<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OCTOBER 8, 1997
- --------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
COINMACH CORPORATION
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 333-0062 53-0188589
- -------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) number)
55 LUMBER ROAD, ROSLYN, NEW YORK 11576
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(516) 484-2300
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Exhibit Index is located on Page 4
Page 1 of 163.
<PAGE>
Item 5. Other Events.
- ---------------------
On October 8, 1997, Coinmach Corporation (the "Company"), a wholly-owned
subsidiary of Coinmach Laundry Corporation, consummated a private placement (the
"Offering) of $100,000,000 aggregate principal amount of its 11 3/4% Series C
Senior Notes due 2005 on substantially identical terms as its outstanding Series
B 11 3/4% Senior Notes due 2005 (the "Series B Notes"). Substantially all of the
proceeds of the Offering were applied to reduce a portion of the Company's
outstanding borrowings under its senior credit facility.
Contemporaneously with the Offering, the Company solicited consents from
holders of the Series B Notes pursuant to the terms of a consent solicitation
statement (the "Consent Solicitation Statement") to amend (the "Amendment") the
indenture governing the Series B Notes (the "Indenture") to modify the covenant
restricting the Company's ability to incur debt. The completion of the Offering
was not conditioned upon the effectiveness of the Amendment. The Amendment,
which provides additional flexibility under the Consolidated Fixed Charge
Coverage Ratio (as defined in the Indenture), permits the incurrence of
additional indebtedness for a period of twenty-four months provided that, among
other things, the Company's Consolidated Fixed Charge Coverage Ratio exceeds
2.10 to 1.00 (instead of 2.25 to 1.00 as previously required under the
Indenture).
The consent solicitation with respect to the Amendment expired at 5:00
p.m., New York City time, on October 7, 1997, on or prior to which time the
Company had received consents from holders of $192,043,000 outstanding principal
amount of Series B Notes, constituting at least a majority of the consents
required to give effect to the Amendment. Holders of Series B Notes that validly
tendered an accepted consent form on or prior to 5:00 p.m., New York City time
on October 14, 1997 in accordance with the terms of the Consent Solicitation
Statement were entitled to receive a consent fee in an amount of $8.75 per
$1,000 principal amount of Series B Notes (the "Consent Fee"). As of 5:00 p.m.,
New York City time on October 14, 1997, there were $196,655,000 principal amount
of Series B Notes outstanding, and the Company had received valid consents from
holders of $196,647,000 principal amount of Series B Notes.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- ---------------------------------------------------------------------------
c. Exhibits.
--------
The following exhibits are filed as part of this report.
4.1 Indenture, dated as of October 8, 1997, by and between the
Company and State Street Bank and Trust Company
10.1 Purchase Agreement, dated as of October 1, 1997, by and
among the Company, Jefferies & Company, Inc., Lazard Freres
& Co., LLC, BT Alex. Brown Incorporated and First Union
Capital Markets Corp.
10.2 Registration Rights Agreement, dated October 8, 1997, by and
among the Company, Jefferies & Company, Inc., Lazard Freres
& Co., LLC, BT Alex. Brown Incorporated and First Union
Capital Markets Corp.
10.3 Second Supplemental Indenture, dated as of October 8, 1997
(Supplemental to Indenture dated as of November 30, 1995)
from the Company to State Street Bank and Trust Company
10.4 Amendment Number Two and Waiver, dated as of October 7,
1997, to the Credit Agreement dated as of January 8, 1997 as
amended by Amendment No. 1 dated as of June 2, 1997, among
the Company, Coinmach Laundry Corporation, the lending
institutions from time to time party thereto, Bankers Trust
Company, First Union National Bank of North Carolina and
Lehman Commercial Paper, Inc.
99.1 Press release, dated October 7, 1997
99.2 Press release, dated October 8, 1997
Page 2 of 163
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 21, 1997
COINMACH CORPORATION
By: /s/ ROBERT M. DOYLE
--------------------------
Robert M. Doyle
Senior Vice President
Page 3 of 163
<PAGE>
EXHIBIT INDEX
EXHIBIT
- ------- PAGE
NUMBER DOCUMENT NUMBER
- ------- -------- ------
4.1 Indenture, dated as of October 8, 1997,
by and between the Company and State
Street Bank and Trust Company 5
10.1 Purchase Agreement, dated as of October 1,
1997, by and among the Company, Jefferies &
Company, Inc., Lazard Freres & Co., LLC, BT
Alex. Brown Incorporated and First Union
Capital Markets Corp. 98
10.2 Registration Rights Agreement, dated October
8, 1997, by and among the Company, Jefferies
& Company, Inc., Lazard Freres & Co., LLC,
BT Alex. Brown Incorporated and First Union
Capital Markets Corp. 125
10.3 Second Supplemental Indenture, dated as of
October 8, 1997 (Supplemental to Indenture
dated as of November 30, 1995) from the
Company to State Street Bank and Trust
Company 139
10.4 Amendment Number Two and Waiver, dated as of
October 7, 1997, to the Credit Agreement dated
as of January 8, 1997 as amended by Amendment
No. 1 dated as of June 2, 1997, among the
Company, Coinmach Laundry Corporation, the
lending institutions from time to time party
thereto, Bankers Trust Company, First Union
National Bank of North Carolina and Lehman
Commercial Paper, Inc. 143
99.1 Press Release, dated October 7, 1997 162
99.2 Press Release, dated October 8, 1997 163
Page 4 of 163
<PAGE>
EXHIBIT 4.1
_______________________________________________________________________________
_____________________________________________________________________________
COINMACH CORPORATION,
as Issuer,
and
STATE STREET BANK AND TRUST COMPANY
as Trustee
_____________________
INDENTURE
Dated as of October 8, 1997
____________________
$100,000,000
11 3/4% Series C Senior Notes due 2005
and
$296,655,000
11 3/4% Series D Senior Notes due 2005
_______________________________________________________________________________
_____________________________________________________________________________
Page 5 of 163
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
-----------
310(a)(1) ..............................................................7.10
(a)(2)..............................................................7.10
(a)(3)..............................................................N.A.
(a)(4)..............................................................N.A.
(a)(5)........................................................7.08; 7.10
(b) .......................................................7.08; 7.10;
10.02
(c) ..............................................................N.A.
311(a) ..............................................................7.11
(b) ..............................................................7.11
(c) ..............................................................N.A.
312(a) ..............................................................2.05
(b) .............................................................10.03
(c) .............................................................10.03
313(a) ..............................................................7.06
(b)(1)..............................................................N.A.
(b)(2)..............................................................7.06
(c) .......................................................7.06; 10.02
(d) ..............................................................7.06
314(a) .......................................................4.07; 4.08;
10.02
(b) ..............................................................N.A.
(c)(1).............................................................10.04
(c)(2).............................................................10.04
(c)(3)..............................................................N.A.
(d) ..............................................................N.A.
(e) .............................................................10.05
(f) ..............................................................N.A.
315(a) ...........................................................7.01(b)
(b) .......................................................7.05; 10.02
(c) ...........................................................7.01(a)
(d) ...........................................................7.01(c)
(e) ..............................................................6.11
316(a)(last sentence).................................................... 2.09
(a)(1)(A).......................................................... 6.05
(a)(1)(B).......................................................... 6.04
(a)(2)..............................................................N.A.
(b) ..............................................................6.07
(c) ..............................................................9.04
i
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317(a)(1) ..............................................................6.08
(a)(2)..............................................................6.09
(b) ..............................................................2.04
318(a) .............................................................10.01
(c) .............................................................10.01
________________________________
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
Section 1.01 Definitions................................................1
Section 1.02 Incorporation by Reference of TIA.........................19
Section 1.03 Rules of Construction.....................................19
ARTICLE II
THE NOTES
---------
Section 2.01 Principal Amount, Form and Dating.........................20
Section 2.02 Execution and Authentication; Aggregate Principal Amount..21
Section 2.03 Registrar and Paying Agent................................21
Section 2.04 Paying Agent To Hold Assets in Trust......................22
Section 2.05 Holder Lists..............................................22
Section 2.06 Transfer and Exchange.....................................22
Section 2.07 Replacement Notes.........................................23
Section 2.08 Outstanding Notes.........................................23
Section 2.09 Treasury Notes............................................24
Section 2.10 Temporary Notes...........................................24
Section 2.11 Cancellation..............................................24
Section 2.12 CUSIP Number..............................................24
Section 2.13 Deposit of Moneys.........................................25
Section 2.14 Book-Entry Provisions for Global Note.....................25
Section 2.15 Special Transfer Provisions...............................26
ARTICLE III
REDEMPTION
----------
Section 3.01 Notices to Trustee........................................28
Section 3.02 Selection of Notes To Be Redeemed.........................28
Section 3.03 Notice of Redemption......................................28
Section 3.04 Effect of Notice of Redemption............................29
Section 3.05 Deposit of Redemption Price...............................29
Section 3.06 Notes Redeemed in Part....................................30
i
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ARTICLE IV
COVENANTS
---------
Section 4.01 Payment of Notes..........................................30
Section 4.02 Maintenance of Office or Agency...........................30
Section 4.03 Corporate Existence.......................................30
Section 4.04 Payment of Taxes and other Claims.........................31
Section 4.05 Maintenance of Properties and Insurance...................31
Section 4.06 Compliance Certificate; Notice of Default.................31
Section 4.07 Compliance with Laws......................................32
Section 4.08 Reports...................................................32
Section 4.09 Waiver of Stay, Extension or Usury Laws...................33
Section 4.10 Limitation on Restricted Payments.........................33
Section 4.11 Limitation on Transactions with Affiliates................35
Section 4.12 Limitation on Incurrence of Additional Indebtedness.......36
Section 4.13 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries....................................36
Section 4.14 Limitation on Sale and Leaseback Transactions.............36
Section 4.15 Limitation on Change of Control...........................37
Section 4.16 Limitation on Asset Sales.................................38
Section 4.17 Limitation on Preferred Stock of Subsidiaries.............41
Section 4.18 Limitation on Liens.......................................41
Section 4.19 Conduct of Business.......................................42
ARTICLE V
SUCCESSOR CORPORATION
---------------------
Section 5.01 Merger, Consolidation and Sale of Assets..................42
Section 5.02 Successor Corporation Substituted.........................43
ARTICLE VI
DEFAULT AND REMEDIES
--------------------
Section 6.01 Events of Default.........................................44
Section 6.02 Acceleration..............................................45
Section 6.03 Other Remedies............................................46
Section 6.04 Waiver of Past Defaults...................................46
Section 6.05 Control by Majority.......................................46
Section 6.06 Limitation on Suits.......................................46
Section 6.07 Rights of Holders To Receive Payment......................47
Section 6.08 Collection Suit by Trustee................................47
Section 6.09 Trustee May File Proofs of Claim..........................47
Section 6.10 Priorities................................................48
ii
<PAGE>
Section 6.11 Undertaking for Costs.....................................48
ARTICLE VII
TRUSTEE
-------
Section 7.01 Duties of Trustee.........................................49
Section 7.02 Rights of Trustee.........................................50
Section 7.03 Individual Rights of Trustee..............................51
Section 7.04 Trustee's Disclaimer......................................51
Section 7.05 Notice of Default.........................................51
Section 7.06 Reports by Trustee to Holders.............................51
Section 7.07 Compensation and Indemnity................................51
Section 7.08 Replacement of Trustee....................................52
Section 7.09 Successor Trustee by Merger, Etc..........................53
Section 7.10 Eligibility: Disqualification.............................53
Section 7.11 Preferential Collection of Claims Against Company.........54
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
Section 8.01 Legal Defeasance and Covenant Defeasance..................54
Section 8.02 Satisfaction and Discharge................................56
Section 8.03 Survival of Certain Obligations...........................57
Section 8.04 Acknowledgment of Discharge by Trustee....................57
Section 8.05 Application of Trust Moneys...............................57
Section 8.06 Repayment to the Company; Unclaimed Money.................58
Section 8.07 Reinstatement.............................................58
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
-----------------------------------
Section 9.01 Without Consent of Holders................................58
Section 9.02 With Consent of Holders...................................59
Section 9.03 Compliance with TIA.......................................60
Section 9.04 Revocation and Effect of Consents.........................60
Section 9.05 Notation on or Exchange of Notes..........................61
Section 9.06 Trustee To Sign Amendments, Etc...........................61
iii
<PAGE>
ARTICLE X
MISCELLANEOUS
-------------
Section 10.01 TIA Controls.............................................61
Section 10.02 Notices..................................................62
Section 10.03 Communications by Holders with Other Holders.............62
Section 10.04 Certificate and Opinion as to Conditions Precedent.......63
Section 10.05 Statements Required in Certificate or Opinion............63
Section 10.06 Rules by Trustee, Paying Agent, Registrar................63
Section 10.07 Legal Holidays...........................................63
Section 10.08 Governing Law............................................64
Section 10.09 No Adverse Interpretation of Other Agreements............64
Section 10.10 No Recourse Against Others...............................64
Section 10.11 Successors...............................................64
Section 10.12 Duplicate Originals......................................64
Section 10.13 Severability.............................................64
Exhibit A Form of Initial Note
Exhibit B Form of Exchange Note
Exhibit C Form of Legend for Global Notes
Exhibit D Form of Certificate To Be Delivered in Connection with Transfers to
Non-QIB Accredited Investors
Exhibit E Form of Certificate To Be Delivered in Connection with Transfers
Pursuant to Regulation S
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
iv
<PAGE>
INDENTURE, dated as of October 8, 1997, between Coinmach Corporation, a
Delaware corporation (the "Company"), and State Street Bank and Trust Company,
as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11 3/4% Series
C Senior Notes due 2005 and 11 3/4% Series D Senior Notes due 2005 and, to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Notes (as hereinafter
defined), when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, have been done.
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 Notes.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
Section 1.01 Definitions.
-----------
"Acceleration Notice" has the meaning provided in section 6.02(a).
-------------------
"Acquired Indebtedness" means Indebtedness of a Person or any of its
---------------------
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, and which Indebtedness is without recourse to the
Company or any of its Subsidiaries or to any of their respective properties or
assets other than the Person or the assets to which such Indebtedness related
prior to the time such Person becomes a Restricted Subsidiary of the Company or
the time of such acquisition, merger or consolidation.
"Additional Series D Senior Notes" means any Exchange Notes issued in
--------------------------------
exchange for the Series A/B Notes pursuant to the Exchange Offer.
"Affiliate" means, with respect to any specified Person, any other Person
---------
who directly or indirectly through one or more intermediaries controls or is
controlled by, or is under common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
---------------------
"Agent" means any Registrar, Paying Agent or co-Registrar.
-----
"Agent Members" has the meaning provided in Section 2.14.
-------------
1
<PAGE>
"Asset Acquisition" means (a) an Investment by the Company or any
-----------------
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprise any division or line of business of
such Person or any other properties or assets of such Person other than in the
ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
----------
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Restricted Subsidiary of the Company; or
(b) any other property or assets of the Company or any Restricted Subsidiary of
the Company other than in the ordinary course of business; provided, however,
that Asset Sales shall not include (i) a transaction or series of related
transactions for which the Company or its Restricted Subsidiaries receive
aggregate consideration of less than $250,000 and (ii the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted under Section 5.01.
"Authenticating Agent" has the meaning provided in Section 2.02.
--------------------
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
--------------
foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
------------------
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
------------
"Capital Stock" means (i) with respect to any Person that is a corporation,
-------------
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including each class
of Common Stock and Preferred Stock of such Person and (ii with respect to any
Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
----------------------------
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
2
<PAGE>
"Cash Equivalents" means (i) marketable direct obligations issued by, or
----------------
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Moody's Investors
Service, Inc.; (ii commercial paper maturing no more than one year from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from Standard & Poor's Corporation or at least P-1 from Moody's Investors
Service, Inc.; (iv certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than
$250,000,000; (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv) above;
and (vi investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
-----------------
events: (i) any Person or "Group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of a
majority of the total outstanding Voting Stock of Coinmach Laundry or the
Company; provided that the Permitted Holders "beneficially own" (as so defined)
a lesser percentage of such Voting Stock than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company; (ii
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of Coinmach Laundry or the
Company (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of Coinmach
Laundry or the Company, was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of such Board of Directors then in
office; provided, however, there shall be no Change of Control pursuant to this
clause (ii) if during such two-year period the Permitted Holders continue to
own, directly or indirectly, a majority of the Voting Stock of the Company; or
(ii any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of Coinmach
Laundry or the Company to any Person or Group, together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture) that are not controlled, directly or indirectly, by the Permitted
Holders.
"Change of Control Date" has the meaning provided in Section 4.15(b).
----------------------
"Change of Control Offer" has the meaning provided in Section 4.15(a).
-----------------------
3
<PAGE>
"Coinmach Laundry" means Coinmach Laundry Corporation, a Delaware
----------------
corporation, which is the parent of the Company.
"Change of Control Payment Date" has the meaning provided in Section
------------------------------
4.15(b).
"Common Stock" of any Person means any and all shares, interest or other
------------
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a successor
-------
replaces it pursuant to this Indenture and thereafter means such successor.
"Consolidated EBITDA" means, with respect to any Person, for any period,
-------------------
the sum (without duplication) of (i) Consolidated Net Income plus (ii to the
extent that any of the following shall have been taken into account in
determining Consolidated Net Income, (A) all income taxes of such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such period
(other than income taxes attributable to extraordinary, unusual or nonrecurring
gains or losses or taxes attributable to sales or dispositions of assets outside
the ordinary course of business), (B) Consolidated Interest Expense,
amortization expense and depreciation expense, and (C) Consolidated Non-cash
Charges less other non-cash items increasing Consolidated Net Income for such
----
period, all as determined on a consolidated basis for such Person and its
Restricted Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
----------------------------------------
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction or event giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed
Charges of such Person for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated
EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect
on a pro forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds therefrom) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds therefrom), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, at any time
subsequent to the first day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period, and (ii any Asset Sales or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of any
such Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness at any time subsequent to the first day of the Four
Quarter Period and on or prior to the Transaction Date), as if such Asset Sale
or Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness and also including any Consolidated
EBITDA associated with such Asset Acquisition) occurred on the first
4
<PAGE>
day of the Four Quarter Period; provided that the Consolidated EBITDA of any
Person acquired shall be included only to the extent includable pursuant to the
definition of "Consolidated Net Income." If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on Indebtedness determined on a fluctuating
basis as of the Transaction Date (including Indebtedness actually incurred on
the Transaction Date) and which will continue to be so determined thereafter
shall be deemed to have accrued at a fixed rate per annum equal to the rate of
interest on such Indebtedness in effect on the Transaction Date; and (2)
notwithstanding clause (1) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating
to Interest Swap Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
--------------------------
period, the sum, without duplication, of (i) Consolidated Interest Expense
(including amortization or write-off of deferred financing costs of such Person
and its consolidated Restricted Subsidiaries during such period and any premium
or penalty paid in connection with redeeming or retiring Indebtedness of such
Person and its consolidated Restricted Subsidiaries prior to the stated maturity
thereof pursuant to the agreements governing such Indebtedness, other than (A)
deferred financing costs incurred by the Company or any of its Restricted
Subsidiaries in connection with the Merger or (B) any premium or penalty paid on
the Series A/B Issue Date in connection with the redemption of the Company's 12
3/4% Senior Notes due 2001 or the Company's 13 3/4% Senior Subordinated
Debenture due 2002), 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.
