignment
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for the benefit of creditors or any other marshaling of assets and
liabilities of any Guarantor, then and in any such event specified in (i),
(ii) or (iii) above the holders of such Senior Debt shall be entitled to
receive payment in full in cash of all amounts due or to become due on or in
respect of all such Senior Debt before the Holders of the Securities are
entitled to receive payment or distribution and in any such event any such
Guarantor to which the Holders of the Securities 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, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of such Senior Debt (pro rata to such
holders on the basis of the respective amount of such Senior Debt held by
such holders) or their respective trustee, agent or other representative
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 after giving effect to
any 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 any kind or character, whether in cash, property or
securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 12.03(a) and
before all obligations in respect of the Senior Debt are paid in full in
cash, 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 (pro rata to such holders on the basis of the respective amounts of such
Senior Debt held by such holders) or their respective trustee, agent or other
representative under any agreement or 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 after giving effect to any
concurrent payment, distribution or provision therefor to or for the account
of the holders of such Senior Debt.
The consolidation of any Guarantor with, or the merger of any Guarantor
with or into, another corporation or the liquidation or dissolution of any
Guarantor 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 Five or Section 11.03 shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Five or such Guarantor or successor entity shall be
released from the Guarantee pursuant to the terms of Section 11.03.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Senior Debt of a Guarantor, the
Holders of the 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 such Guarantor made on such Senior Debt until the principal of,
interest (including Additional Interest, if any) on, and all other amounts in
respect of the Securities shall be paid in full in cash; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Debt of any cash, property or securities to which the Holders of
the Securities or the Trustee on their behalf would be entitled except for
the provisions of this Article, and no payment over pursuant to the
provisions of this Article to the holders of such Senior Debt by Holders of
the Securities or the Trustee on their behalf shall, as between such
Guarantor, its creditors other than holders of Senior Debt, and the Holders
of the Securities, be deemed to be a payment by such Guarantor to or on
account of such Senior Debt. It is understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
the Senior Debt of the Guarantors, on the other hand.
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SECTION 12.05. Obligations of Guarantors Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities or the Guarantee is intended to or shall impair, as among the
Guarantors and the Holders of the Securities, the obligation of each
Guarantee, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, interest (including Additional Interest, if any)
on, and all other amounts in respect of the Securities as and when the same
shall become due and payable in accordance with the terms of the Guarantee,
or is intended to or shall affect the relative rights of the Holders of the
Securities and creditors of any Guarantor other than the holders of the
Senior Debt, nor shall anything herein or therein prevent the Holder of any
Security or the Trustee on their behalf from exercising all remedies
otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article of the holders of the
Senior Debt in respect of cash, property or securities of any Guarantor
received upon the exercise of any such remedy.
SECTION 12.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company or a Guarantor which would prohibit the making of any
payment to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article. The Trustee shall not be charged with knowledge
of the existence of any default or event of default with respect to any
Senior Debt of a 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 this Corporate Trust Office to that effect
signed by an Officer of the Company, or by a holder of Senior Debt or
trustee, agent or other representative therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article Seven, be
entitled to assume that no such facts exist; provided that if the Trustee
shall not have received the notice provided for in this Section at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation,
the payment of the principal or interest (including Additional Interest) on
any Security), then, regardless of anything herein to the contrary, the
Trustee shall have full power and authority to receive any moneys from any
Guarantor 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. Nothing contained in this Section 12.06
shall limit the right of the holders of Senior Debt of a Guarantor to recover
payments as contemplated by Section 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 Senior Debt of a Guarantor (or a
trustee, agent or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Debt or a trustee,
agent or other 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 a Guarantor to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt
held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article, 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 payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities of a Guarantor
referred to in this Article, the Trustee and the Holders of the Securities
shall be entitled to rely upon any order or decrees made by any court of
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competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, delivered to the Trustee or to
the Holders of the Securities for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the holders of the
Senior Debt of such Guarantor and other indebtedness of such Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 12.08. Trustee's Relation to Senior Debt of Guarantors.