"Consolidated Interest Expense" means, with respect to any Person for any
-----------------------------
period, the aggregate of the interest expense of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, as determined in
accordance with GAAP, and including, without duplication, (a) all amortization
of original issue discount; (b) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period; (c) net cash costs under all
Interest Swap Obligations (including amortization of fees); (d) all capitalized
interest; and (e) the interest portion of any deferred payment obligations for
such period.
"Consolidated Net Income" means, with respect to any Person, for any
-----------------------
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom (a) after-tax gains
and losses from Asset Sales or abandonments or reserves relating thereto, (b)
after-tax items classified as extraordinary or nonrecurring gains, (c) the net
income of any Person acquired in a "pooling of interests" transaction accrued
prior to the date it becomes a Restricted Subsidiary
5
<PAGE>
of the referent Person or is merged or consolidated with the referent Person or
any Restricted Subsidiary of the referent Person, (d) the net income (but not
loss) of any Restricted Subsidiary of the referent Person to the extent that the
declaration of dividends or similar distributions by that Restricted Subsidiary
of that income is restricted by a contract, operation of law or otherwise, (e)
the net income of any Person, other than a Restricted Subsidiary of the referent
Person, except to the extent of cash dividends or distributions paid to the
referent Person or to a Wholly-Owned Restricted Subsidiary of the referent
Person by such Person, (f) any restoration to income of any material contingency
reserve, except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Series A/B Issue Date,
(g) income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such
operations were classified as discontinued), (h) all gains and losses realized
on or because of the purchase or other acquisition by such Person or any of its
Restricted Subsidiaries of any securities of such person or any of its
Restricted Subsidiaries, (i) relocation, severance and other employee costs not
to exceed $2,000,000 incurred in connection with the Merger, (j) any other
restructuring reserves or charges (provided, however, that any cash payments
actually made after the Series A/B Issue Date with respect to liabilities for
which such restructuring reserves or charges were created shall be deducted from
Consolidated Net Income in the period when made), in each case, incurred by the
Company or any of its Restricted Subsidiaries in connection with the Merger, (k)
all non-cash depreciation and amortization charges (excluding the amortization
of goodwill) resulting from purchase accounting adjustments with respect to
transactions prior to the Series A/B Issue Date and (1) in the case of a
successor to the referent Person by consolidation or merger or as a transferee
of the referent Person's assets, any earnings of the successor corporation prior
to such consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
----------------------
equity of such Person, determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to Disqualified Capital
Stock of such Person.
"Consolidated Net Tangible Assets" means, with respect to any Person, as at
--------------------------------
any date, the total amount of assets of such Person and its Restricted
Subsidiaries and after deducting therefrom (i) all current liabilities, (ii)
appropriate adjustments on account of minority interests of other Persons
holding shares of Capital Stock of any Subsidiary of the referent Person and
(iii) all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense and all other like intangibles, all as set forth on the most recent
consolidated balance sheet of the referent Person and its Restricted
Subsidiaries and computed in accordance with GAAP; provided, however, that route
contracts shall be deemed to be tangible assets.
"Consolidated Non-cash Charges" means, with respect to any Person for any
-----------------------------
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person and its Restricted Subsidiaries for such period, on a consolidated
basis, as determined in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve for cash charges for any future period).
6
<PAGE>
"Credit Agreement" means the Credit Agreement dated as of January 8, 1997
----------------
between the Company and Bankers Trust Company, First Union National Bank of
North Carolina, Lehman Commercial Paper, Inc. and other lending institutions
named therein (which replaced the Credit Agreement dated as of the Series A/B
Issue Date between the Company and Heller Financial, Inc., referred to in the
Series A/B Indenture), together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
4.12 of this Indenture) or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
---------
or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or with
-------
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
----------
successors.
"Disqualified Capital Stock" means that portion of any Capital Stock which,
--------------------------
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Notes for cash.
"Equity Offering" means an offering of Qualified Capital Stock of the
---------------
Company pursuant to a registration statement filed with the SEC in accordance
with the Securities Act or pursuant to an exemption from the registration
requirements thereof.
"Event of Default" has the meaning provided in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
------------
any successor statute or statutes thereto.
"Exchange Notes" means the Company's 11 3/4% Series D Senior Notes issued
--------------
in exchange for the Initial Notes pursuant to a Registered Exchange Offer and
shall also include any Additional Series D Senior Notes.
"Exchange Offer" means the registration by the Company under the Securities
--------------
Act pursuant to a registration statement of the offer by the Company to each
Holder of the Initial Notes and/or Series A/B Notes to exchange all the Initial
Notes and/or Series A/B Notes held by such Holder for the Exchange Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Initial Notes and/or Series A/B Notes held by such Holder, all in accordance
with the terms and
7
<PAGE>
conditions of the Registration Rights Agreement between the Company and the
Initial Purchasers, dated as of October 8, 1997.
"fair market value" means, with respect to any asset or property, the price
-----------------
which could be negotiated in an arm's length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Series A/B Issue
Date.
"Global Note" has the meaning provided in Section 2.01.
-----------
"Holder" means the Person in whose name a Note is registered on the
------
Registrar's books.
"incur" has the meaning provided in Section 4.12.
-----
"Indebtedness" means with respect to any Person, without duplication, (i)
------------
all Obligations of such Person for borrowed money, (ii) all Obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all Capitalized Lease Obligations of such Person, (iv) all Obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted), (v) all Obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all obligations under currency agreements and interest swap
agreements of such Person and (ix all Disqualified Capital Stock issued by such
Person with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
8
<PAGE>
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from time to
---------
time in accordance with the terms hereof.
"Independent Financial Advisor" means an investment banking firm (i) which
-----------------------------
does not, and whose directors, officers and employees or Affiliates do not, have
a direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Initial Notes" means the Company's 11 3/4% Series C Senior Notes due 2005
-------------
issued pursuant to this Indenture.
"Initial Purchasers" means Jefferies & Company, Inc., Lazard Freres & Co.
------------------
LLC, BT Alex. Brown Incorporated and First Union Capital Markets Corp.
"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)
under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
---------------------
interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person pursuant to
-------------------------
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
---------------------
to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or indirect loan
----------
or other extension of credit (including, without limitation, a guarantee) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by the
Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of Section 4.10 of this
Indenture, (i) "Investment" shall include and be valued at the fair market value
of the net assets of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair
market value of the net assets of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for
9
<PAGE>
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Income. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Common Stock of any
direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, the Company no longer owns, directly or
indirectly, 100% of the outstanding Common Stock of such Restricted Subsidiary,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.
"Issue Date" means the date of original issuance of the Initial Notes.
----------
"Legal Holiday" has the meaning provided in Section 10.07.
-------------
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
----
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Maturity Date" means November 15, 2005.
-------------
"Merger" means the merger of The Coinmach Corporation into Solon Automated
------
Services, Inc., with Solon Automated Services, Inc. surviving and changing its
name to Coinmach Corporation.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
-----------------
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Restricted Subsidiaries from such Asset Sale net of
(a) reasonable out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions), (b) taxes paid or payable after taking into account any
reduction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements, (c) repayment of Indebtedness that
is required to be repaid in connection with such Asset Sale and (d) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.
"Net Proceeds Offer" has the meaning provided in Section 4.16.
------------------
"Net Proceeds Offer Amount" has the meaning permitted in Section 4.16.
-------------------------
10
<PAGE>
"Net Proceeds Offer Payment Date" has the meaning provided in Section 4.16.
-------------------------------
"Net Proceeds Offer Trigger Date" has the meaning provided in Section 4.16.
-------------------------------
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
---------------
Regulation S.
"Notes" has the meaning provided in the preamble to this Indenture and
-----
means the Initial Notes and the Exchange Notes (including any Additional Series
D Senior Notes) treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium, interest,
-----------
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated October 1, 1997,
-------------------
pursuant to which the Initial Notes were offered, and any amendment or
supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the Board, the
-------
Chief Executive officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary of such Person, or any
other officer designated by the Board of Directors serving in a similar
capacity.
"Officers' Certificate" means, with respect to any Person, a certificate
---------------------
signed by two officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of such Person and otherwise complying with the requirements
of Sections 10.04 and 10.05, as they relate to the making of an Officers'
Certificate.
"Offshore Physical Notes" has the meaning provided in Section 2.06.
-----------------------
"Opinion of Counsel" means a written opinion from legal counsel, who may be
------------------
counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 10.04 and 10.05, as they relate to
the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.06.
------------
"Permitted Holders" means Golder, Thoma, Cressey, Rauner, Inc. or any
-----------------
entity controlled thereby.
"Permitted Indebtedness" means, without duplication, each of the following:
----------------------
(i) Indebtedness under the Series A/B Notes, the Notes, the Series A/B
Indenture and the Indenture;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed
$35,000,000 (increased by
11
<PAGE>
indebtedness described in any other clause of this definition of Permitted
Indebtedness), reduced by any required permanent repayments actually made
(which are accompanied by a corresponding permanent commitment reduction)
thereunder;
(iii) other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Series A/B Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company covering Indebtedness of
the Company or any of its Restricted Subsidiaries and Interest Swap
Obligations of any Restricted Subsidiary of the Company covering
Indebtedness of such Restricted Subsidiary; provided, however, that such
Interest Swap Obligations are entered into to protect the Company and its
Restricted Subsidiaries from fluctuations in interest rates on Indebtedness
incurred in accordance with this Indenture to the extent the notional
principal amount of such Interest Swap Obligation does not exceed the
principal amount of the Indebtedness to which such Interest Swap Obligation
relates;
(v) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company to the Company or to a Wholly owned Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or a Wholly
Owned Restricted Subsidiary of the Company, in each case subject. to no
Lien held by a Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided that if as of any date any Person other
than the Company or a Wholly Owned Restricted Subsidiary of the Company
owns or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(vi) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company, in each case subject to
no Lien; provided that (a) any Indebtedness of the Company to any Wholly
Owned Restricted Subsidiary of the Company is unsecured and subordinated,
pursuant to a written agreement, to the Company's obligations under this
Indenture and the Notes and (b) if as of any date any Person other than a
Wholly Owned Restricted Subsidiary of the Company owns or holds any such
Indebtedness or any Person holds a Lien in respect of such Indebtedness,
such date shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness by the Company;
(vii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within two business days of incurrence;
(viii) Indebtedness of the Company or any of its Restricted Subsidiaries
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with self-
insurance or similar requirements in the ordinary course of business;
12
<PAGE>
(ix) Refinancing Indebtedness;
(x) Capital Lease Obligations and purchase money Indebtedness used to
finance the acquisition of property or assets of the Company or any
Restricted Subsidiary in the ordinary course of business in an aggregate
principal amount not to exceed $15 million at any one time outstanding; and
(xi) additional Indebtedness of the Company in an aggregate principal
amount not to exceed $10 million at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
---------------------
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly Owned Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary; (ii) Investments in the Company by any Restricted
Subsidiary of the Company; provided that any Indebtedness evidencing such
Investment is unsecured and subordinated, pursuant to a written agreement, to
the Company's obligations under the Notes and this Indenture; (iii) investments
in cash and Cash Equivalents; (iv) loans and advances to employees and officers
of the Company and its Restricted Subsidiaries to assist with relocat ion
expenses incurred in connection with the Merger; (v) loans and advances to
employees and officers of the Company and its Restricted Subsidiaries in the
ordinary course of business for bona fide business purposes not in excess of
$500,000 at any one time outstanding; (vi) Interest Swap Obligations entered
into in the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with this Indenture; (vii) Investments in
securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers; (viii) Investments in the Series A/B Notes and/or
the Notes; and (ix) Investments made by the Company or its Restricted
Subsidiaries as a result of an Asset Sale made in compliance with Section 4.16
of this Indenture.
"Permitted Liens" means the following types of Liens:
---------------
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts,
13
<PAGE>
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(vii) purchase money Liens to finance property or assets of the
Company or any Restricted Subsidiary of the Company acquired in the
ordinary course of business; provided, however, that (A) the related
purchase money Indebtedness shall not exceed the cost of such property or
assets and shall not be secured by any property or assets of the Company or
any Restricted Subsidiary of the Company other than the property and assets
so acquired and (B) the Lien securing such Indebtedness shall be created
within 90 days of such acquisition;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and set-
off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture; and
(xii) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.12 of this Indenture; provided that (A) such Liens secured
such Acquired Indebtedness at the time of and prior to the incurrence of
such Acquired Indebtedness by the Company or a Restricted Subsidiary of the
Company and were not granted in connection with, or in anticipation of, the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company and (B) such Liens do not extend to or cover any
property or assets of the Company or of any of its Restricted Subsidiaries
other than the
14
<PAGE>
property or assets that secured the Acquired Indebtedness prior to the time
such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company.
"Person" means an individual, partnership, corporation, unincorporated
------
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
--------------
"Preferred Stock" of any Person means any Capital Stock of such Person that
---------------
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Principal" of any Indebtedness (including the Notes) means the principal
---------
amount of such Indebtedness plus the premium, if any, on such Indebtedness.
"Private Placement Legend" means the legend initially set forth on the
------------------------
Notes in the form set forth in Exhibit A.
"Proceeds Purchase Date" has the meaning provided in Section 4.16.
----------------------
"pro forma" means, with respect to any calculation made or required to be
---------
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
-----------------------
Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
----------------------------- ---
in Rule 144A under the Securities Act.
"Record Date" means any of the Record Dates specified in the Notes, whether
-----------
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed, means
---------------
the date fixed for such redemption pursuant to this Indenture and the Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Reference Date" has the meaning provided in Section 4.10.
--------------
15
<PAGE>
"Refinance" means, in respect of any security or Indebtedness, to
---------
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
------------------------
Restricted Subsidiary of Indebtedness incurred in accordance with Section 4.12
of this Indenture (other than pursuant to clause (ii), (iv), (v), (vi), (vii),
(viii) or (x) of the definition of Permitted Indebtedness), that does not (1)
result in an increase in the aggregate principal amount of Indebtedness of such
Person as of the date of such proposed Refinancing (plus the amount of any
premium required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable expenses incurred by the Company
in connection with such Refinancing) or (2) create Indebtedness with (A) a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier
than the final maturity of the Indebtedness being Refinanced; provided that (x)
if such Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Notes, then
such Refinancing Indebtedness shall be subordinate to the Notes at least to the
same extent and in the same manner as the Indebtedness being Refinanced.
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" means the Registration Rights Agreement
-----------------------------
dated as of October 8, 1997 between the Company and the Initial Purchasers for
the benefit of themselves and the Holders, as the same may be amended or
modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
------------
"Restricted Payment" has the meaning provided in Section 4.10.
------------------
"Restricted Security" has the meaning assigned to such term in Rule
-------------------
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
---------------------
which at the time of determination is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means one or more revolving credit facilities
-------------------------
under the Credit Agreement.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"Sale and Leaseback Transaction" means any direct or indirect arrangement
------------------------------
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of any property, whether owned
by the Company or any Restricted Subsidiary at the
16
<PAGE>
Series A/B Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person or to
any other Person from whom funds have been or are to be advanced by such Person
on the security of such Property.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
"Series A/B Indenture" means the Indenture dated as of November 30, 1995,
--------------------
as amended and supplemented, between the Company and State Street Bank and Trust
Company (successor in interest to Shawmut Bank Connecticut, National
Association), as Trustee, providing for the issuance of the Series A/B Notes in
the aggregate principal amount of $196,655,000, as such may be amended and
supplemented from time to time.
"Series A/B Issue Date" means the date on which the Series A/B Notes were
---------------------
originally issued under the Series A/B Indenture.
"Series A/B Notes" means the Company's Series B 11 3/4% Senior Notes due
----------------
2005 issued pursuant to the Series A/B Indenture, as such may be amended or
supplemented from time to time.
"Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v)
----------------------
of Regulation S-X under the Securities Act.
"Subsidiary," with respect to any Person, means (i) any corporation of
----------
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Surviving Entity" has the meaning provided in Section 5.01.
----------------
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. SS 77aaa-77bbbb), as
---
amended, as in effect on the date of this Indenture, except as otherwise
provided in Section 9.03.
"Trust Officer" means any officer of the Trustee assigned by the Trustee to
-------------
administer this Indenture, or in the case of a successor trustee, an officer
assigned to the department, division or group performing the corporation trust
work of such successor and assigned to administer this Indenture.
"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.
"U.S. Government Obligations" means non-callable direct obligations of, and
---------------------------
non-callable obligations guaranteed by, the United States of America for the
payment of which the full faith and credit of the United States of America is
pledged.
17
<PAGE>
"U.S. Legal Tender" means such coin or currency of the United States of
-----------------
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
-------------------
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such
-----------------------
Person that at the time of determination shall be or continue to be designated
an Unrestricted Subsidiary by the Board of Directors of such Person in the
manner provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Subsidiary (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of, or owns or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided that (x) the Company certifies to the
Trustee that such designation complies with Section 4.10 of this Indenture and
(y) each Subsidiary to be so designated and each of its Subsidiaries has not at
the time of designation, and does not thereafter, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x)
immediately after giving effect to such designation, the Company is able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.12 of this Indenture and (y)
immediately before and immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an officers' certificate certifying that such designation
complied with the foregoing provisions.
"Voting Stock" means, with respect to any Person, securities of any class
------------
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
---------------------------------
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
----------------------------------
Subsidiary of such Person of which all the outstanding voting securities (other
than in the case of a foreign Restricted Subsidiary, directors' qualifying
shares or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person.
18
<PAGE>
Section 1.02 Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
--------------------
"indenture security holder" means a Holder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company or any other
-------
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.03 Rules of Construction.
---------------------
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular; and
(v) "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.
19
<PAGE>
ARTICLE II
THE NOTES
---------
Section 2.01 Principal Amount, Form and Dating.
---------------------------------
(a) Principal Amount.
----------------
The aggregate principal amount of Notes which may be issued, executed,
authenticated and outstanding under this Indenture is $296,655,000, provided
that $196,655,000 shall be reserved for issuance and shall be available for
issuance only in connection with the exchange of the Series A/B Notes for
Exchange Notes.
(b) Form and Dating.
---------------
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or depository rule or usage. The Company
and the Trustee shall approve the form of the Notes and any notation, legend or
endorsement on them. Each Note shall be dated the date of its issuance and shall
show the date of its authentication.
The terms and provisions contained in the Notes annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Global Note"), deposited
with the Trustee, as custodian for the Depository, and shall bear the legend set
forth in Exhibit C, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Notes"). Notes offered and sold in reliance on any other exemption
from registration under the Securities Act other than as described in the
preceding paragraph shall be issued, and Notes offered and sold in reliance on
Rule 144A may be issued, in the form of permanent certificated Notes in
registered form, in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). The Offshore Physical Notes and the U.S. Physical Notes are
sometimes collectively herein referred to as the "Physical Notes."
20
<PAGE>
Section 2.02 Execution and Authentication; Aggregate Principal Amount.
--------------------------------------------------------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was an
Officer or Assistant Secretary at the time of such execution but no longer holds
that office or position at the time the Trustee authenticates the Note, the Note
shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $100,000,000, and (ii) Exchange Notes
from time to time for issue only in exchange for a like principal amount of
Initial Notes and up to $196,655,000 of Series A/B Notes, in each case upon
written orders of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of Notes to be authenticated and
the date on which the Notes are to be authenticated, whether the Notes are to be
Initial Notes or Exchange Notes, and shall further specify the amount of such
Notes to be issued as the Global Note, Offshore Physical Notes or U.S. Physical
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed $296,655,000, except as provided in Section 2.07; provided that
$196,655,000 of the Exchange Notes shall be reserved for issuance only in
exchange for Series A/B Notes.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without coupons,
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 (which shall be located in
the Borough of Manhattan in the City of New York, State of New York), which
shall initially be State Street Bank and Trust Company, 61 Broadway, 15th Floor,
Corporate Trust Window, New York, New York 10006, where (a) Notes may be
presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Notes may be presented or surrendered for payment ("Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company, upon prior written
notice to the Trustee, may have one or more co-Registrars and one or
21
<PAGE>
more additional Paying Agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent. Neither the Company nor any
Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days notice to the Company.
Section 2.04 Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
Section 2.05 Holder 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
the Holders and shall otherwise comply with TIA S 312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause the Registrar to furnish to
the Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee.
Section 2.06 Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.15 and 2.16, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met, including an opinion of Counsel with respect to
whether (i) any Note constitutes a Restricted Security and (ii) the requirements
for transfer of any Note have been satisfied, including the
22
<PAGE>
requirements provided for in Section 2.16 of this Indenture; provided, however,
that the Notes presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfer and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.10, 3.06, 4.15, 4.16 or 9.05, in
which event the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Note may be effected
only through a book entry system maintained by the Depository, and that
ownership of a beneficial interest in the Note shall be required to be reflected
in a book entry.
Section 2.07 Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an affidavit of lost certificate and an indemnity bond or
other indemnity, sufficient in the judgment of both the Company and the Trustee,
to protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Note, including reasonable
fees and expenses of its counsel and of the Trustee and its counsel. Every
replacement Note shall constitute an additional obligation of the Company.
Section 2.08 Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona fide
purchaser. A mutilated Note ceases to be outstanding upon surrender of such
Note and replacement thereof pursuant to Section 2.07.
23
<PAGE>
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
Section 2.09 Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. The Company shall notify the Trustee, in writing (which notice
shall constitute actual notice for purposes of the foregoing sentence), when it
or any of its Affiliates repurchases or otherwise acquires Notes, of the
aggregate principal amount of such Notes so repurchased or otherwise acquired.
Section 2.10 Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.
Section 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel and, at the written direction of the Company, shall dispose of all
Notes surrendered for transfer, exchange, payment or cancellation. Subject to
Section 2.07, the Company may not issue new Notes to replace Notes that it has
paid or delivered to the Trustee for cancellation. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
Section 2.12 CUSIP Number.
------------
The Company in issuing the Notes may use a "CUSIP" number, and if so, the
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
24
<PAGE>
the other identification numbers printed on the Notes. The Company shall
promptly, upon its becoming aware of any change in CUSIP numbers, notify the
Trustee of any change in the CUSIP number.
Section 2.13 Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Interest Payment Date and
Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
Section 2.14 Book-Entry Provisions for Global Note.
-------------------------------------
(a) The Global Note initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in Exhibit
C.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Note, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Note for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
members, the operation of customary practices governing the exercise of the
rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Note may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository and the provisions of Section 2.15. In addition, Physical Notes shall
be transferred to all beneficial owners in exchange for their beneficial
interests in the Global Note if (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for the Global Note and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
25
<PAGE>
(d) In connection with the transfer of the entire Global Note to beneficial
owners pursuant to paragraph (b), the Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by the Depository in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.15, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Exhibit A.
(f) The Holder of the Global Note may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
Section 2.15 Special Transfer Provisions.
---------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
--------------------------------------------------------------------
Persons. The following provisions shall apply with respect to the registration
- -------
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting
a Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after October 8, 1999 or (y) (1)
in the case of a transfer to an Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto or (2) in the case of a transfer to a Non-U.S. Person, the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit E hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBS. The following provisions shall apply with respect
-----------------
to the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
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(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement
------------------------
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the
Registrar shall deliver only Notes that bear the Private Placement Legend unless
(i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.15
exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restriction s on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private Placement
-------
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.14 or this Section 2.15. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
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ARTICLE III
REDEMPTION
----------
Section 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to Paragraph 5 of the Notes,
it shall notify the Trustee and the Paying Agent in writing of the Redemption
Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at
least 60 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate and opinion of Counsel
stating that such redemption shall comply with the conditions contained herein
and in the Notes.
Section 3.02 Selection of Notes To Be Redeemed.
---------------------------------
If fewer than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which such Notes are listed or, if such
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or in such other fair and reasonable manner chosen at the
discretion of the Trustee; provided, however, that if a partial redemption is
made with the proceeds of an Equity Offering, selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis or
on as nearly a pro rata basis as is practicable (subject to the procedures of
the Depository), unless such method is otherwise prohibited. The Trustee shall
make the selection from the Notes outstanding and not previously called for
redemption and shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes in denominations
of $1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1,000. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption.
Section 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid, to each Holder whose Notes are to be redeemed at its
registered address, with a copy to the Trustee and any Paying Agent. At the
Company's written request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(i) the Redemption Date;
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(ii) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(iii) the name and address of the Paying Agent;
(iv) the subparagraph of the Notes pursuant to which such redemption
is being made;
(v) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(vi) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes redeemed;
(vii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
and
(viii) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
Section 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price plus accrued interest, if any. Upon surrender to the Trustee
or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant record dates referred to in the Notes.
Section 3.05 Deposit of Redemption Price.
---------------------------
On or before the Redemption Date, the Company shall deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Redemption Price plus accrued
interest, if any, of all Notes to be redeemed on that date. The Paying Agent
shall promptly return to the Company any U.S. Legal Tender so deposited which is
not required for that purpose, except with respect to monies owed as obligations
to the Trustee pursuant to Article Seven.
29
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If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
Section 3.06 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE IV
COVENANTS
---------
Section 4.01 Payment of Notes.
----------------
The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
Notwithstanding anything to the contrary contained in this Indenture, the
Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States of America from
principal or interest payments hereunder.
Section 4.02 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior 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 10.02.
Section 4.03 Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Subsidiaries in accordance with the respective
organizational documents of each such Subsidiary and the material rights
(charter and statutory) and franchises of the Company and each such Subsidiary;
provided, however, that the Company shall not be required to preserve, with
respect to itself, any material right or franchise and, with respect to any of
its Subsidiaries, any such existence, material right or franchise, if the Board
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of Directors of the Company shall determine in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole.
Section 4.04 Payment of Taxes and other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
its properties or any of its Subsidiaries' properties and (ii) all material
lawful claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon its properties or any of its Subsidiaries' properties;
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 or shall be contested in good faith
by appropriate proceedings properly instituted and diligently conducted for
which adequate reserves, to the extent required under GAAP, have been taken.
Section 4.05 Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain its properties in good working order and condition in all material
respects (subject to ordinary wear and tear) and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto and
actively conduct and carry on its business; provided, however, that nothing in
this Section 4.05 shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the good faith judgment of the Board of Directors or other
governing body of the Company or the Subsidiary concerned, as the case may be,
desirable in the conduct of its businesses and is not disadvantageous in any
material respect to the Holders.
(b) The Company shall maintain insurance (including appropriate self-
insurance) against loss or damage of the kinds that, in the good faith judgment
of the Company, are adequate and appropriate for the conduct of the business of
the Company and its Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Company, for
companies similarly situated in the industry.
Section 4.06 Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee, within 90 days after the end
of the Company's fiscal year, an Officers' Certificate stating that a review of
its activities during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether it has
kept, observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of such Officer's actual knowledge the Company during such preceding fiscal
year has kept, observed, performed and fulfilled each and every such covenant
and no Default or Event of Default occurred during such year and at the date of
such certificate there is no Default or Event of Default that has
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<PAGE>
occurred and is continuing or, if such signers do know of such Default or Event
of Default, the certificate shall describe the Default or Event of Default and
its status with particularity. The Officers' Certificate shall also notify the
Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.08
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is continuing
or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 10.02 hereof, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.
Section 4.07 Compliance with Laws.
--------------------
The Company shall, and shall cause each of its Subsidiaries to, comply with
all applicable statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties, except for such noncompliances
as are not in the aggregate reasonably likely to have a material adverse effect
on the financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole.
Section 4.08 Reports.
-------
(a) The Company shall deliver to the Trustee and mail to each Holder,
within 15 days after the filing of the same with the SEC, copies of its
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the
other provisions of TIA (S) 314(a).
(b) If at any time the Company is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC, to
the extent permitted, and distribute to the Trustee and to each Holder copies of
the quarterly and annual financial information that would have been required to
be contained in a filing with the SEC on forms 10-Q and 10-K and all current
reports that would be required to be filed with the SEC on form 8-K had the
Company been subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act. All such financial information shall include consolidated
financial statements (including footnotes) prepared
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<PAGE>
in accordance with GAAP. Such annual financial information shall also include an
opinion thereon expressed by an independent accounting firm of established
national reputation. All such consolidated financial statements shall be
accompanied by a "Management's Discussion and Analysis of Financial Condition
and Results of Operation." The financial and other information to be distributed
to Holders shall be filed with the Trustee and mailed to the Holders at their
respective addresses appearing in the register of the Notes maintained by the
Registrar, within 120 days after the end of the Company's fiscal year and within
60 days after the end of each of the first three quarters of each such fiscal
year. Such information shall be made available to securities analysts and
prospective investors upon request. In addition, the Company shall furnish to
the Holders and to securities analysts and to prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.09 Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.10 Limitation on Restricted Payments.
---------------------------------
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company's
Capital Stock to holders of such Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (c) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company that is subordinate or junior in right of
payment to the Notes or (d) make any Investment (other than Permitted
Investments) (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) being referred to as a "Restricted Payment"), if at the time of such
Restricted Payment or immediately after giving effect thereto, (i) a Default or
an Event of Default shall have occurred and be continuing, (ii) the Company is
not able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 of this Indenture or
(ii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Series A/B Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market value
of such property as determined reasonably and in good faith by the Board of
Directors of the Company) shall exceed the sum of: (x) 50% of the cumulative
Consolidated Net Income (or if cumulative Consolidated Net Income shall be a
loss, minus 100% of such loss) of the Company earned subsequent to the Series
A/B Issue Date and ending on the last
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day of the Company's last fiscal quarter ending prior to the date the Restricted
Payment occurs (the "Reference Date") (treating such period as a single
accounting period); plus (y) 100% of the aggregate net cash proceeds received by
the Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to the Series A/B Issue Date and on or prior to the
Reference Date of Qualified Capital Stock of the Company; plus (z) without
duplication of any amounts included in clause(iii)(y) above, 100% of the
aggregate net cash proceeds of any equity contribution received by the Company
from a holder of the Company's Capital Stock (excluding, in the case of clauses
(iii)(y) and (z), any net cash proceeds from (A) an Equity offering to the
extent used to redeem the Notes (including any Additional Series D Notes) and
(B) issuances and sales of Qualified Capital Stock of the Company financed
directly or indirectly using funds borrowed from the Company or any Subsidiary
of the Company, until and to the extent such borrowing is repaid).
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit: (1) the payment of any dividend within 60
days after the date of declaration of such dividend if the dividend would have
been permitted on the date of declaration; (2) if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any shares of Capital
Stock of the Company, either (i) solely in exchange for shares of Qualified
Capital Stock of the Company or (ii) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Qualified Capital Stock of the Company; (3) if no Default
or Event of Default shall have occurred and be continuing, the acquisition of
any Indebtedness of the Company that is subordinate or junior in right of
payment to the Notes either (i) solely in exchange for shares of Qualified
Capital Stock of the Company, or (ii) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (A) shares of Qualified Capital Stock of the Company or (B)
Refinancing Indebtedness; (4) if no Default or Event of Default shall have
occurred and be continuing, an Investment through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock of the Company; (5) if no
Default or Event of Default shall have occurred and be continuing, Investments
in an aggregate amount not to exceed $5,000,000; (6) the making of payments by
the Company to Coinmach Laundry in an amount not in excess of the federal and
state (in such states that permit consolidated or combined tax returns) income
tax liability that the Company and its Restricted Subsidiaries would have been
liable for if the Company and its Restricted Subsidiaries had filed their tax
returns on a stand-alone basis; provided that such payments shall be made by the
Company no earlier than five days prior to the date on which Coinmach Laundry is
required to make its payments to the Internal Revenue Service or the applicable
state taxing authority, as the case may be; (7) the repayment on the Series A/B
Issue Date of Indebtedness of Coinmach Laundry owing to FINOVA Capital
Corporation not to exceed $5.0 million in the aggregate; (8) if no Default or
Event of Default shall have occurred and be continuing, a distribution to
Coinmach Laundry solely to enable Coinmach Laundry to repurchase Coinmach
Laundry Capital Stock from members of Coinmach Laundry management in connection
with certain executive stock purchase agreements in effect on the Series A/B
Issue Date not to exceed $500,000 in the aggregate; (9) if no Default or Event
of Default shall have occurred and be continuing, the payment to Coinmach
Laundry for reasonable accounting fees and other support services provided to
the Company not to exceed $250,000 in any fiscal year; and (10) if no Default or
Event of Default shall have occurred and be continuing, a distribution to
Coinmach Laundry solely to enable Coinmach Laundry to pay a management fee to
the Permitted Holders not to exceed $500,000 in any fiscal year. In determining
the aggregate
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amount of Restricted Payments made subsequent to the Series A/B Issue Date in
accordance with clause (iii) of the immediately preceding paragraph, amounts
expended pursuant to clauses (1), (2), (4), (5), (8), (9) and (10) shall be
included in such calculation.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an officers' certificate stating that such Restricted
Payment complies with this Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon the Company's latest available internal quarterly financial
statements.
Section 4.11 Limitation on Transactions with Affiliates.
------------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are no less favorable
than those that might reasonably have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an Affiliate of
the Company or such Restricted Subsidiary. All Affiliate Transactions (and each
series of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other property with a fair market value in
excess of $500,000 shall be approved by a majority of the disinterested members
of the Board of Directors of the Company or such Restricted Subsidiary, as the
case may be, such approval to be evidenced by a Board Resolution stating that
such Board of Directors has determined that such transaction complies with the
foregoing provisions. If the Company or any Restricted Subsidiary of the
Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves an aggregate fair market
value of more than $2,500,000, the Company or such Restricted Subsidiary, as the
case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related transactions
to the Company or the relevant Restricted Subsidiary, as the case may be, from a
financial point of view, from an Independent Financial Advisor and file the same
with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary as determined in good faith by the Company's Board of Directors or
senior management; (ii) transactions exclusively between or among the Company
and any of its Wholly Owned Restricted Subsidiaries or exclusively between or
among such Wholly Owned Restricted Subsidiaries, provided such transactions are
not otherwise prohibited by this Indenture; and (iii) Restricted Payments
permitted by Section 4.10 of this Indenture.
35
<PAGE>
Section 4.12 Limitation on Incurrence of Additional Indebtedness.
---------------------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness); provided, however, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company may incur
Indebtedness (including, without limitation, Acquired Indebtedness) if on the
date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company
is greater than 2.10 to 1.00 for the first 24 months following the Issue Date
and 2.25 to 1.00 on any such date of incurrence thereafter.
Section 4.13 Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Subsidiaries.
----------------------
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
or to pay any Indebtedness or other obligation owed to the Company or any other
Restricted Subsidiary of the Company; or (c) transfer any of its property or
assets to the Company or any other Restricted Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture or the Series A/B Indenture; (3) customary
non-assignment provisions of any contract or any lease governing a leasehold
interest of any Restricted Subsidiary of the Company; (4) any instrument
governing Acquired Indebtedness, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person so acquired; (5) agreements
existing on the Series A/B Issue Date to the extent and in the manner such
agreements are in effect on the Series A/B Issue Date; or (6) an agreement
governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or
incurred pursuant to an agreement referred to in clause (2), (4) or (5) above,
including the Credit Agreement; provided, however, that the provisions relating
to such encumbrance or restriction contained in any such Indebtedness are no
less favorable to the Company in any material respect as determined by the Board
of Directors of the Company in their reasonable and good faith judgment than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (2), (4) or (5).
Section 4.14 Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction. Notwithstanding
the foregoing, the Company and its Restricted Subsidiaries may enter into a Sale
and Leaseback Transaction involving only the sale or transfer of assets acquired
after the Series A/B Issue Date if: (i) after giving pro forma effect to any
such Sale and Leaseback Transaction, the Company or such Restricted Subsidiary,
as the case may be, shall be in compliance with Section 4.12 of this Indenture;
(ii) the Company or such Restricted Subsidiary shall comply with the provisions
set forth in Section 4.16 of this Indenture;
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and (iii) the aggregate amount of Capitalized Lease Obligations in respect of
all Sale and Leaseback Transactions consummated since the Series A/B Issue Date
(including such proposed Sale and Leaseback Transaction) would not exceed 10% of
Consolidated Net Tangible Assets of the Company.
Section 4.15 Limitation on Change of Control.
-------------------------------
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer to purchase all outstanding Notes (including any Additional Series D
Senior Notes) pursuant to the offer described in paragraph (b) below (the Change
of Control Offer") at a purchase price equal to 101% of the principal amount
thereof plus accrued interest, if any, to the date of purchase.
(b) Within 30 days following the date upon which the Change of Control
occurred (the "Change of Control Date"), the Company shall send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders shall
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Change of Control Offer. Such notice shall state:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered and not withdrawn will be accepted
for payment;
(ii) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed, other than as may be required by
law) (the "Change of Control Payment Date");
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
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(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral
multiples thereof; and
(viii) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the purchase price plus accrued interest, if any, of all Notes so
tendered and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price plus accrued interest,
if any, and the Trustee shall promptly authenticate and mail to such Holders new
Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. Any Notes not so accepted shall be promptly mailed by the Company
to the Holder thereof. For purposes of this Section 4.15, the Trustee shall act
as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change of
Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 4.15, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.15 by virtue thereof.