The Trustee and any Paying Agent shall be entitled to all the rights set
forth in this Article with respect to any Senior Debt of 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 such Senior Debt, 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 a Guarantor's Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of such Senior Debt
shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt of
Guarantors (except as provided in Sections 12.02(b) and 12.03)(b)). 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 Securities or to the
Company or to any other person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or
otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions
of the Guarantors or Holders of Senior Debt of Guarantors.
No right of any present or future holders of any Senior Debt of
Guarantors 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 Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with. The revisions of this Article are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Senior Debt of Guarantors.
SECTION 12.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantees.
Each Holder of Securities by his acceptance of such 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, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, 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 such Guarantor, the filing of a claim for the unpaid
balance of its or his Securities in the form required in those proceedings.
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SECTION 12.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of, or interest
(including Additional Interest) on, or any other amount in respect of the
Securities by reason of any provision of this Article shall not be construed
as preventing the occurrence of an Event of Default under Article Six.
SECTION 12.12. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the holders
of Senior Debt of Guarantors may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of
Senior Debt of Guarantors, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of, or renew or
alter, Senior Debt of Guarantors 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 12.13. Subordination Provisions Not Applicable to Money Held
in Trust for Securityholders; Payments May Be Paid
Prior to Dissolution.
All cash and investments deposited in trust with the Trustee pursuant to
and in accordance with Article Nine shall be for the sole benefit of the
Holders and shall not be subject to this Article Eight.
Nothing contained in this Article or elsewhere in this Indenture shall
prevent (i) a Guarantor, except under the conditions described in Section
12.02, from making payments of principal of, or interest (including
Additional Interest) on, the Securities, or from depositing with the Trustee
any such payments or from effecting a termination of such Guarantor's
obligations under the Guarantee and this Indenture as provided in Article
Nine, or (ii) the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of and interest
(including Additional Interest) on the Securities, to the holders entitled
thereto unless at least two Business Days prior to the date upon which such
payment becomes due and payable and the Trustee shall have received the
written notice provided for in Section 12.02(b) or in Section 12.06.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are required
to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any
TIA provision that may be so modified, such TIA provision shall be deemed to
apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall
be excluded from this Indenture.
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The provisions of TIA Sections 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person, by facsimile, by overnight courier, or mailed by
first-class mail addressed as follows:
if to the Company:
AEP Industries Inc.
125 Phillips Avenue
South Hackensack, NJ 07606
Attention: Vice President - Treasurer
Facsimile: (201) 807-2308
Telephone: (201) 807-2483
with a copy to:
Paul E. Gelbard, Esq.
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, NY 10017
Facsimile: (212) 297-0261
Telephone: (212) 503-2047
if to the Trustee:
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile: (212) 815-5915
Telephone: (212) 815-5735
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when telephonic acknowledgment of receipt is
obtained, if telecopied; and the
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next Business Day after timely delivery to the courier, if sent by overnight
courier promising next Business Day delivery.
Any notice or communication to a Holder shall be mailed, by first class
mail, postage prepaid, or by overnight air courier promising next Business
Day delivery, including any notice delivered in connection with TIA Sections
310(b), 313(c), 314(a) and 315(b), to him at his address as set forth on the
registration books of the Registrar and shall be sufficiently given to him if
so mailed within the time prescribed. To the extent required by the TIA, any
notice or communication shall also be mailed to any Person described in TIA
Section 313(c).
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is given in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with;
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; and
(3) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with
TIA Section 314(c).
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
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(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however, that
with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture, the
Securities and the Guarantee without regard to principles of conflicts of law.
SECTION 13.08. No Recourse Against Others.
No director, officer, employee or stockholder of the Company or any of
its Subsidiaries, as such, shall have any liability for any obligations of
the Company or any Guarantor under the Securities, this Indenture, the
Guarantees or any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Securities.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of each Guarantor in this Indenture and
the Guarantee of such Guarantor shall bind its successor. All agreements of
the Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart 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.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
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, and a Holder shall have no claim therefor
against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is not a Business Day at a place of payment, payment may
be made at that place on the next succeeding Business Day, and no interest shall
accrue for the intervening period.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
AEP INDUSTRIES INC.