Section 4.16 Limitation on Asset Sales.
-------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the
Company's Board of Directors), (ii) at least 75% of the consideration received
by the Company or the Restricted Subsidiary, as the case may be, from such Asset
Sale shall be in the form of cash or Cash Equivalents and is received at the
time of such disposition; and (iii) upon the consummation of an Asset Sale, the
Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash
Proceeds relating to such Asset Sale within 180 days of receipt thereof either
(A) to repay any Indebtedness secured by the assets involved in such Asset Sale
together with a concomitant permanent reduction in the amount of such
Indebtedness (including a permanent reduction in the committed amounts therefor
in the case of any revolving credit facility so repaid), (B) to repay any of the
Company's 12 3/4% Senior Notes due 2001 which were not exchanged for Notes on
the Series A/B Issue Date (C) to make an investment in properties and assets
that replace the properties and assets that were the subject of such Asset Sale
or in properties and assets that will be used in the business of the Company and
its Subsidiaries as existing on the Series A/B Issue Date or in businesses
reasonably
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related thereto ("Replacement Assets"), or (D) a combination of repayment and
investment permitted by the foregoing clauses (iii)(A), (iii)(B) and (iii)(C);
provided, however, that the 75% limitation set forth in clause (ii) of this
paragraph shall not apply to any proposed Asset Sale for which an independent
certified accounting firm shall certify to the Board of Directors of the Company
and the Trustee that the after-tax cash portion of the consideration to be
received by the Company or such Restricted Subsidiary in such proposed Asset
Sale is equal to or greater than what the net after-tax cash proceeds would have
been had such proposed Asset Sale complied with the 75% limitation set forth in
clause (ii) of this paragraph and provided, further, that for purposes of this
covenant, Cash Equivalents shall include any unsubordinated Indebtedness of the
Company or any Restricted Subsidiary (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes thereto) that
are assumed by the transferee and for which the Company or such Restricted
Subsidiary is reasonably indemnified in connection with the relevant Asset Sale.
On the 181st day after an Asset Sale or such earlier date, if any, as the Board
of Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B), (iii)(C) and (iii)(D) of the next preceding sentence (each,
a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B), (iii)(C) and (iii)(D) of the next
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase (the "Net
Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than
30 nor more than 60 days following the applicable Net Proceeds Offer Trigger
Date, from all Holders on a pro rata basis that amount of Notes (including
Additional Series D Senior Notes) equal to the Net Proceeds Offer Amount at a
price equal to 100% of the principal amount of the Notes to be purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase; provided,
however, that if at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this covenant. The Company may defer the Net Proceeds Offer until there is an
aggregate unutilized Net Proceeds Offer Amount equal to or in excess of
$5,000,000 resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of
$5,000,000, shall be applied as required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01 of this
Indenture, the successor corporation shall be deemed to have sold the properties
and assets of the Company and its Restricted Subsidiaries not so transferred for
purposes of this covenant, and shall comply with the provisions of this covenant
with respect to such deemed sale as if it were an Asset Sale. In addition, the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.
Notwithstanding the two immediately preceding paragraphs, the Company and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Replacement Assets
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and (ii) such Asset Sale is for fair market value; provided that any
consideration not constituting Replacement Assets received by the Company or any
of its Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds subject to
the provisions of the two preceding paragraphs.
(b) Subject to the deferral of the Net Proceeds Offer Trigger Date
contained in subsection (a) above, each notice of a Net Proceeds Offer pursuant
to this Section 4.16 shall be mailed or caused to be mailed, by first class
mail, by the Company not more than 25 days after the Net Proceeds Offer Trigger
Date to all Holders at their last registered addresses as of a date within 15
days of the mailing of such notice, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to Section 4.16
and that all Notes (including any Additional Series D Senior Notes)
tendered, in whole or in part, will be accepted for payment; provided,
however, that if the aggregate principal amount of Notes (including any
Additional Series D Senior Notes) tendered in a Net Proceeds Offer plus
accrued interest at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, the Company shall select the Notes
(including any Additional Series D Senior Notes) to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000 or multiples thereof
shall be purchased);
(ii) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be 20 Business Days from the date of mailing
of notice of such Net Proceeds Offer, or such longer period as required by
law) (the "Proceeds Purchase Date");
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrue interest after the Proceeds Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Proceeds
Purchase Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and
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(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral
multiples thereof;
On or before the Proceeds Purchase Date, the Company shall (i) accept for
payment Notes (including any Additional Series D Senior Notes) or portions
thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in
accordance with item (b)(l) above, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price plus accrued interest, if any, of
all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price
plus accrued interest, if any. For purposes of this Section 4.16, the Trustee
shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Net
Proceeds Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
Section 4.16 by virtue thereof.
Section 4.17 Limitation on Preferred Stock of Subsidiaries.
---------------------------------------------
The Company shall not permit any of its Restricted Subsidiaries to issue
any Preferred Stock (other than to the Company or to a Wholly Owned Restricted
Subsidiary of the Company) or permit any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company) to own any Preferred Stock of
any Restricted Subsidiary of the Company.
Section 4.18 Limitation on Liens.
-------------------
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Liens of any kind against or upon any property or assets of
the Company or any of its Restricted Subsidiaries whether owned on the Series
A/B Issue Date or acquired after the Series A/B Issue Date, or any proceeds
therefrom, or assign or otherwise convey any right to receive income or profits
therefrom unless (i) in the case of Liens securing Indebtedness that is
expressly subordinate or junior in right of payment to the Notes, the Notes are
secured by a Lien on such property, assets or proceeds that is senior in
priority to such Liens and (ii) in all other cases, the Notes are equally and
ratably secured, except for (A) Liens existing as of the Series A/B Issue Date
to the extent and in the manner such Liens are in effect on the Series A/B Issue
Date; (B) Liens securing the Notes; (C) Liens securing borrowings under the
Credit Agreement, including any additional Obligations thereunder (which Liens
may extend to all property now owned or hereafter acquired by the Company or any
of its Subsidiaries); (D) Liens of
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the Company or a Wholly Owned Restricted Subsidiary of the Company on assets of
any Subsidiary of the Company; (E) Liens securing Refinancing Indebtedness which
is incurred to Refinance any Indebtedness which has been secured by a Lien
permitted under this Section 4.18 and which Indebtedness has been incurred in
accordance with the provisions of Section 4.12; provided, however, that such
Liens (x) are no less favorable to the Holders and are not more favorable to the
lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being Refinanced and (y) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced; and (F) Permitted Liens.
Section 4.19 Conduct of Business.
-------------------
The Company and its Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or related to the businesses in which
the Company and its Restricted Subsidiaries are engaged on the Series A/B Issue
Date.
Section 4.20 Limitation on Restrictive Covenants.
-----------------------------------
Notwithstanding any other provisions of this Indenture, the restrictive
covenants set forth herein for so long as the Series A/B Indenture remains in
effect, shall be and shall be deemed limited to the extent necessary so that the
creation, existence and effectiveness of such restrictive covenants shall not
result in a breach of the covenant of the Series A/B Indenture relating to
"Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries."
ARTICLE V
SUCCESSOR CORPORATION
---------------------
Section 5.01 Merger, Consolidation and Sale of Assets.
----------------------------------------
(a) The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless:
(i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company's
Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia and (y) shall expressly assume, by supplemental indenture (in form
and substance reasonably satisfactory to the Trustee), executed and
delivered to the Trustee, the due and punctual payment of the principal of,
and premium, if
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any, and interest on all of the Notes and the performance of every covenant
of the Notes, the Indenture and the Registration Rights Agreement on the
part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) of this Section 5.01 (including
giving effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, (1)
shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction
and (2) shall be able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.12 of this
Indenture;
(iii) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) of this
Section 5.01 (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and
(iv) the Company or the Surviving Entity shall have delivered to the
Trustee an officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of the Indenture and that all
conditions precedent in the Indenture relating to such transaction have
been satisfied.
(b) For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Section 5.02 Successor Corporation Substituted.
---------------------------------
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
in which the Company is not the continuing corporation, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, lease or transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
and the Notes with the same effect as if such surviving entity had been named as
such.
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ARTICLE VI
DEFAULT AND REMEDIES
--------------------
Section 6.01 Events of Default.
-----------------
An "Event of Default" occurs if:
(i) the Company fails to pay interest on any Notes when the same
becomes due and payable and the Default continues for a period of 30 days;
(ii) the Company fails to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);
(iii) the Company defaults in the observance or performance of any of
the covenants described in Sections 4.10, 4.11, 4.12, 4.13, 4.14, 4.17,
4.18 and 5.01 which default continues for a period of 30 days after the
Company receives written notice specifying the default (and demanding that
such default be remedied) from the Trustee or the Holders of at least 25%
of the outstanding principal amount of the Notes (except in the case of a
default under Section 5.01 of this Indenture, which will constitute an
Event of Default with such notice requirement but without such passage of
time requirement);
(iv) a default in the observance or performance of any other covenant
or agreement contained in the Indenture which default continues for a
period of 60 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Notes;
(v) a default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness of the Company or of any Restricted Subsidiary of the Company
(or the payment of which is guaranteed by the Company or any Restricted
Subsidiary of the Company), whether such Indebtedness now exists or is
created after the Issue Date, which default (a) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness after
any applicable grace period provided in such Indebtedness on the date of
such default (a "payment default") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a payment
default or the maturity of which has been so accelerated, aggregates
$3,500,000;
(vi) one or more judgments in an aggregate amount in excess of
$3,500,000 shall have been rendered against the Company or any of its
Restricted Subsidiaries and such Judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and non-appealable;
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(vii) the Company or any Significant Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to the appointment of a Custodian of it or for substantially
all of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (E) makes a general
assignment for the benefit of its creditors, or (F) takes any corporate
action to authorize or effect any of the foregoing; or
(viii) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any Significant
Subsidiary, (B) appoint a Custodian of the Company or any Significant
Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstated and in effect or a period of 60 consecutive
days.
Section 6.02 Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified in
Section 6.01(7) or (8) with respect to the Company or any of its Significant
Subsidiaries) occurs and is continuing and has not been waived pursuant to
Section 6.04, then the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued interest on
all the Notes to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a notice of
acceleration" (the "Acceleration Notices"), and the same shall become
immediately due and payable.
(b) If an Event of Default specified in Section 6.01(7) or (8) with respect
to the Company or any of its Significant Subsidiaries occurs and is continuing,
then all unpaid principal of, and premium, if any, and accrued and unpaid
interest on all of the outstanding Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
(c) At any time after a declaration of acceleration with respect to the
Notes in accordance with Section 6.02(a), the Holders of a majority in principal
amount of the Notes may rescind and cancel such declaration and its consequences
(i) if the rescission would not conflict with any judgment or decree, (ii) if
all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration and
(iii) to the extent the payment of such interest is lawful, if interest on
overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
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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 Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
-----------------------
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Notes by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in clauses (i)
and (ii) of Section 6.01. When a Default or Event of Default is waived, it is
cured and ceases.
Section 6.05 Control by Majority.
-------------------
Subject to Section 2.09, the Holders of a majority in principal amount of
the outstanding Notes 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 the Trustee, including, without limitation, any remedies
provided for in Section 6.03. Subject to Section 7.01, however, the Trustee may
refuse to follow any direction that the Trustee reasonably believes conflicts
with any law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder, or that may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
Section 6.06 Limitation on Suits.
-------------------
A Holder may not pursue any remedy with respect to this Indenture or the
Notes unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense
to be incurred in compliance with such request;
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(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of satisfactory indemnity;
and
(v) during such 60-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent
with the request.
The foregoing limitations shall not apply to a suit instituted by a Holder
for the enforcement of the payment of principal and premium, if any, or interest
on such Note on or after the respective due dates set forth in such Note
(including upon acceleration thereof) or the institution of any proceeding with
respect to this Indenture or any remedy hereunder, including without limitation
acceleration, by the Holders of a majority in principal amount of outstanding
Notes; provided that upon institution of any proceeding or exercise of any
remedy, such Holders provide the Trustee with prompt notice thereof.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
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 a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, 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 principal or interest specified in
clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in Section 4.01 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective 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 Holder to make such payments to the Trustee and, in
the event that the
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Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, taxes, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. The Company's
payment obligations under this Section 6.09 shall be secured in accordance with
the provisions of Section 7.07 hereunder. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities.
----------
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by a Holder or Holders of more than 10% in principal amount of
the outstanding Notes.
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ARTICLE VII
TRUSTEE
-------
Section 7.01 Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(i) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in
this Indenture against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(ii) 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.
(iii) 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 6.02, 6.04 or 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 in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.
(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.
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(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 7.02 Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document reasonably believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, or
both, which shall conform to Sections 10.04 and 10.05. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action that it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, 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, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company's accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
may be incurred by it in compliance with such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
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Section 7.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledges of Notes and may otherwise deal with the Company, any Subsidiary of the
Company, or their respective 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 must comply with Sections 7.10 and 7.11.
Section 7.04 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
Section 7.05 Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default becomes known to the Trustee. Except in the case of a Default or an
Event of Default in payment of principal of, or interest on, any Note, including
an accelerated payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer or on the Net Proceeds Offer
Payment Date pursuant to a Net Proceeds Offer and, except in the case of a
failure to comply with Article Five hereof, the Trustee may withhold the notice
if and so long as its Board of Directors, the executive committee of its Board
of Directors or a committee of its directors and/or Trust Officers in good faith
determines that withholding the notice is in the interest of the Holders.
Section 7.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15, the Trustee shall, to the extent that any
of the events described in TIA (S) 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Holder a brief report dated as of such
date that complies with TIA (S) 313(a). The Trustee also shall comply with TIA
(S)(S) 313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be mailed
to the Company and filed with the SEC and each stock exchange, if any, on which
the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become listed on
any stock exchange and the Trustee shall comply with TIA (S) 313(d).
Section 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this
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Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the administration of this trust including
the reasonable costs and expenses of enforcing this Indenture against the
Company (including this Section 7.07) and defending themselves against any claim
or liability in connection with the exercise or performance of any of their
rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; provided that any settlement of a claim shall be
approved in writing by the Trustee. Alternatively, the Trustee may at its option
have separate counsel of its own choosing and the Company shall pay the
reasonable fees and expenses of such counsel; provided that the Company will not
be required to pay such fees and expenses if it assumes the Trustee's defense
and there is no conflict of interest between the Company and the Trustee in
connection with such defense as reasonably determined by the Trustee. The
Company need not pay for any settlement made without its written consent, which
consent shall not be unreasonably withheld. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
Section 7.08 Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or
its property; or
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(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder of such event
and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer 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 all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 shall continue for the benefit of the
retiring 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,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee; provided that such corporation
shall be otherwise qualified and eligible under this Article Seven.
Section 7.10 Eligibility: Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirement of
TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case of a corporation
included in a bank holding company system, the related bank holding company)
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition. In addition, if the
Trustee is a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital requirements
of TIA (S) 310(a)(2). The Trustee shall comply with TIA (S) 310(b); provided,
however, that there shall be excluded from the operation of TIA (S) 310(b)(1)
any indenture or indentures under which other securities, or certificates of
interest or
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participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set forth in TIA (S) 310(b)(1) are met. The
provisions of TIA (S) 310 shall apply to the Company, as obligor of the Notes.
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
Section 8.01 Legal Defeasance and Covenant Defeasance.
----------------------------------------
(a) The Company may, at its option and at any time, elect to have either
paragraph (b) or paragraph (c) below be applied to the outstanding Notes upon
compliance with the applicable conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Notes on the date the applicable conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of the Sections and matters
under this Indenture referred to in (i) and (ii) below, and to have satisfied
all its other obligations under such Notes and this Indenture insofar as such
Notes are concerned, except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in paragraph
(d) below and as more fully set forth in such paragraph, payments in respect of
the principal of and interest on such Notes when such payments are due and (ii)
obligations listed in Section 8.03, subject to compliance with this Section
8.01. The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to the Notes.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article Five, Sections 4.05
and 4.08, and Sections 4.10 through 4.19 with respect to the outstanding Notes
on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, such Covenant Defeasance means that,
with respect to
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the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.01(3) or 6.01(4), but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under paragraph (a) hereof of the option applicable to this
paragraph (c), subject to the satisfaction of the conditions set forth in
Section 8.03 hereof, Sections 6.01(3), 6.01(4), 6.01(5) and 6.01(6) shall not
constitute Events of Default.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance reasonably satisfactory to the Trustee, U.S. Legal Tender or
U.S. Government Obligations or a combination thereof in such amounts and at
such times as are sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of and
interest on the outstanding Notes to maturity or redemption; provided,
however, that the Trustee (or other qualifying trustee) shall have received
an irrevocable written order from the Company instructing the Trustee (or
other qualifying trustee) to apply such U.S. Legal Tender or the proceeds
of such U.S. Government Obligations to said payments with respect to the
Notes to maturity or redemption;
(ii) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of deposit (other than a Default or
Event of Default resulting from the Incurrence of Indebtedness, all or a
portion of which will be used to defease the Notes concurrently with such
Incurrence);
(iii) Such deposit will not result in a Default under this Indenture or
a breach or violation of, or constitute a default under, this Indenture or
any other material instrument or agreement to which the Company or any of
its Subsidiaries is a party or by which it or its property is bound;
(iv) (i) In the event the Company elects paragraph (b) hereof, the
Company shall deliver to the Trustee an Opinion of Counsel in the United
States, in form and substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the Issue
Date, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall state that, Holders of the Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and the
defeasance contemplated hereby and will be subject to federal income tax in
the same amounts and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred or (ii) in
the event the Company elects paragraph (c) hereof, the Company shall
deliver to the Trustee an Opinion of Counsel in the
55
<PAGE>
United States, in form and substance reasonably satisfactory to the
Trustee, to the effect that Holders of the Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit
and the defeasance contemplated hereby and will be subject to federal
income tax in the same amounts and in the same manner and at the same times
as would have been the case if such deposit and defeasance had not
occurred;
(v) The Company shall have delivered to the Trustee an Officer's
Certificate, stating that the deposit under clause (1) was not made by the
Company with the intent of preferring the Holders over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others;
(vi) The Company shall have delivered to the Trustee an Opinion of
Counsel, reasonably satisfactory to the Trustee, to the effect that,
assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of Notes
is an insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally; and
(vii) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
specified herein relating to the defeasance contemplated by this Section
8.01 have been complied with.
In the event all or any portion of the Notes are to be redeemed through
such irrevocable trust, the Company must make arrangements reasonably
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
Section 8.02 Satisfaction and Discharge.