By:______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:______________________________
Name:
Title:
<PAGE>
EXHIBIT A
AEP INDUSTRIES INC.
CUSIP No.
No. $
9.875% SENIOR SUBORDINATED NOTE DUE 2007
AEP INDUSTRIES INC. promises to pay to CEDE & CO. or registered assigns
the principal sum of ___________ Dollars on November 15, 2007.
Interest Payment Dates: May 15 and November 15, beginning May 15, 1998.
Record Dates: May 1 and November 1, beginning May 1, 1998.
IN WITNESS WHEREOF, AEP INDUSTRIES INC. has caused this instrument to be
executed by duly authorized officers.
AEP INDUSTRIES INC.
By: __________________________________________
Name:
Title:
Dated: By: __________________________________________
Name:
Title:
Certificate of Authentication:
This is one of the 9.875% Senior Subordinated Notes due 2007 referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By_____________________ Date:
Authorized Signatory
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(REVERSE OF SECURITY)
AEP INDUSTRIES INC.
9.875% Senior Subordinated Note due 2007
1. Interest.
AEP Industries Inc., a Delaware corporation (the "Company"), promises to
pay interest at the rate of 9.875% per annum on the principal amount of this
Security semiannually commencing on May 15, 1998, until the principal hereof
is paid or made available for payment. Interest on the Securities will accrue
from and including the most recent date to which interest has been paid or,
if no interest has been paid, from and including November 19, 1997, through
but excluding the date on which interest is paid. If an Interest Payment Date
falls on a day that is not a Business Day, the interest payment to be made on
such Interest Payment Date will be made on the next succeeding Business Day
with the same force and effect as if made on such Interest Payment Date, and
no additional interest will accrue as a result of such delayed payment.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture
(as defined below), be paid to the Person in whose name this Security is
registered at the close of business on the regular record date, which shall
be the May 1 or November 1 (whether or not a Business Day) next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the person in whose name this
Security is registered at the close of business on a special record date for
the payment of such defaulted interest to be fixed by the Company, notice of
which shall be given to Holders not less than 15 days prior to such special
record date. Payment of the principal of and interest on this Security will
be made at the agency of the Company maintained for that purpose in New York,
New York and at any other office or agency maintained by the Company for such
purpose, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security register.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying Agent
and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders of Securities. The Company or any
of its Subsidiaries may act as Registrar or co-Registrar but may not act as
Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities of the
Company, designated as its 9.875% Senior Subordinated Notes due 2007 (the
"Securities"), limited in aggregate principal amount to $200,000,000 (except
for Securities issued in substitution for destroyed, lost or stolen
Securities) issuable under an indenture
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dated as of November 19, 1997 (the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by the Trust Indenture Act of 1939 (the
"Act") (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and the Act for a statement of them.
Each Securityholder, by accepting a Security, agrees to be bound to all of
the terms and provisions of the Indenture, as the same may be amended from
time to time. Payment on each Security is guaranteed on a senior subordinated
basis, jointly and severally, by the Guarantors pursuant to Article Eleven of
the Indenture.
The Securities are subordinated in right of payment to all Senior Debt
of the Company to the extent and in the manner provided in the Indenture.
Each Holder of a Security, by accepting a Security, agrees to such
subordination, authorizes the Trustee to give effect to such subordination
and appoints the Trustee as attorney-in-fact for such purpose.
Capitalized terms contained in this Security to the extent not defined
herein shall have the meanings assigned to them in the Indenture.
5. Optional Redemption.
The Securities will be subject to redemption, at the option of the
Company, in whole or in part, at any time on or after November 15, 2002 and
prior to maturity, upon not less than 30 nor more than 60 days' notice mailed
to each Holder of Securities to be redeemed, in amounts of $1,000 or an
integral multiple of $1,000, at the following redemption prices (expressed as
percentages of principal amount), plus accrued interest to but excluding the
date fixed for redemption (subject to the right of Holders on the relevant
Record Date to receive interest due on an interest payment date that occurs
on or prior to the date fixed for redemption), if redeemed during the
12-month period beginning November 15 the years indicated:
Year Percentage
2002 104.9375
2003 103.2917
2004 101.6459
2005 and thereafter 100.0000
In addition, prior to November 15, 2000, the Company may redeem up to
35% of the Securities originally issued with the net cash proceeds received
by the Company from one or more Equity Offerings, at a redemption price equal
to 109.875% of the principal amount thereof, plus accrued and unpaid interest
to the date fixed for redemption; provided, however, that at least $100
million in aggregate principal amount of Securities remains outstanding
immediately after any such redemption (excluding any Securities owned by the
Company or any of its Affiliates). Notice of redemption described in this
paragraph must be mailed to Holders of Securities not later than 60 days
following the consummation of the relevant Equity Offering.
Selection of Securities for any partial redemption shall be made by the
Trustee, in accordance with the rules of any national securities exchange on
which the Securities may be listed or, if the Securities are not so listed,
pro rata or by lot or in such other manner as the Trustee shall deem
appropriate and fair. Securities in denominations larger than $1,000 may be
redeemed in part but only in integral multiples of $1,000. Notice of
redemption will be mailed before the date fixed for redemption to each Holder
of Securities to be redeemed at
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his or her registered address. On and after the date fixed for redemption,
interest will cease to accrue on Securities or portions thereof called for
redemption.
The Securities will not have the benefit of any sinking fund.
6. Offer to Purchase upon Occurrence of a Change of Control.
Within 30 days following a Change of Control, the Company will offer to
purchase the Securities at a purchase price equal to 101% of the principal
amount thereof plus any accrued and unpaid interest thereon.
7. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest ceases to accrue on those Securities or portion of
them called for redemption.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not transfer or exchange any Securities
selected for redemption.
9. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
10. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee or Paying Agent will repay the funds to the Company at
its request. After such repayment Holders of Securities entitled to such
funds must look to the Company for payment unless an abandoned property law
designates another person.
11. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and canceled except for certain
Sections thereof, subject to the terms of the Indenture, upon the payment of
all the Securities or upon the irrevocable deposit with the Trustee of funds
or United States Government Obligations sufficient for such payment or
redemption.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a
majority in principal
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amount of the outstanding Securities, and any past default or compliance with
any provision may be waived with the consent of the Holders of a majority in
principal amount of the outstanding Securities. Without notice to or the
consent of any Holder, the Company, the Guarantors and the Trustee may amend
or supplement the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, or to make any change that does not adversely affect the
rights of any Holder of Securities.
13. Restrictive Covenants.
The Indenture restricts, among other things, the ability of the Company
or any Restricted Subsidiary to permit any Liens to be imposed on their
assets, to make certain Restricted Payments and Investments, limits the
Indebtedness which the Company or any Restricted Subsidiary may incur and
limits the terms on which the Company may engage in certain Asset
Dispositions. The Company is also obligated under certain circumstances to
make an offer to purchase Securities with the net cash proceeds of certain
Asset Dispositions. The Company must report quarterly to the Trustee on
compliance with the covenants in the Indenture.
14. Successor Corporation.
Pursuant to the Indenture, the ability of the Company to consolidate
with, merge with or into or transfer its assets to another person is
conditioned upon certain requirements, including certain financial
requirements applicable to the surviving Person.
15. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the principal of
all of the outstanding Securities, plus all accrued and unpaid interest, if
any, to the date the Securities become due and payable, may be declared due
and payable in the manner and with the effect provided in the Indenture.
16. Trustee Dealings with Company.
The Trustee in its individual or any other capacity, may become the
owner or pledgee of Securities and make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not Trustee.
17. No Recourse Against Others.
No director, officer, employee or stockholder, as such, of the Company
or any of its Subsidiaries shall have any liability for any obligations of
the Company or any Guarantor under the Securities, the Guarantee or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Security.
19. Abbreviations.
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Customary abbreviations may be used in the name of Securityholder or an
assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to
be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture and this
Security and the Guarantee without regard to principles of conflicts of law.