--------------------------
In addition to the Company's rights under Section 8.01, the Company may
terminate all of its obligations under this Indenture (subject to Section 8.03),
when:
(i) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 and Notes for whose payment
money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged
from such trust) have been delivered to the Trustee for cancellation or all
such Notes not theretofore delivered to the Trustee for cancellation have
become due and payable and the Company has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for that
purpose an amount of money sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest;
(ii) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
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(iii) the Company has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Notes at maturity or
redemption, as the case may be; and
(iv) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, stating that all conditions precedent specified
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
Section 8.03 Survival of Certain Obligations.
-------------------------------
Notwithstanding the satisfaction and discharge of this Indenture and of the
Notes referred to in Section 8.01 or 8.02, the respective obligations of the
Company and the Trustee under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10,
2.13, 4.01, 4.02, 6.07, Article Seven, 8.05, 8.06 and 8.07 shall survive until
the Notes are no longer outstanding, and thereafter the obligations of the
Company and the Trustee under Sections 7.07, 8.05, 8.06 and 8.07 shall survive.
Nothing contained in this Article Eight shall abrogate any of the obligations or
duties of the Trustee under this Indenture.
Section 8.04 Acknowledgment of Discharge by Trustee.
--------------------------------------
Subject to Section 8.07, after (i) the conditions of Section 8.01 or 8.02
have been satisfied, (ii) the Company has paid or caused to be paid all other
sums payable hereunder by the Company and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon written request shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified in Section 8.03.
Section 8.05 Application of Trust Moneys.
---------------------------
The Trustee shall hold any U.S. Legal Tender or U.S. Government Obligations
deposited with it in the irrevocable trust established pursuant to Section 8.01.
The Trustee shall apply the deposited U.S. Legal Tender or the U.S. Government
Obligations, together with earnings thereon, through the Paying Agent, in
accordance with this Indenture and the terms of the irrevocable trust agreement
established pursuant to Section 8.01, to the payment of principal of and
interest on the Notes. Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the Company's request any U.S. Legal Tender or U.S. Government
Obligations held by it as provided in Section 8.01(d) hereof which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
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Section 8.06 Repayment to the Company; Unclaimed Money.
-----------------------------------------
Subject to Sections 7.07, 8.01 and 8.02, the Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess U.S. Legal Tender or
U.S. Government Obligations held by them at any time. The Trustee and the Paying
Agent will pay to the Company upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal or interest that remains unclaimed for two years after
payment to the Holders is required; provided, however, that the Trustee and the
Paying Agent before being required to make any payment may, but need not, at the
expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein, which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company, Holders entitled to money must look
solely to the Company for payment as general creditors unless an applicable
abandoned property law designated another Person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
Section 8.07 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.01 or 8.02 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 or 8.02 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.01 or 8.02; provided, however, that if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or United States Government
Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
-----------------------------------
Section 9.01 Without Consent of Holders.
--------------------------
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not adversely affect the rights of any Holder
in any material respect;
(ii) to comply with Article Five;
58
<PAGE>
(iii) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(iv) to comply with any requirements of the SEC 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 or that does not adversely affect the rights of any
Holder;
(vi) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will
be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities; or
(vii) to make any other change that does not adversely affect in any
material respect the rights of any Holders hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officer's Certificate stating that such amendment or supplement complies with
the provisions of this Section 9.01.
Section 9.02 With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the outstanding
Notes, may amend or supplement this Indenture or the Notes without notice to any
other Holders. Subject to Section 6.07, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Notes may waive compliance by the
Company with any provision of this Indenture or the Notes without notice to any
other Holder. No amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, shall, without the consent of each Holder of each Note affected
thereby:
(i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver of any provision of this Indenture or the
Notes;
(ii) reduce the rate of or change or have the effect of changing the
time for payment of interest on any Notes;
(iii) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(iv) make any Notes payable in money other than that stated in the
Notes;
59
<PAGE>
(v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Note on or after the due date thereof or to bring suit to enforce such
payment, permitting holders of a majority in principal amount of a class of
Notes to waive Defaults or Events of Default, other than waivers with
respect to ones with respect to the payment of principal of or interest on
the Notes, or relating to certain amendments of this Indenture; or
(vi) modify or change any provisions of this Indenture (including the
related definitions) so as to adversely affect the ranking of any Notes;
provided, however, the Company may, with the consent of the Holder or Holders of
75% in aggregate principal amount of the outstanding Notes, amend, modify or
change the obligation of the Company to make or consummate a Change of Control
Offer in the event of a Change of Control or make and consummate a Net Proceeds
Offer in respect of any Asset Sale that has been consummated or modify any of
the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
Section 9.03 Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. 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
60
<PAGE>
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(6) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
Section 9.05 Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver the Note to the Trustee.
The Trustee at the written direction of the Company may place an appropriate
notation on the Note about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Any such notation or exchange shall be made at
the sole cost and expense of the Company.
Section 9.06 Trustee To Sign Amendments, Etc.
--------------------------------
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided 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. 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 Nine
is authorized or permitted by this Indenture. Such Opinion of Counsel shall not
be an expense of the Trustee.
ARTICLE X
MISCELLANEOUS
-------------
Section 10.01 TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
61
<PAGE>
Section 10.02 Notices.
-------
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Coinmach Corporation
55 Lumber Road
Roslyn, New York 11576
Attn: Chief Executive Officer
Telecopy Number: (516) 484-1812
if to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Attn: Corporate Trust Administration Department
Telecopy Number: (203) 986-7920
Each of the Company and the Trustee by written notice to each other such
Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first class mail or other equivalent means at such Holder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Section 10.03 Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA (S)
312(c).
62
<PAGE>
Section 10.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee upon
request:
(i) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent to be performed by the Company, if any, provided
for in this Indenture relating to the proposed action have been complied
with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
Section 10.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(i) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
Section 10.06 Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
Section 10.07 Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
63
<PAGE>
Section 10.08 Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
Section 10.09 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 10.10 No Recourse Against Others.
--------------------------
A past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or of the Trustee shall not have any
liability for any obligations of the Company under the Notes or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
Section 10.11 Successors.
----------
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 10.12 Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
Section 10.13 Severability.
------------
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
64
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
COINMACH CORPORATION
By: /s/ Robert M. Doyle
_______________________________
Name: Robert M. Doyle
_____________________________
Title: Senior Vice President
______________________________
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Philip G. Kane, Jr.
_______________________________
Name: Philip G. Kane, Jr.
_____________________________
Title: Vice President
______________________________
65
<PAGE>
EXHIBIT A
---------
[FORM OF NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE " SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501 (A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES FOR THE BENEFIT OF THE ISSUER
THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS SECURITY OR THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY AN AFFILIATE
OF THE ISSUER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR ANY OTHER AVAILABLE EXEMPTION UNDER THE ACT, OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
ANY CERTIFICATED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS SECURITY OR THE LAST DATE ON WHICH SUCH CERTIFICATED SECURITY
WAS HELD BY AN AFFILIATE OF THE ISSUER, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE OF SUCH CERTIFICATED SECURITY RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT SUCH CERTIFICATED SECURITY TO THE TRUSTEE. IF ANY PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION, "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1
<PAGE>
CUSIP NO.:
COINMACH CORPORATION
11 3/4% SERIES C SENIOR NOTE DUE 2005
No. $
Coinmach Corporation, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on November 15, 2005.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
Coinmach Corporation
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Dated:
Certificate of Authentication
This is one of the 11 3/4% Series C Senior Notes due 2005 referred to in
the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY
Dated: By:
-----------------------------------
Authorized Signatory
A-2
<PAGE>
(REVERSE OF SECURITY)
11 3/4% SERIES C SENIOR NOTE DUE 2005
1. Interest. Coinmach Corporation, a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from October 8, 1997. The Company will pay interest semiannually in arrears on
each Interest Payment Date, commencing November 15, 1997. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
--------------------------
Company (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.
4. Indenture. The Company issued the Notes under an Indenture, dated as
---------
of October 8, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of them. The Notes are general unsecured obligations of the
Company limited in aggregate principal amount to $296,655,000; provided that
$196,655,000 shall be reserved for issuance and shall be available for issuance
only in connection with the exchange of the Series A/B Notes (as defined in the
Indenture) for Exchange Notes. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
5. Redemption.
----------
(a) Optional Redemption. The Notes will be redeem able, at the
-------------------
Company's option, in whole or in part at any time or from time to time, on and
after November 15, 2000, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period
A-3
<PAGE>
commencing on November 15 of the year set forth below, plus, in each case,
accrued interest thereon to the date of redemption:
Year Percentage
- ---- ----------
2000 105.8750%
2001 102.9375%
2002 and thereafter 100.0000%
(b) Optional Redemption Upon Equity Offerings. At any time, or from
-----------------------------------------
time to time, on or prior to December 31, 1998, the Company may, at its option,
use the net cash proceeds of one or more Equity Offerings (as defined in the
Indenture) to redeem up to 35% of the outstanding Notes (including any
Additional Series D Senior Notes, as defined in the Indenture) at a redemption
price equal to 111 3/4% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 65%
of the original aggregate principal amount of Notes (including any Additional
Series D Senior Notes) remains outstanding immediately after any such
redemption. In order to effect the foregoing redemption with the proceeds of any
Equity Offering, the Company shall make such redemption not more than 120 days
after the consummation of any such Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
--------------------
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
7. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
------------------
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes (including any Additional Series D Senior
Notes) in accordance with the procedures set forth in the Indenture.
8. Registration Rights. Pursuant to the Registration Rights Agreement
-------------------
among the Company and the Holders of the Initial Notes, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Note shall have the right to exchange this Note for the Company's Series D 11
3/4% Senior Notes due 2005 (the "Exchange Notes"), which have been registered
under the Securities Act, in like principal amount and having terms identical in
all material respects as the Initial Notes. The Holders of the Initial Notes
shall be entitled to receive certain additional interest payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
A-4
<PAGE>
9. Denominations; Transfer; Exchange. The Notes are in registered form,
---------------------------------
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange of Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any time
-----------------------------------------
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place or
certificated Note, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets, enter into a Sale
Leaseback Transaction or adopt a plan of liquidation. Such limitations are
subject to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
A-5
<PAGE>
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture. The
Trustee is not obligated to enforce the Indenture or the Notes unless it has
received indemnity reasonably satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the Notes then outstanding to direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default of Event of Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No past, present or future stockholder,
--------------------------
director, officer, employee or incorporator, as such, of the Company shall have
any liability for any obligation of the Company under the Notes or the Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder of a Note by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee or
--------------
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The laws of the State of New York shall govern this
-------------
Note and the Indenture, without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be used
-------------------------------
in the name of a Holder of a Note or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made to the accuracy of such numbers as printed on
the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: Coinmach
Corporation, 55 Lumber Road, Roslyn, New York 11576, Attn: Chief Executive
Officer.
A-6
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________________________ Signed:____________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:______________________________________
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) October 8, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
[Check One]
---------
(1) -- to the Company or a subsidiary thereof; or
(2) -- pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) -- to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) -- outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
A-7
<PAGE>
(5) -- pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) -- pursuant to an effective registration statement under the Securities
Act; or
(7) -- pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.16 of the Indenture shall have been satisfied.
Date:_________________________Signed:________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:__________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Date:_______________________ _________________________________________________
NOTICE: To be executed by an executive officer
A-8
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$__________________
Date:________________ Signed:_______________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the face of
the within Note in every particular without alteration
or enlargement or any change whatsoever and be
guaranteed by the endorser's bank or broker.
Signature Guarantee:___________________________________________________________
A-9
<PAGE>
EXHIBIT B
---------
CUSIP NO.:
COINMACH CORPORATION
11 3/4% SERIES D SENIOR NOTE DUE 2005
No. $
Coinmach Corporation, a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on November 15, 2005.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
Coinmach Corporation
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Dated:
Certificate of Authentication
This is one of the 11 3/4% Series D Senior Notes due 2005 referred to in
the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
Dated: By:
---------------------------------------
Authorized Signatory
B-1
<PAGE>
(REVERSE OF SECURITY)
11 3/4% SERIES D SENIOR NOTE DUE 2005
1. Interest. Coinmach Corporation, a Delaware corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid on this Note or on the Initial Note
to which the Note relates or, if no interest has been paid, from October 8,
1997. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing November 15, 1997. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
--------------------------
Company (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.
4. Indenture. The Company issued the Notes under an Indenture, dated as
---------
of October 8, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of them. The Notes are general unsecured obligations of the
Company limited in aggregate principal amount to $296,655,000; provided that
$196,655,000 shall be reserved for issuance and shall be available for issuance
only in connection with the exchange of the Series A/B Notes (as defined in the
Indenture) for Exchange Notes. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
5. Redemption.
----------
(a) Optional Redemption. The Notes will be redeemable, at the
-------------------
Company's option, in whole or in part at any time or from time to time, on and
after November 15, 2000, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on
November 15 of the year set forth below, plus, in each case, accrued interest
thereon to the date of redemption:
B-2
<PAGE>
Year Percentage
- ---- ----------
2000 105.8750%
2001 102.9375%
2002 and thereafter 100.0000%
(b) Optional Redemption Upon Equity Offerings. At any time, or from
-----------------------------------------
time to time, on or prior to December 31, 1998, the Company may, at its option,
use the net cash proceeds of one or more Equity Offerings (as defined in the
Indenture) to redeem up to 35% of the outstanding Notes (including any
Additional Series D Senior Notes, as defined in the Indenture) at a redemption
price equal to 111 3/4% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 65%
of the original aggregate principal amount of Notes (including any Additional
Series D Senior Notes) remains outstanding immediately after any such
redemption. In order to effect the foregoing redemption with the proceeds of any
Equity Offering, the Company shall make such redemption not more than 120 days
after the consummation of any such Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
--------------------
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes called for redemption shall have been deposited with the Paying Agent for
redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.
7. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture provide
------------------
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes (including any Additional Series D Senior
Notes) in accordance with the procedures set forth in the Indenture.
8. Denominations; Transfer; Exchange. The Notes are in registered form,
---------------------------------
without coupons, in denominations of $1,000 and integral multiples of $1,000. A
Holder shall register the transfer of or exchange of Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
9. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
B-3
<PAGE>
10. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity. If the Company at any time
-----------------------------------------
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
12. Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place or
certificated Note, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
13. Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, make payments in respect of its
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets, enter into a Sale
Leaseback Transaction or adopt a plan of liquidation. Such limitations are
subject to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
14. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
15. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture. The
Trustee is not obligated to enforce the Indenture or the Notes unless it has
received indemnity reasonably satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the Notes then outstanding to direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from Holders of
Notes notice of any continuing Default of Event of Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
16. Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
B-4
<PAGE>
17. No Recourse Against Others. No past, present or future stockholder,
--------------------------
director, officer, employee or incorporator, as such, of the Company shall have
any liability for any obligation of the Company under the Notes or the Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder of a Note by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
the issuance of the Notes.
18. Authentication. This Note shall not be valid until the Trustee or
--------------
Authenticating Agent manually signs the certificate of authentication on this
Note.
19. Governing Law. The laws of the State of New York shall govern this
-------------
Note and the Indenture, without regard to principles of conflict of laws.
20. Abbreviations and Defined Terms. Customary abbreviations may be used
-------------------------------
in the name of a Holder of a Note 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).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made to the accuracy of such numbers as printed on
the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture. Requests may be made to: Coinmach
Corporation, 55 Lumber Road, Roslyn, New York 11576, Attn: Chief Executive
Officer.
B-5
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:____________________________ Signed:___________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee:__________________________________________________________
B-6
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$__________________
Date:________________________ Signed:________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee:____________________________________________________________
B-7
<PAGE>
EXHIBIT C
---------
FORM OF LEGEND FOR GLOBAL NOTES
Any Global Note authenticated and delivered hereunder shall bear a legend
(which would be in addition to any other legends required in the case of a
Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION("DTC"), TO ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
C-1
<PAGE>
EXHIBIT D
---------
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
-----------------------------------------
________________, ____
State Street Bank and Trust Company
MSN 238
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Re: Coinmach Corporation (the "Company")
11 3/4% Senior Notes due 2005 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_______________ aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated October 1, 1997, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Transfer Restrictions" of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of
October 8, 1997 relating to the Notes (the "Indenture") and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell or otherwise transfer any Notes prior to the date which
is within three years after the original issuance of the Notes or the last date
on which the Note is owned by an affiliate of the Company, we will do so only
(i) to the Company or any of its subsidiaries, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act), (iii) inside the
United States to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Notes, substantially
in the form of this letter, (iv) outside the United States in accordance with
Rule 904 of Regulation S under the Securities Act, (v) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if available),
or (vi) pursuant to an effective registration statement under the
D-1
<PAGE>
Securities Act, and we further agree to provide to any person purchasing any of
the Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed sale of any Notes, we will be
required to furnish to you and the Company such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You, the Company and the Initial Purchasers (as defined in the Offering
Memorandum) are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby, and we agree to notify you promptly if any of our
representations or warranties herein cease to be accurate and complete.
This letter shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to principles of conflicts of laws.
Very truly yours,
[Name of Transferee]
By: __________________________________
Authorized Signature
D-2
<PAGE>
EXHIBIT E
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
__________________, _____
State Street Bank and Trust Company
MSN 238
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Re: Coinmach Corporation (the "Company") 11 3/4% Senior Notes due
2005 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $_____________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the Unites States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
E-1
<PAGE>
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
[Name of Transferee]
By: __________________________________
Authorized Signature
E-2
<PAGE>
EXHIBIT 10.1
$100,000,000
COINMACH CORPORATION
11 3/4% SERIES C SENIOR NOTES DUE 2005
PURCHASE AGREEMENT
Dated as of October 1, 1997
JEFFERIES & COMPANY, INC.
LAZARD FRERES & CO. LLC
BT ALEX. BROWN INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
c/o Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Ladies and Gentlemen:
Coinmach Corporation, a Delaware corporation (the "Company"), proposes,
upon the terms and conditions set forth herein, to issue and sell to the
purchasers named in Schedule I hereto (the "Initial Purchasers"), $100,000,000
aggregate principal amount of its 11 3/4% Series C Senior Notes due 2005 (the
"Securities"). The Securities will be issued pursuant to the provisions of an
Indenture, to be dated as of October 8, 1997 (the "Indenture"), between the
Company and State Street Bank and Trust Company, as Trustee (the "Trustee").
The Company wishes to confirm as follows its agreement with the Initial
Purchasers in connection with the purchase and resale of the Securities.
1. Offering Memorandum. The Securities will be offered and sold to the
Initial Purchasers without registration under the Securities Act of 1933 (the
"Act"), in reliance on an exemption pursuant to Section 4(2) under the Act. The
Company has prepared an offering memorandum, dated October 1, 1997 (the
"Offering Memorandum"), setting forth information regarding the Company and the
Securities. Any references herein to the Offering Memorandum shall be deemed to
include all amendments and supplements thereto and all documents incorporated by
reference therein. The Company hereby confirms that it has authorized the use
of the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make offers
and sales (the "Exempt Resales") of the Securities purchased by the Initial
Purchasers hereunder only on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, (i) to persons
whom the Initial Purchasers reasonably believe to be qualified institutional
buyers ("Qualified
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<PAGE>
Institutional Buyers") as defined in Rule 144A under the Act, as such rule may
be amended from time to time ("Rule 144A"), in transactions under Rule 144A and
(ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Act)
("Accredited Investors") in private sales exempt from registration under the Act
(such persons specified in clauses (i) and (ii) being referred to herein as the
"Eligible Purchasers").
It is understood and acknowledged that upon original issuance thereof, and
until such time as the same is no longer required under the applicable
requirements of the Act, each of the Securities (and each security issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE " SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT,
WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY
OR THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF THE
ISSUER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR ANY OTHER
AVAILABLE EXEMPTION UNDER THE ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF ANY
CERTIFICATED SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS SECURITY OR THE LAST DATE ON
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WHICH SUCH CERTIFICATED SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH CERTIFICATED SECURITY
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH CERTIFICATED
SECURITY TO THE TRUSTEE. IF ANY PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION, "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
It is also understood and acknowledged that holders (including subsequent
transferees) of the Securities will have the registration rights set forth in
the registration rights agreement (the "Registration Rights Agreement")
substantially in the form attached hereto as Exhibit A, to be dated as of
October 8, 1997 by and between the Company and the Initial Purchasers. Pursuant
to the Registration Rights Agreement, the Company will agree, among other
things, to file a registration statement under the Act relating to the Company's
debt securities (the "Exchange Notes") to be issued under the Indenture and
offered in exchange for the Securities (such offer to exchange being referred to
as the "Exchange Offer").
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture.
2. Agreements to Sell, Purchase and Resell. Upon the basis of the
representations, warranties and agreements of the Company and the Initial
Purchasers herein contained and subject to the terms and conditions set forth
herein, the Company hereby agrees to issue and sell to the Initial Purchasers,
and the Initial Purchasers agree to purchase from the Company, at a purchase
price of 108.375% of the principal amount thereof, $100,000,000 principal amount
of Securities.
(b) The Initial Purchasers have advised the Company that they propose
to offer the Securities for sale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum. Each Initial Purchaser hereby
represents and warrants to the Company that it is a Qualified Institutional
Buyer and an Accredited Investor, and agrees that it will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of 502(c) under the Act,
or in any manner involving a public distribution or offering of the Securities
within the meaning of the Act, and will solicit offers for the Securities
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<PAGE>
only from, and will offer, sell or deliver the Securities as part of their
initial offering, only to persons whom it reasonably believes to be Qualified
Institutional Buyers or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a Qualified Institutional Buyer, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and, in each case,
in transactions in reliance upon Rule 144A and to a limited number of other
institutional investors who prior to their purchase of the Securities represent
to the Company that they are Accredited Investors, pursuant to a letter
substantially in the form of Annex A to the Offering Memorandum. Each Initial
Purchaser agrees to use its best efforts to deliver a definitive copy of the
Offering Memorandum to each person to whom the Securities are resold by such
Initial Purchaser substantially contemporaneously with the Closing Date. The
Initial Purchasers have advised the Company that they will offer the Securities
at a price initially equal to 109.875% of the principal amount thereof, plus
accrued interest, if any, from the date of issuance of the Securities. Such
price may be changed by the Initial Purchasers at any time thereafter without
notice.
3. Delivery of the Securities and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Securities shall be made at the office
of Anderson, Kill & Olick, P.C., 1251 Avenue of the Americas, New York, New
York, at 10:00 a.m., New York City time, on October 8, 1997 (the "Closing
Date"). The place of closing for the Securities and the Closing Date may be
varied by agreement between the Initial Purchasers and the Company.
The Securities will be delivered to the Initial Purchasers against payment
of the purchase price therefor by means of a wire transfer of same day funds in
accordance with written instructions from the Company. The Securities will be
evidenced by a single global security in definitive form (the "Global Security")
and/or by additional certificated securities, and will be registered, in the
case of a Global Security, in the name of Cede & Co. as nominee of The
Depository Trust Company ("DTC"), and in the other cases, in such names and in
such denominations as the Initial Purchasers shall request prior to 9:30 a.m.,
New York City time, on the business day preceding the Closing Date. The
Securities to be delivered to the Initial Purchasers shall be made available to
the Initial Purchasers in New York City for inspection and packaging not later
than 9:30 a.m., New York City time, on the business day next preceding the
Closing Date.
4. Agreements of the Company. The Company agrees with the Initial
Purchasers as follows:
(a) Until the completion of the distribution of the Securities by the
Initial Purchasers to Eligible Purchasers, the Company will advise the Initial
Purchasers promptly and, if requested by the Initial Purchasers, will confirm
such advice in writing, within the period of time referred to in paragraph (e)
below, of any change in the condition (financial or other), business, properties
or results of operations of the Company and the Subsidiaries (as defined
herein), taken as a whole, or of the happening of any event or the existence of
any condition known to the Company which requires any amendment or supplement to
the Offering Memorandum so that the Offering Memorandum (x) will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
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<PAGE>
of the circumstances under which they were made, not misleading or (y) will
comply with applicable law.
(b) The Company will furnish to the Initial Purchasers, without
charge, as of the date of the Offering Memorandum, such number of copies of the
Offering Memorandum, as may then be amended or supplemented, as the Initial
Purchasers may reasonably request.
(c) The Company will not make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which they shall reasonably object after being so advised.
(d) The Company consents to the use of the Offering Memorandum in
accordance with the securities or Blue Sky laws of the jurisdictions in which
the Securities are offered by the Initial Purchasers and by all dealers to whom
Securities may be sold, in connection with the offering and sale of the
Securities; provided, however, that in no event shall the Company be required to
qualify as a foreign corporation or as a broker-dealer in any jurisdiction where
it is not now so qualified or to take any action which would subject it to
service of process in suits or to taxation in any jurisdiction where it is not
now so qualified or subject.
(e) If at any time prior to completion of the distribution of the
Securities by the Initial Purchasers to the Eligible Purchasers any event shall
occur or otherwise exist that in the judgment of the Company or in the
reasonable opinion of the Initial Purchasers should be set forth in the Offering
Memorandum so that the Offering Memorandum will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or will comply with
applicable law, the Company will forthwith prepare an appropriate supplement or
amendment thereto, and will promptly furnish to the Initial Purchasers that
number of copies thereof as it shall reasonably request.
(f) The Company will cooperate with the Initial Purchasers and with
their counsel in connection with the qualification of the Securities 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 consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided that in no event
shall the Company be obligated to qualify as a foreign corporation or as a
broker-dealer in any jurisdiction where it is not now so qualified or to take
any action which would subject it to service of process in suits or to taxation
in any jurisdiction where it is not now so qualified or subject.
(g) So long as any of the Securities are outstanding, the Company will
furnish to the Initial Purchasers as promptly as practicable after available, a
copy of each report of the Company mailed to stockholders or filed with the
Securities and Exchange Commission (the "Commission") and from time to time
such other information concerning the Company as the Initial Purchasers may
reasonably request.
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<PAGE>
(h) The Company will apply the net proceeds from the sale of the
Securities substantially in accordance with the description set forth under "Use
of Proceeds" in the Offering Memorandum.
(i) Without the prior consent of the Initial Purchasers, prior to the
expiration of 180 days after the date of the Offering Memorandum, the Company
will not offer, sell, contract to sell or otherwise dispose of any debt
securities registered under the Act or privately sold pursuant to Rule 144A
under the Act, other than as contemplated by the Registration Rights Agreement.
(j) Except as stated in this Agreement and in the Offering Memorandum,
the Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Securities to facilitate the
sale or resale of the Securities. Except as permitted by the Act, the Company
will not distribute any offering material in connection with the Exempt Resales.
The Company will not solicit any offers to buy and will not offer to sell the
Securities by means of any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act).
(k) The Company will use its reasonable best efforts to cause the
Securities to be eligible for trading on the Private Offerings, Resale and
Trading through Automated Linkages ("PORTAL") Market.
(l) From and after the Closing Date, so long as any of the Securities
are outstanding and are "restricted securities" within the meaning of the Rule
144(a)(3) under the Act or, if earlier, until two years after the Closing Date
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Company will furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Act to permit compliance with Rule 144A in connection
with resales of the Securities.
(m) The Company agrees not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the sale by the Company to the Initial
Purchasers or by the Initial Purchasers to the Eligible Purchasers of the
Securities.
(n) The Company agrees to comply with all agreements set forth in the
representation letter of the Company to DTC relating to the approval of the
Securities by DTC for "book entry" transfer.
5. Representations and Warranties of the Company. The Company represents
and warrants to the Initial Purchasers that:
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<PAGE>
(a) The Offering Memorandum with respect to the Securities has been
prepared by the Company for use by the Initial Purchasers in connection with the
Exempt Resales. No order or decree preventing the use of the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act, has been
issued and no proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company, is contemplated.
(b) The Offering Memorandum as of its date and as of the Closing Date,
did not or will not at any time on or before the Closing Date 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 light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Offering Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein.
(c) The Indenture has been duly and validly authorized by the Company
and, upon its execution, delivery and performance by the Company and assuming
due authorization, execution, delivery and performance by the Trustee, will be a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law); the Indenture conforms in all material respects to the description
thereof in the Offering Memorandum; no qualification of the Indenture under the
1939 Act is required in connection with the offer and sale of the Securities
contemplated hereby or in connection with the Exempt Resales.
(d) The Securities have been duly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with the
Indenture and delivered to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to the enforcement of creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law); and the Securities conform in all material respects to the
description thereof in the Offering Memorandum. The Exchange Notes have been
duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the Exchange Offer and the
Indenture, will have been validly issued and delivered, and will constitute
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy,
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<PAGE>
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or thereafter in effect relating to the enforcement of creditors'
rights generally and subject to the applicability of general principles of
equity and the discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(e) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as presently conducted, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature or location of its properties (owned or leased) or the
conduct of its business requires such registration or qualification, except
where the failure to so register or qualify does not have a material adverse
effect on the condition (financial or other), business, properties or results of
operations of the Company or any Subsidiary (as hereinafter defined) that is or
would be, singly or in the aggregate, material to the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect").
(f) Each corporation in which the Company owns fifty percent (50%) or
more of any class of securities (collectively, the "Subsidiaries") and each
partnership of which the Company or any Subsidiary is a general partner or owns
fifty percent (50%) or more of the partnership interests is listed on Schedule A
hereto. Each Subsidiary is a corporation duly organized and validly existing,
and in good standing in the jurisdiction of its incorporation with all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as presently conducted. Each Subsidiary is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature or location of its properties (owned or
leased) or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does not have
a Material Adverse Effect.
(g) Except as disclosed in the Offering Memorandum, each of the
Company and the Subsidiaries have all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all regulatory
or governmental officials, bodies and tribunals ("Permits"), to own or lease its
respective properties and to conduct its respective businesses as presently
conducted or where failure to have obtained the same will not have a Material
Adverse Effect, and neither the Company, nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
Permits, if the failure to be so licensed or approved or if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect;
each of the Company and the Subsidiaries have fulfilled and performed all its
current material obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time, or both, would allow,
revocation or termination thereof or result in any other material impairment of
the rights of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Offering Memorandum, except where the
failure to do so will not have a Material Adverse Effect; and, except as
described in the Offering Memorandum and as is customary in the areas where the
properties of the Company or any Subsidiary are located, such Permits contain no
restrictions that are materially burdensome to the Company or the Subsidiaries
taken as a whole; and each of the Company and the Subsidiaries are in compliance
with all applicable laws, rules,
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<PAGE>
regulations, orders and consents, the violation of which would have a Material
Adverse Effect. The property and business of the Company and the Subsidiaries
conform in all material respects to the descriptions thereof contained in the
Offering Memorandum.
(h) All of the Company's issued and outstanding capital stock has been
duly authorized, validly issued and is fully paid and non-assessable as of the
date hereof and the capitalization of the Company conforms in all material
respects to the descriptions thereof in the Offering Memorandum.
(i) All the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and non-
assessable, and all outstanding shares of capital stock of each Subsidiary are
owned by the Company, either directly or through wholly-owned Subsidiaries, free
and clear of any security interests, claims, liens or encumbrances, except that
the capital stock of certain of the Subsidiaries has been pledged in favor of
the lenders pursuant to the Credit Facility (as defined in the Offering
Memorandum).
(j) Each of the Company and the Subsidiaries have generally
satisfactory title to all properties and assets owned by them, free of all
liens, charges, encumbrances or restrictions, except such as are described in
the Offering Memorandum, permitted by the Indenture or such as are not
burdensome and do not interfere with the use of the property or the conduct of
the business of the Company and the Subsidiaries in a manner that is or would be
material to the business of the Company and the Subsidiaries taken as a whole.
The Company and each Subsidiary have valid and subsisting leases for the
properties leased by them, with such exceptions as in the aggregate are not
materially burdensome and do not interfere with the conduct of the business of
the Company and the Subsidiaries in a manner that is or would be material to the
business of the Company and the Subsidiaries taken as a whole.
(k) The Company and the Subsidiaries own, or possess adequate rights
to use, all trademarks, service marks and other rights necessary for the conduct
of their businesses, and neither the Company nor any Subsidiary has received any
written notice of conflict with the asserted rights of others in any such
respect that would materially adversely affect the business of the Company, and
its Subsidiaries as a whole. No claims have been asserted and the Company has
not received any notice of conflict with (or knows of any such conflict with)
asserted rights of others with respect to the use, validity or the effectiveness
of any trademarks, service marks, trade names or know-how which, if such claim
or assertion of conflict were the subject of any unfavorable decision, ruling or
finding would individually or in the aggregate have a Material Adverse Effect.
(l) The accountants, Ernst & Young, LLP, who have certified or shall
certify the financial statements included or incorporated by reference in the
Offering Memorandum, are independent accountants with respect to the Company and
the Subsidiaries as required by the Act.
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<PAGE>
(m) The Company's Annual Report on Form 10-K for the Year Ended March
28, 1997 (the "Annual Report") and the Company's Quarterly Report on Form 10-Q
for the Three Months Ended June 27, 1997 (the "Quarterly Reports") at the time
they were filed with the Commission complied in all material respects with the
requirements of the Exchange Act. The Annual Report and the Quarterly Report
when they were filed contained no untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(n) Neither the Company nor any Subsidiary is in violation of (i) its
respective charter or by-laws or similar organizational documents, (ii) any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or any Subsidiary, or (iii) any franchise, license, permit, judgment or
any decree of any court or governmental agency or body having jurisdiction over
the Company or any Subsidiary, in each case the effect of which violation would
have a Material Adverse Effect, or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, bond, debenture, bank loan,
credit agreement or other agreement, instrument or evidence of indebtedness
(including, without limitation, the Credit Agreement) to which the Company or
any Subsidiary or Coinmach Laundry is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any
Subsidiary is subject, the effect of which default in performance or observance
would have a Material Adverse Effect.
(o) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any Subsidiary, or
to which any of their respective properties is subject, that are not disclosed
in the Offering Memorandum and that, if adversely decided, could reasonably be
expected to have a Material Adverse Effect or to materially adversely affect the
issuance of the Securities or the consummation of the transactions contemplated
by this Agreement. There are no agreements, contracts, indentures, leases or
other documents or instruments of the Company or any Subsidiary that are
material to the Company and the Subsidiaries, taken as a whole, that are
required to be disclosed in the Offering Memorandum and not disclosed therein.
(p) To the Company's knowledge, neither the Company nor any of the
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary, or has received or
retained any funds, in violation of any law or rule or regulation.
(q) Neither the Company nor any of the Subsidiaries is involved in any
labor dispute or, to the knowledge of the Company, is any such dispute
threatened, other than disputes that the Company reasonably anticipates will not
have a Material Adverse Effect.
(r) Each of the Company and the Subsidiaries have filed all federal,
state and local tax returns that are required to be filed (other than returns
with respect to which failure to so file would not have a Material Adverse
Effect) or have obtained extensions thereof and have paid all taxes shown on
such returns and all assessments received by it to the extent that the same have
become due, other than those being contested in good faith or those currently
payable without
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penalty or interest and except where the failure to so pay is not reasonably
likely to have, singly or in the aggregate, a Material Adverse Effect.
(s) Except for the shares of capital stock of each of the
Subsidiaries, neither the Company nor any of the Subsidiaries owns any share of
stock or any other securities of any corporation or has any equity interest in
any firm, partnership, association or other entity material in amount in
relation to the net assets of the Company and the Subsidiaries taken as a whole,
other than as reflected in the consolidated financial statements included in the
Offering Memorandum.
(t) Except for the consent required under the Credit Facility, which
the Company will obtain on or prior to the Closing Date, neither the issuance,
offer, sale or delivery of the Securities by the Company, the execution,
delivery or performance of this Agreement or the Indenture by the Company or the
consummation by the Company of the transactions contemplated hereby or thereby
(i) requires any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may have been
obtained or may be required in connection with the registration under the Act of
the Securities in accordance with the Registration Rights Agreement, the
qualification of the Indenture under the 1939 Act and except for compliance with
the securities or Blue Sky laws of various jurisdictions), or conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the certificate or articles of incorporation or bylaws, or other organizational
documents, of the Company or any Subsidiary or (ii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under, any
material agreement, indenture, lease or other instrument to which the Company or
any Subsidiary or Coinmach Laundry is a party or by which any of them or any of
their respective properties may be bound which conflict, breach or default would
have a Material Adverse Effect, or (iii) violates or will violate in any
material respect any statute, law, regulation or filing or judgment, injunction,
order or decree (assuming compliance with all applicable state securities or
"blue sky" laws and assuming the accuracies of the representations and
warranties of the Initial Purchasers in Section 2(b) hereof) applicable to the
Company or any Subsidiary or any of their respective properties, or (iv) will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to the terms of any
agreement or instrument to which either of them is a party or by which either of
them may be bound, the creation of which lien, charge or encumbrance would have
a Material Adverse Effect.
(u) The consolidated financial statements, together with related
schedules and notes included in, or incorporated by reference into the Offering
Memorandum, present fairly the consolidated financial position, results of
operations and changes in stockholders' equity and cash flows of the Company at
the respective dates or for the respective periods to which they apply and have
been prepared in accordance with generally accepted accounting principles
consistently applied, except as otherwise stated therein, throughout the periods
involved. The other financial and statistical information and data set forth
in, or incorporated by reference into, the Offering Memorandum is accurately
presented and, to the extent such information and data is derived from the
financial books and records of the Company, is prepared on a basis consistent
with such financial statements and the books and records of the Company.