The Company will furnish to any Holder of record of Securities upon
written request and without charge a copy of the Indenture.
A-6
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[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor(s) (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby, jointly and severally,
unconditionally guarantee on a senior subordinated basis (such guarantee by
each Guarantor being referred to herein as the "Guarantee") the due and
punctual payment of the principal of, premium, if any, and interest on the
Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest,
if any, on the Securities, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee, all in accordance
with the terms set forth in Article Eleven of the Indenture.
The obligations of each Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth, and are expressly subordinated and subject in right of payment to the
prior payment in full of all Senior Debt of such Guarantor, to the extent and
in the manner provided, in Article Twelve of the Indenture, and reference is
hereby made to such Indenture for the precise terms of the Guarantee therein
made.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of
law.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
[GUARANTORS]
By:____________________________________________
Name:
Title:
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<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code and social security
or tax ID number of assignee)
and irrevocably appoint _____________________________________, agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated:__________________ Signed:____________________________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:__________________________________________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you the Holder want to elect to have this Security purchased by the
Company, check the box: / /
If you want to elect to have only part of this Security purchased
by the Company, state the amount: $
Dated:____________________ Your signature:________________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee:__________________________________________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
AEP INDUSTRIES INC.
125 Phillips Avenue
South Hackensack, NJ 07606
Attention:
[Name and Address of Registrar]
Re: 9.875% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of November 19, 1997
(the "Indenture"), between AEP Industries Inc. (the "Company") and The Bank
of New York, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
________________, (the "Transferor") owns and proposes to transfer the
Security[s] specified in Annex A hereto in the principal amount of $___ in
such Security[s] (the "Transfer"), to ________ (the "Transferee"), as further
specified in Annex A hereto. In the event that Transferor holds Physical
Securities, this Certificate is accompanied by one or more certificates
aggregating at least the principal amount of Securities proposed to be
Transferred. In connection with the Transfer, the Transferor hereby
certifies that:
1. / / Check if Transferee will take an Interest in the 144A Global
Security. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the Securities are being transferred to a Person that the Transferor
reasonably believes is purchasing the Securities for its own account, or for
one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred Security will be subject to the restrictions on
transfer enumerated in the Securities Act Legend and in the Indenture and the
Securities Act.
2. / / Check if Transferee will take an Interest in the Regulation S Global
Security pursuant to Regulation S. The Transfer is being effected pursuant to
and in accordance with Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a
person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 904(b) of
Regulation S under the Securities Act and (iii) the transaction is not part of a
plan or scheme to evade the registration requirements of the Securities Act.
Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the Security will be subject to the restric-
B1
<PAGE>
tions on Transfer enumerated in the Securities Act Legend printed on the
Regulation S Global Security and in the Indenture and the Securities Act.
3. / / Check and complete if Transferee will take delivery of a Restricted
Physical Security pursuant to Rule 144A or Regulation S. One or more of the
events specified in Section 2.06(a) of the Indenture have occurred and the
Transfer is being effected in compliance with the transfer restrictions
applicable to Securities bearing the Securities Act Legend and pursuant to
and in accordance with the Securities Act, and accordingly the Transferor
hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in accordance
with Rule 144A under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 1 above; or
(b) / / such Transfer is being effected pursuant to and in accordance
with Rule 904 under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 2 above.
4. / / Check if Transferee will take an Interest in the Unrestricted Global
Security The Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture, and the restrictions on transfer
contained in the Indenture and the Securities Act Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of
the proposed Transfer in accordance with the terms of the Indenture, the
transferred Securities will no longer be subject to the restrictions on
transfer enumerated in the Securities Act Legend and in the Indenture and the
Securities Act.
5. / / Check if Transferee will take an Interest in the Physical Global
Security that does not bear the Securities Act Legend One or more of the
events specified in Section 2.06(a) of the Indenture have occurred and the
Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture, and the restrictions on transfer contained in the Indenture
and the Securities Act Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
Securities will no longer be subject to the restrictions on transfer
enumerated in the Securities Act Legend and in the Indenture and the
Securities Act.