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<PAGE>
(v) The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Offering Memorandum
(i) have been prepared in accordance with applicable requirements of Regulation
S-X promulgated under the Exchange Act, (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements, and (iii) have been properly computed on the bases described
therein. The assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the Offering
Memorandum are, in the opinion of the Company, reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(w) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement; the execution and delivery of this Agreement and
the Registration Rights Agreement by the Company, and the performance by the
Company of its obligations under this Agreement and the Registration Rights
Agreement, have been duly and validly authorized by the Company, and each of
this Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Company, and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement hereof and thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights
generally and subject to the applicability of general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law, and except as rights to indemnity and contribution hereunder and
thereunder may be limited by federal or state securities laws or principles of
public policy.
(x) Except as disclosed in the Offering Memorandum, subsequent to the
date as of which such information is given in the Offering Memorandum to the
date hereof, neither the Company nor any Subsidiary has incurred any liability
or obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries, taken as a whole, and there has not been any material change in
the capital stock, or material increase in the short-term or long-term debt, of
the Company or any Subsidiary or, to the knowledge of the Company, any material
adverse change, or any development involving or which could reasonably be
expected to involve a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and the Subsidiaries taken as a whole.
(y) Except as permitted by the Act, the Company has not distributed
and, prior to the later to occur of the Closing Date and completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the Offering
Memorandum.
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(z) The Company is not and, upon sale of the Securities to be issued
and sold thereby in accordance herewith and the application of the net proceeds
to the Company of such sale as described in the Offering Memorandum under the
caption "Use of Proceeds," will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
(aa) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the meaning of
Rule 144A(d)(3) under the Act) as any security of the Company that is listed on
a national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated interdealer quotation system.
(bb) Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Act) has directly, or through
any agent (provided that no representation is made as to the Initial Purchaser
or any person acting on its behalf), sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined in the
Act) which is or will be integrated with the offering and sale of the Securities
in a manner that would require the registration of the Securities under the Act
or engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) in connection with the offering of
the Securities.
(cc) Assuming (i) that the representations and warranties of the
Initial Purchasers in Section 2 hereof are true and correct in all material
respects, (ii) the Initial Purchasers complied with the covenants set forth in
Section 2 hereof, (iii) the Initial Purchasers complied with the offering and
transfer procedures and restrictions described in the Offering Memorandum, (iv)
the accuracy of the representations and warranties made in accordance with this
Agreement and the Offering Memorandum by Eligible Purchasers to whom the Initial
Purchasers initially resell Securities and (v) Eligible Purchasers to whom the
Initial Purchasers initially resell Securities receive a copy of the Offering
Memorandum prior to such sale, the purchase and sale of the Securities pursuant
hereto (including the Initial Purchasers' proposed offering of the Securities on
the terms and in the manner set forth in the Offering Memorandum and Section 2
hereof) do not require registration under the Act.
(dd) The Company and each Subsidiary is in compliance with, and not
subject to any liability under, the common law and all applicable federal,
state, local and foreign laws, regulations, rules, codes, ordinances,
directives, and orders relating to pollution or to protection of public or
employee health or safety or to the environment, including, without limitation,
those that relate to any Hazardous Material (as defined herein) ("Environmental
Laws"), except, in each case, where noncompliance or liability, individually or
in the aggregate, would not have a Material Adverse Effect. The term "Hazardous
Material" means any pollutant, contaminant, hazardous, dangerous, or toxic
chemical, material, waste, substance or constituent, each subject to regulation
under any Environmental Law.
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<PAGE>
Any certificate signed by any officer of the Company (each an "Authorized
Officer") and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Company to the Initial Purchasers as to the
matters covered thereby.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the
Initial Purchasers and their respective officers, shareholders, employees and
directors and any person who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability or claim (including the reasonable cost of
investigating such claim) which, jointly or severally, the Initial Purchasers or
any such officer, shareholder, employee, director or controlling person may
incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement of a material fact contained in the Offering
Memorandum, or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in the Offering Memorandum, or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, except insofar as any such loss,
expense, liability or claim arises out of or is based upon any untrue statement
or omission or alleged untrue statement or omission which has been made therein
or omitted therefrom in reliance upon and in conformity with the information
provided in writing to the Company by or on behalf of the Initial Purchasers
expressly for use in the Offering Memorandum, and the Company agrees that the
only such information provided in writing by or on behalf of the Initial
Purchasers, expressly for use in the Offering Memorandum, is that information
contained in the section entitled "Plan of Distribution," the last paragraph on
the cover page, the "blue sky" legends on page iii, the section entitled "Risk
Factors-Absence of Public Markets" and the word "SUPERtack/TM/" wherever used.
The foregoing indemnity agreement shall be in addition to any liability which
the Company may otherwise have; provided, however, that the indemnity
obligations arising under this Section 6 with respect to the Offering
Memorandum, shall not inure to the benefit of the Initial Purchasers and their
controlling persons and the respective directors, officers and employees if the
person asserting any losses or other claims purchased the Securities from the
Initial Purchasers and if a copy of the Offering Memorandum (as then amended or
supplemented if the Company shall have timely furnished any amendments thereof
or supplements thereto), was not sent or given by the Initial Purchasers or on
their behalf to such persons at or prior to the written confirmation of the sale
of the Securities to such person, and if the Offering Memorandum (as then
amended or supplemented if the Company shall have timely furnished any
amendments thereof or supplements thereto) would have cured the defect giving
rise to such claims or losses.
If any action is brought against the Initial Purchasers or their officers,
shareholders, employees, directors or person who controls any of the Initial
Purchasers (as described above) in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, the Initial Purchasers
shall promptly notify the Company in writing of the institution of such action
(provided, that the failure to give such notice shall not relieve the Company of
any liability which it may have pursuant to this Agreement, unless such failure
has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the Company shall,
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<PAGE>
subject to the terms of this Agreement, assume the defense of such action,
including the employment of counsel and payment of reasonable expenses. The
Initial Purchasers or such officer, shareholder, employee, director or person
who controls any of the Initial Purchasers (as described above) shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Initial Purchasers or of
such persons unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have employed reasonably satisfactory counsel to take charge
of the defense of such action or such indemnified party or parties shall have
been advised by counsel that there may be defenses available to it or them that
are different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company; provided, that the Company shall
only be responsible for the fees and expenses of one counsel for the Initial
Purchasers hereunder. Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which consent shall not be
unreasonably withheld, and such settlement includes an unconditional release of
the Company from all liability on claims that are the subject matter of the
claim or action.
(b) The Initial Purchasers agree, severally and jointly, to indemnify,
defend and hold harmless the Company, each of its directors, officers and
employees and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur under the
Act, the Exchange Act or otherwise, as such expenses are incurred, insofar as
such loss, expense, liability or claim arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made in or omitted from the Offering Memorandum in reliance upon and in
conformity with the information relating to the Initial Purchasers furnished in
writing or failed to be furnished by or on behalf of the Initial Purchasers to
the Company. The Company agrees that the only information provided in writing
by or on behalf of the Initial Purchasers to the Company, expressly for use in
the Offering Memorandum, is that information contained in the section entitled
"Plan of Distribution," the last paragraph on the cover page, the "blue sky"
legends on page iii, the section entitled "Risk Factors-Absence of Public
Markets" and the word "SUPERtack/TM/" wherever used.
If any action is brought against the Company or any such person in respect
of which indemnity may be sought against the Initial Purchasers pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Initial Purchasers in writing of the institution of such action and the Initial
Purchasers shall assume the defense of such action, including the employment of
counsel and payment of reasonable expenses. The Company or such person shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or such
person unless the employment of such counsel shall have been authorized in
writing by the Initial Purchasers in connection with the defense of such action
or the Initial Purchasers shall not have employed reasonably satisfactory
counsel to take charge of the defense of such action or such indemnified party
or parties shall have been advised by counsel that there may be defenses
available to it or them that are different from or additional to
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<PAGE>
those available to the Initial Purchasers (in which case the Initial Purchasers
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Initial Purchasers and paid as incurred. Anything in this
paragraph to the contrary notwithstanding, the Initial Purchasers shall not be
liable for any settlement of any such claim or action effected without the
written consent of the Initial Purchasers, which consent shall not be
unreasonably withheld, and such settlement includes an unconditional release of
the Initial Purchasers from all liability on claims that are the subject matter
of the claim or action. Notwithstanding the provisions of this Section 6, each
Initial Purchaser's indemnification obligations shall be limited to the amount
of the commission received by such Initial Purchaser applicable to the
Securities purchased by such Initial Purchaser hereunder.
(c) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsection (a) or (b) of this Section
6 in respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses,
liabilities or claims 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 Securities or 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 in connection with the
statements or omissions which resulted in such losses, expenses, liabilities or
claims, 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 proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Initial Purchasers. The relative fault of the
Company on the one hand and of the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
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. The amount paid or payable by
a party as a result of the losses, expenses, liabilities and claims referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
(d) The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 6(c) above.
Notwithstanding the provisions of this Section 6, (i) no Initial Purchaser shall
be required to contribute any amount in excess of the discounts, commission and
other compensation, if any, received by such Initial Purchaser applicable to the
Securities purchased by such Initial Purchaser hereunder by reason of such
untrue statement or alleged untrue statement or omission or alleged omission and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
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<PAGE>
(e) The indemnity and contribution agreements contained in this
Section 6 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect irrespective
of any investigation made by or on behalf of the Initial Purchasers, or any of
their officers, employees, directors, shareholders or person who controls any of
the Initial Purchasers within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its respective
directors, officers, employees or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Securities. The Company and the Initial Purchasers agree promptly to notify the
others of the commencement of any litigation or proceeding against it and, in
the case of the Company, against any of its respective officers and directors in
connection with the issuance and sale of the Securities, or in connection with
the Offering Memorandum.
7. Conditions of the Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase the Securities on the Closing Date hereunder
is subject to the fulfillment, in the Initial Purchasers' sole discretion, of
the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company, be
contemplated. No order suspending the sale of the Securities in any jurisdiction
designated by the Initial Purchasers shall have been issued and no proceedings
for that purpose shall have been commenced or shall be pending or, to the
knowledge of the Company, shall be contemplated.
(b) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
condition (financial or other), business, prospects, properties or results of
operations of the Company or any Subsidiary, which in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Securities.
(c) The Initial Purchasers shall not have been advised by the Company
or shall not have reasonably concluded and disclosed to the Company that the
Offering Memorandum contains an untrue statement of a fact which in the opinion
of the Initial Purchasers or their counsel is material or omits to state a fact
which in the opinion of the Initial Purchasers or their counsel is material and
is required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) The Company shall have furnished to the Initial Purchasers the
opinion of Anderson, Kill & Olick, P.C., counsel to the Company, dated the
Closing Date substantially to the effect that:
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(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with all requisite corporate power and authority to own its
properties and conduct its business as presently conducted;
(ii) Each Subsidiary has been duly incorporated or organized and
is validly existing as a corporation or partnership under the laws of the
jurisdiction in which it is incorporated or organized, with all requisite
corporate power and authority to own its properties and conduct its
business as presently conducted; Super Laundry Equipment Corp. and Grand
Wash & Dry Launderette, Inc. are in good standing under the laws of the
respective jurisdictions in which they are incorporated or organized;
(iii) All the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid
and non-assessable. All outstanding shares of capital stock of each
Subsidiary are owned by the Company, free and clear of any security
interests, claims, liens or encumbrances, except as disclosed in the
Offering Memorandum;
(iv) Except as disclosed in the Offering Memorandum, to the
actual knowledge of such counsel, there is no pending or threatened action,
suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Company or each Subsidiary which are
not disclosed in the Offering Memorandum and which, if adversely decided,
could reasonably be expected to have a Material Adverse Effect or
materially affect the issuance of the Securities or the consummation of the
transactions contemplated by this Agreement;
(v) This Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company, and the
Company has full corporate power and authority to enter into this Agreement
and the Registration Rights Agreement;
(vi) Except as disclosed in the Offering Memorandum, to the
actual knowledge of such counsel, no consent, approval, authorization or
order of any federal, New York or Delaware court or governmental agency or
body is required for the consummation of the transactions contemplated
hereby, except such as may be required under the Blue Sky laws of any
jurisdiction in connection with the purchase and resale of the Securities
by the Initial Purchasers (as to which such counsel need express no
opinion) (assuming that any Eligible Purchaser who buys the Securities in
the Exempt Resales is a Qualified Institutional Buyer or an Accredited
Investor, the accuracy of the Initial Purchasers' representations and
those of the Company in this Agreement regarding the absence of general
solicitation in connection with the Exempt Resales, and the accuracy of
the representations made by an Accredited Investor who purchases Securities
pursuant to an Exempt Resale as set forth in the letter of representation
executed by such Accredited Investor in the form of Annex A to the Offering
Memorandum) and such other approvals (specified in such opinion) as have
been obtained or those, the failure to obtain would result in a Material
Adverse Effect;
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<PAGE>
(vii) To such counsel's actual knowledge, neither the Company
nor any Subsidiary (A) is presently in breach of, or in default (nor has an
event occurred that with notice, lapse of time or both would constitute
such a default) under, any indenture, mortgage, deed of trust, note, bond,
debenture, bank loan or credit agreement, or any other evidence of
indebtedness, agreement or instrument to which the Company or any
Subsidiary or Coinmach Laundry is a party, (B) is in violation of its
certificate or articles of incorporation or bylaws or other organizational
documents, or (C) has received any notice of conflict with the asserted
rights of others in respect of trademarks, service marks or other rights
necessary for the conduct of their business, in each case in which such
breach, default, violation or conflict would have a Material Adverse
Effect, except as indicated in the Offering Memorandum;
(viii) Neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated, nor the
fulfillment of the terms hereof, will conflict with, result in a breach of,
or constitute a default under (A) the terms of any indenture or other
agreement or instrument known to such counsel to which the Company or any
Subsidiary or Coinmach Laundry is a party or (B) any federal, New York or
Delaware law, statute, rule or regulation which is normally applicable to
corporations such as the Company, or, to such counsel's knowledge, any
judgment, order, decree, consent or memorandum of understanding of any
federal, New York or Delaware court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of the Subsidiaries (where such breach or default would have
a Material Adverse Effect) (assuming (1) that any Eligible Purchaser who
buys the Securities in the Exempt Resales is a Qualified Institutional
Buyer or an Accredited Investor, (2) the accuracy of the Initial
Purchasers' representations and those of the Company in this Agreement
regarding the absence of general solicitation in connection with the Exempt
Resales, (3) the accuracy of the representations made by an Accredited
Investor who purchases Securities pursuant to an Exempt Resale as set forth
in the letter of representation executed by such Accredited Investor in the
form of Annex A to the Offering Memorandum) (provided that such counsel
need not express any opinion regarding the Blue Sky laws of any
jurisdiction), or the charter or by-laws of the Company;
(ix) The Securities have been duly and validly authorized by the
Company for issuance, and the Company has full corporate power and
authority to issue, sell and deliver the Securities; the Securities, when
executed by the Company and authenticated by the Trustee in accordance with
the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will constitute valid and
legally binding obligations of the Company enforceable against the Company
in accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relative to
creditors' rights generally and subject to the applicability of general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement
is considered in a proceeding in equity or at law);
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<PAGE>
(x) The Exchange Notes have been duly and validly authorized by
the Company for issuance in accordance with the terms of the Indenture;
(xi) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now
or hereafter in effect relative to creditors' rights generally and subject
to the applicability of general principles of equity and the discretion of
the court before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in equity or at
law); the Indenture complies as to form in all material respects with the
requirements of the TIA, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder; it is not
necessary in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers in the manner contemplated by this Agreement or
in connection with the Exempt Resales to qualify the Indenture under the
TIA;
(xii) The statements describing statutes, regulations or legal
or governmental proceedings under the captions "Business and Properties -
Legal Proceedings", "Certain Federal Income Tax Considerations" and
"Transfer Restrictions" in the Offering Memorandum are correct as to legal
matters set forth therein in all material respects;
(xiii) The statements in the Offering Memorandum, insofar as
they are descriptions of contracts, agreements or other legal documents,
are accurate in all material respects and present fairly the information
required to be shown.
(xiv) The Securities issued on the date hereof conform in all
material respects to the description thereof contained in the Offering
Memorandum;
(xv) When the Securities are issued and delivered to the Initial
Purchasers pursuant to this Agreement, such Securities will not be of the
same class (within the meaning of Rule 144A(d)(3) under the Act) as any
security of the Company that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a
United States automated interdealer quotation system;
(xvi) No registration of the Securities under the Act is
required for the sale of the Securities by the Company to the Initial
Purchasers as contemplated in this Agreement or for the Exempt Resales
(assuming (A) that any Eligible Purchaser who buys the Securities in the
Exempt Resales is a Qualified Institutional Buyer or an Accredited
Investor; (B) the accuracy of the Initial Purchasers' representations and
those of the Company in this Agreement regarding, among other things, the
absence of general solicitation in connection with the Exempt Resales, (C)
the accuracy of the representations made by each Accredited Investor who
purchases Securities pursuant to an Exempt Resale as set forth in the
letter of representation executed by such Accredited Investor in the form
of Annex A to the Offering Memorandum and (D) the due performance by the
Initial Purchasers of the agreements set
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<PAGE>
forth in Section 2(b) hereof, it being understood that no opinion is
expressed as to any resale other than the Exempt Resales;
(xvii) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of
the Securities by the Initial Purchasers;
(xviii) The Company is not an "investment company" or subject to
regulation as an "investment company" under the 1940 Act; and
In addition, such counsel shall also state that such counsel has
participated in conferences with representatives of the Initial Purchasers,
officers and other representatives of the Company and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Offering Memorandum and related matters
were discussed and that, although such counsel is not independently
verifying or passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except as set forth in clauses (v), (xii) and (xiii)
of this Section 7(d)), on the basis of the foregoing (relying as to
materiality to a large extent upon officers and other representatives of
the Company), no facts have come to the attention of such counsel which
lead such counsel to believe that the Offering Memorandum as of its date or
the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, that such counsel need not
express any comment with respect to (i) the financial statements and
schedules contained therein or incorporated therein by reference, including
the notes thereto, the auditors' report thereon and the related summary of
accounting policies, and (ii) the other financial and statistical data
included therein (including projections).
The opinions of such counsel relate solely to, are based solely upon
and are limited exclusively to the laws of the State of New York, the
General Corporation Law of the State of Delaware and the federal laws of
the United States of America, to the extent applicable, and are rendered at
the request of the Company to, and may be relied upon solely by, the
Initial Purchasers and shall so state therein.
(e) The Initial Purchasers shall have received on the Closing Date an
opinion of Vinson & Elkins L.L.P., counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial Purchasers, with respect to such
matters as the Initial Purchasers may request.