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<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
___________________________
[Insert Name of Transferor]
By: __________________________
Name:
Title:
Dated:_________________
B3
<PAGE>
FORM OF ANNEX A TO CERTIFICATE
OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / Interests in the
(i) / / 144A Global Security (CUSIP _____), or
(ii) / / Regulation S Global Security (CINS _____).
(b) / / Physical Security.
2. That the Transferee will hold:
[CHECK ONE]
(a) / / Interests in the:
(i) / / 144A Global Security (CUSIP _____), or
(ii) / / Regulation S Global Security (CINS _____), or
(iii) / / Unrestricted Global Security (CUSIP _____); or
(b) / / Physical Securities that bear the Securities Act Legend;
(c) / / Physical Securities that do not bear the Securities Act Legend;
in accordance with the terms of the Indenture.
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
AEP INDUSTRIES INC.
125 Phillips Avenue
South Hackensack, NJ 07606
Attention:
[Name and Address of Registrar]
Re: 9.875% Senior Subordinated Notes due 2007
(CUSIP _______________)
Reference is hereby made to the Indenture, dated as of November 19, 1997
(the "Indenture"), between AEP Industries Inc. (the "Company") and The Bank
of New York, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
__________, (the "Holder") owns and proposes to exchange the Security[s]
specified herein, in the principal amount of $___ in such Security[s] (the
"Exchange"). In the event Holder holds Physical Securities, this Certificate
is accompanied by one or more certificates aggregating at least the principal
amount of Securities proposed to be Exchanged. In connection with the
Exchange, the Holder hereby certifies that:
1. Exchange of Restricted Physical Securities or Interests in the Initial
Global Security for Physical Securities that do not bear the Securities Act
Legend or Unrestricted Global Securities
(a) / / Check if Exchange is from Initial Global Securities to the
Unrestricted Global Security. In connection with the Exchange of the
Holder's Initial Global Security to the Unrestricted Global Security in an
equal principal amount, the Holder hereby certifies (i) the Unrestricted
Global Securities are being acquired for the Holder's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Initial Global Securities and
pursuant to and in accordance with the Securities Act of 1933, as amended
(the "Securities Act") and (iii) the restrictions on transfer contained in
the Indenture and the Securities Act Legend are not required in order to
maintain compliance with the Securities Act.
(b) / / Check if Exchange is from Restricted Physical Securities to an
Interest in the Unrestricted Global Security. In connection with the
Holder's Exchange of Restricted Physical Securities for Interest in the
Unrestricted Global Security, (i) the Interest in the Unrestricted Global
Security are being acquired for the Holder's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Physical Securities and pursuant to and
in accordance with the Securities Act and (iii) the restrictions on transfer
contained in the Indenture and the Securities Act Legend are not required in
order to maintain compliance with the Securities Act.
(c) / / Check if Exchange is from Restricted Physical Securities to
Physical Securities that do not bear the Securities Act Legend. In
connection with the Holder's Exchange of a Restricted Physical
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<PAGE>
Security for Physical Securities that do not bear the Securities Act Legend,
the Holder hereby certifies (i) the Physical Securities that do not bear the
Securities Act Legend are being acquired for the Holder's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Physical Securities and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Securities Act Legend are not
required in order to maintain compliance with the Securities Act and (iv) one
or more of the events specified in Section 2.06(a) of the Indenture have
occurred.
2. / / Check if Exchange is from Restricted Physical Securities to
Interests in an Initial Global Security. In connection with the Exchange of
the Holder's Restricted Physical Security for interests in an Initial Global
Security [[CHECK ONE] 144A Global Security, Regulation S Global Security],
with an equal principal amount, (i) the interests in the Initial Global
Security are being acquired for the Holder's own account without transfer and
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Physical Security and pursuant to
and in accordance with the Securities Act. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Initial Global
Security issued will be subject to the restrictions on transfer enumerated in
the Securities Act Legend printed on the Initial Global Securities and in the
Indenture and the Securities Act.
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<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
___________________________________
[Insert Name of Holder]
By: _______________________________
Name:
Title:
Dated: __________________
C3