(f) The Initial Purchasers and the Company shall have received a
letter addressed to the Initial Purchasers, and dated the date hereof and the
Closing Date from Ernst & Young LLP, independent public accountants,
substantially in the form heretofore approved by the Initial Purchasers and the
Company.
-21-
<PAGE>
(g) There shall not have been any material change in the capital stock
of the Company nor any material increase in the short-term or long-term debt of
the Company (other than in the ordinary course of business) from that set forth
or contemplated in the Offering Memorandum (or any amendment or supplement
thereto); there shall not have been, since the respective dates as of which
information is given in the Offering Memorandum, except as may otherwise be
stated in the Offering Memorandum, any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; and the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Offering Memorandum (or any amendment or supplement
thereto); and the Initial Purchasers shall have received a certificate, dated
the Closing Date and signed by the president and the chief financial officer of
the Company (or such other officers as are acceptable to the Initial
Purchasers), to the effect set forth in this Section 7(h) and in Section 7(i)
hereof.
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied in any material respect with any of its agreements
herein contained and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
(i) The Securities shall have been approved for trading on PORTAL.
(j) The Company shall have furnished or caused to be furnished to the
Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers and counsel for the Initial
Purchasers.
Any certificate or document signed by any Authorized Officer of the Company
and delivered to the Initial Purchasers, or to counsel for the Initial
Purchasers, shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the statements made therein.
8. Expenses. (a) Whether or not the purchase and sale of the Securities
hereunder is consummated or this Agreement is terminated pursuant to Section 9
hereof, the Company agrees to pay the following costs and expenses and all other
costs and expenses incident to the performance by it of its obligations
hereunder: (i) the preparation, printing or reproduction of the Offering
Memorandum (including financial statements thereto), this Agreement, the
Registration Rights Agreement and the Indenture, (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Offering Memorandum as may be
reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing (or reproduction), authentication,
issuance and delivery of certificates for the Securities including any stamp
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
-22-
<PAGE>
and delivered in connection with the offering of the Securities; (v) the fees
payable in connection with the application for quotation of the Securities on
PORTAL; (vi) the qualification of the Securities, if applicable, for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 4(f) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (vii) the performance by the Company of its
obligations under the Registration Rights Agreement, and (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company. The Company hereby
agrees that it will pay in full on the Closing Date the fees and expenses
referred to in clause (vi) of this Section 8 by delivering to counsel for the
Initial Purchasers on such date a check payable to such counsel in the requisite
amount.
(b) If the purchase and sale of the Securities hereunder is not
consummated because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder other than by reason of a default by the
Initial Purchasers hereunder or in payment for the Securities on the Closing
Date, the Company shall reimburse the Initial Purchasers promptly upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities
and the other transactions contemplated hereby.
9. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company, by notice to the
Company, if prior to the Closing Date (a) there shall occur any default or
breach by the Company hereunder or the failure to satisfy any of the conditions
contained in Sections 4 or 7 hereof, (b) if there has been, since the date of
this Agreement or since the respective dates as of which information is provided
in the Offering Memorandum and prior to the Closing Date, any material adverse
change or any downgrading of any of the Company's securities or the placement of
any such securities on a so-called "credit watch" or similar list by any major
credit rating agency, or (c) if, since the date of this Agreement and prior to
the Closing Date, (i) there has occurred any material adverse change in the
financial markets of the United States or any outbreak of hostilities or other
calamity or crisis, the effect of which on the financial securities markets of
the United States is such as to make it, in the reasonable good faith judgment
of the Initial Purchasers, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (ii) trading in any of the
securities of the Company has been suspended by the Commission or by the primary
exchange where such securities are traded, (iii) trading generally on the New
York Stock Exchange or the American Stock Exchange has been suspended (other
than by limitation on hours or number of days of trading), or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by the New York Stock Exchange, the American Stock Exchange
or by order of the Commission or any other governmental authority or (iv) a
banking moratorium has been declared by any of the federal, Texas or New York
authorities.
If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in
Section 8.
-23-
<PAGE>
10. Notices. 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 directed to Jefferies & Company, Inc., 11100 Santa Monica Boulevard, Los
Angeles, California 90025, attention of Syndicate Department, with a copy to
Vinson & Elkins L. L.P., 2300 First City Tower, 1001 Fannin, Houston, Texas
77002, Attention: Michael P. Finch, Esq.; notices to the Company shall be
directed to Coinmach Corporation, 55 Lumber Road, Roslyn, New York 11576,
Attention: Robert M. Doyle, Senior Vice President, Treasurer and Secretary of
the Company, with a copy to Anderson, Kill & Olick, P.C., 1251 Avenue of the
Americas, New York, New York 10020-1182, Attention: Ronald S. Brody, Esq.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company and their respective successors, and
legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to provide any person, firm or corporation, other
than the Initial Purchasers, the Company and its respective successors and legal
representatives and the controlling persons and officers, employees, directors
and shareholders referred to in Section 6 and their respective heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Initial Purchasers, the Company and their
respective successors and legal representatives, and said controlling persons,
shareholders, officers and directors and their respective heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Initial Purchasers shall be deemed to be a
successor by reason merely of such purchase.
12. Governing Law and Time. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State without giving effect to any
provisions thereof relating to conflicts of law. Specified times of day refer to
New York time, unless otherwise specified.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchasers and the Company in accordance with its terms.
-24-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
Coinmach Corporation
By: /s/ Robert M. Doyle
-------------------------------
Name: Robert M. Doyle
-----------------------------
Title: Senior Vice President
----------------------------
-25-
<PAGE>
Confirmed as of the date first
above mentioned.
JEFFERIES & COMPANY, INC.
By: /s/ R. Brent Stevens
-----------------------------------
Name: R. Brent Stevens
--------------------------------
Title: Managing Director
---------------------------------
LAZARD FRERES & CO. LLC
By: /s/ John V. Doyle
-----------------------------------
Name: John V. Doyle
--------------------------------
Title: Managing Director
---------------------------------
BT ALEX. BROWN INCORPORATED
By: /s/ Thomas Prior
----------------------------------
Name: Thomas Prior
--------------------------------
Title: Managing Director
---------------------------------
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Frederick W. Price
-----------------------------------
Name: Frederick W. Price
--------------------------------
Title: Managing Director
---------------------------------
-26-
<PAGE>
SCHEDULE I
Coinmach Corporation
--------------------
Initial Purchaser Notes
----------------- -----
Jefferies & Company, Inc. $ 60,000,000
Lazard Freres & Co. LLC $ 20,000,000
BT Alex. Brown Incorporated $ 10,000,000
First Union Capital Markets Corp. $ 10,000,000
------------
TOTAL $100,000,000
<PAGE>
EXHIBIT 10.2
$100,000,000
Coinmach Corporation
11 3/4% Series C Senior Notes due 2005
REGISTRATION RIGHTS AGREEMENT
-----------------------------
October 8, 1997
JEFFERIES & COMPANY, INC.
LAZARD FRERES & CO. LLC
BT ALEX. BROWN INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
c/o Jefferies & Company, Inc.
11100 Santa Monica Blvd., 10th Floor
Los Angeles, California 90025
Attention: Corporate Finance Department
Ladies and Gentlemen:
Coinmach Corporation, a Delaware corporation (the "Company",) proposes to
issue and sell to you (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement dated as of October 1, 1997 (the "Purchase Agreement"),
$100,000,000 principal amount of the Company's 11 3/4% Series C Senior Notes due
2005 (the "Notes"). The Notes will be issued pursuant to an indenture, to be
dated as of October 8, 1997 (the "Indenture") by and between the Company and
State Street Bank and Trust Company, as trustee (the "Trustee"), substantially
in the form previously furnished to you.
Capitalized terms used but not specifically defined herein are defined in
the Purchase Agreement and used herein as so defined. As used herein, (i)
"Registrable Notes" shall mean each Note, until the earliest to occur of (a) the
date on which a Registered Exchange Offer is completed for the Notes pursuant to
which such Note may be exchanged in the Registered Exchange Offer for an
Exchange Note (each as defined below) and entitled to be resold to the public by
the holder thereof without complying with the prospectus delivery requirements
of the Securities Act of 1933, as amended (the "Securities Act"), (b) the date
on which such Note has been effectively registered under the Securities Act and
disposed of pursuant to a Notes Shelf Registration (as defined below), (c) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Securities Act or by a Broker-Dealer (as defined below) pursuant to the
"Plan of Distribution" contemplated by the registration statement relating to
the Registered Exchange Offer (including delivery of the prospectus contained
therein) or (d) the date such Note ceases to be outstanding and (ii) "Series A/B
Notes" shall mean the Company's 11 3/4% Senior Notes due 2005 issued pursuant to
the Indenture dated as of November 30, 1995, as amended and supplemented,
between the Company and State Street Bank and Trust Company (formerly Shawmut
Bank Connecticut, National Association), as Trustee, providing for the issuance
of the Series A/B Notes in the aggregate principal amount of $196,655,000 as
such may be amended and supplemented from time to time.
Page 125 of 163
<PAGE>
In consideration of the premises, and the mutual covenants,
representations, warranties and agreements herein contained, the parties hereby
agree as follows:
1. Registered Exchange Offer.
(a) Promptly (and in any event not more than 60 days) following the
closing date of the sale of the Notes (the "Closing Date"), the Company shall
file with the Securities and Exchange Commission (the "Commission") a
registration statement on an appropriate form under the Securities Act with
respect to a proposed offer (the "Registered Exchange Offer") to the holders of
the Registrable Notes and the holders of the Series A/B Notes to issue and
deliver to such holders, in exchange for the Registrable Notes and Series A/B
Notes, a like principal amount of debt securities of the Company identical in
all material respects to the Registrable Notes (the "Exchange Notes") (except
that the Exchange Notes will not contain terms with respect to transfer
restrictions), shall use its best efforts to cause such registration statement
to become effective under the Securities Act no later than 120 days after the
Closing Date and, upon the effectiveness of that registration statement, shall
commence the Registered Exchange Offer and shall cause the same to remain open
for such period of time to be determined by the Company (but not less than 20
business days after the commencement of the Registered Exchange Offer), and to
be conducted in accordance with such procedures, as may be required by the
applicable provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), it being the objective of such Registered Exchange Offer to
enable each holder of Registrable Notes or Series A/B Notes electing to exchange
Registrable Notes or Series A/B Notes for Exchange Notes (assuming that such
holder is not an affiliate of the Company within the meaning of the Securities
Act, acquires the Exchange Notes in the ordinary course of such holder's
business and has no arrangements with any person to participate in the
distribution of the Exchange Notes) to trade such Registrable Notes or Series
A/B Notes for Exchange Notes without any limitations or restrictions under the
Securities Act, subject as to a Broker-Dealer to the provisions of Section 1(b)
hereof, or the Exchange Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States. Each holder of Registrable Notes or Series A/B Notes who participates
in the Exchange Offer and who desires to receive Exchange Notes that will not be
subject to any limitations or restrictions on resale under the Securities Act
will be required to represent in writing to the Company that any Exchange Notes
received by it will be acquired in the ordinary course of its business, that at
the time of the commencement of the Exchange Offer such holder of Registrable
Notes will have no arrangement or understanding with any person to participate
in the distribution of the Exchange Notes, and that such holder of the
Registrable Notes is not an affiliate of the Company within the meaning of the
Securities Act. If, because of any applicable interpretations of the
Commission's staff, the Company is not permitted to issue Exchange Notes to
holders of Series A/B Notes in the Registered Exchange Offer, the Company will
amend the registration statement relating to the Registered Exchange Offer such
that it relates only to the issuance of Exchange Notes in exchange for
Registrable Notes and the periods set forth above within which the Company shall
be obligated to cause the registration statement with respect to the Exchange
Offer to become effective and to consummate the Exchange Offer shall each be
extended by thirty (30) days.
<PAGE>
(b) The Company shall indicate in a "Plan of Distribution" section
contained in the final prospectus constituting a part of the registration
statement relating to the Registered Exchange Offer that any broker or dealer
registered under the Exchange Act (each a "Broker-Dealer") who holds Registrable
Notes or Series A/B Notes that were acquired for its own account as a result of
market-making activities or other trading activities (other than Registrable
Notes acquired directly from the Company), may exchange such Registrable Notes
or Series A/B Notes for Exchange Notes pursuant to the Registered Exchange
Offer; however, such Broker-Dealer may be deemed an "underwriter" within the
meaning of the Securities Act and, therefore, must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of the
Exchange Notes received by it in the Registered Exchange Offer, which prospectus
delivery requirement may be satisfied by the delivery by such Broker-Dealer of
the final prospectus contained in the registration statement relating to the
Registered Exchange Offer. Such "Plan of Distribution" section also shall state
that the delivery by a Broker-Dealer of the final prospectus relating to the
Registered Exchange Offer in connection with resales of Exchange Notes shall not
be deemed to be an admission by such Broker-Dealer that it is an "underwriter"
within the meaning of the Securities Act, and shall contain all other
information with respect to resales of the Exchange Notes by Broker-Dealers that
the Commission may require in connection therewith, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Exchange Notes held by any such Broker-Dealer except to the extent required by
the Commission as a result of a change in policy after the date of this
Agreement.
(c) In connection with such Registered Exchange Offer and the offer
and sale of Exchange Notes by Broker-Dealers as contemplated above, the Company
shall take such other and further action, including making appropriate filings
under state securities laws and delivering such number of final prospectuses
relating to the Registered Exchange Offer as any Broker-Dealer proposing to
deliver the same in connection with its resales of Exchange Notes may reasonably
request, as may be necessary to realize the foregoing objectives. The Company
shall cause the registration statement relating to the Registered Exchange Offer
to remain continuously effective for a period of one year from the date on which
such registration statement is first declared effective, and shall supplement or
amend the prospectus contained therein, in each case, to the extent necessary to
permit such prospectus (as supplemented or amended) to be delivered by Broker-
Dealers in connection with their resales of Exchange Notes as aforesaid.
2. Notes Shelf Registration. The following provisions shall apply, only
if, because of any change in currently prevailing interpretations of the
Commission's staff, the Company is not permitted to effect a Registered Exchange
Offer with respect to Registrable Notes, as contemplated by Section 1 hereof or
if for any other reason the Registered Exchange Offer with respect to
Registrable Notes is not consummated within 180 days after the Closing Date, or
if the Initial Purchaser shall so request:
(a) As promptly as practicable (and in any event not more than 60
days) after such request, the Company shall file with the Commission, and
thereafter use its best efforts to have declared effective not later than 60
days after its initial filing, a registration statement (the "Shelf Registration
Statement") on an appropriate form under the Securities Act relating to the
offer and sale of the Registrable Notes by the holders thereof, from time to
time in accordance with the methods of distribution set forth in such
registration statement and Rule 415 under the Securities Act (the "Notes Shelf
Registration").
<PAGE>
(b) The Company agrees to use its good faith efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
included therein to be usable by the holders of the Registrable Notes until the
earlier of two years after the effective date thereof or such shorter period
that will terminate when all the Registrable Notes covered by the Shelf
Registration Statement have been sold pursuant to such registration statement;
provided, that the Company shall be deemed not to have used its good faith
efforts to keep the Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in holders of the
Registrable Notes covered thereby not being able to offer and sell such
Registrable Notes during that period, unless such action is required by
applicable law, and provided, further, that the foregoing shall not apply if the
Company determines, in its reasonable judgment, upon advice of counsel, as
authorized by a resolution of its Board of Directors, that the continued
effectiveness and usability of the Shelf Registration Statement would (i)
require the disclosure of material information, which the Company has a bona
fide business reason for preserving as confidential, or (ii) interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company or any of its Affiliates (as defined in the rules and
regulations adopted under the Exchange Act); provided, however, that the failure
to keep the Shelf Registration Statement effective and usable for offers and
sales of Registrable Notes for such reasons shall last no longer than 90 days in
any 12-month period (whereafter Notes Liquidated Damages (as defined in Section
6) shall accrue and be payable), so long as the Company promptly thereafter
complies with the requirements of Section 3(h) hereof, if applicable. Any such
period during which the Company fails to keep the Shelf Registration Statement
effective and usable for offers and sales of Registrable Notes is referred to as
a "Suspension Period." A Suspension Period shall commence on and include the
date that the Company gives notice that the Shelf Registration Statement is no
longer effective or the prospectus included therein is no longer usable for
offers and sales of Registrable Notes and shall end on the date when each seller
of Registrable Notes covered by such registration statement either receives the
copies of the supplemented or amended prospectus contemplated by Section 3(h)
hereof or is advised in writing by the Company that use of the prospectus may be
resumed.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company will cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date of such registration statement, amendment or supplement, (i) to comply in
all material respects with the applicable requirements of the Securities Act and
the rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided, however, that the Company shall not be responsible for any information
provided to it by sellers of Registrable Notes to be included in the Shelf
Registration Statement.
3. Registration Procedures. In connection with, to the extent
applicable, any Registered Exchange Offer pursuant to Section 1 hereof, or any
Notes Shelf Registration pursuant to Section 2 hereof, the following provisions
shall apply:
(a) If requested by (i) any holder of Registrable Notes or Series A/B
Notes with respect to a Registered Exchange Offer, or (ii) any holder of
Registered Notes or the managing underwriter, if any, with respect to the Notes
Shelf Registration, the Company shall furnish to each such holder of Series A/B
Notes, Registrable Notes or such managing underwriter, prior to the filing
thereof with the Commission, a copy of the applicable registration statement and
each amendment
<PAGE>
thereof and each supplement, if any, to the prospectus included therein. The
Company shall use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as such holder or managing underwriter
reasonably may propose.
(b) The Company shall advise the holders of Series A/B Notes,
Registrable Notes or the Exchange Notes, and the managing underwriter, if any,
and, if requested by any such person, confirm such advice in writing:
(i) when the applicable registration statement and any amendment
thereto has been filed with the Commission and when the registration
statement or any post-effective amendment thereto has become effective;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the applicable registration statement 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 of the Series A/B Notes,
Registrable Notes or the Exchange Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
(iv) of the happening of any event that requires the making of
any changes in the registration statement or the prospectus in order to
make the statements therein not misleading (which advice shall be
accompanied by an instruction to suspend the use of the prospectus until
the requisite changes have been made).
(c) The Company will make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement at the earliest possible time.
(d) The Company will furnish to each holder of the Series A/B Notes,
Registrable Notes or the Exchange Notes included within the coverage of the
Registered Exchange Offer or the Notes Shelf Registration, as appropriate,
without charge, at least one copy of the applicable registration statement in
the form in which it was declared effective by the Commission and any post-
effective amendment thereto, including financial statements and schedules, and,
if the holder so requests in writing, any or all exhibits (including those
incorporated therein by reference).
(e) The Company will deliver to each holder of the Series A/B Notes,
Registrable Notes or the Exchange Notes included within the coverage of the
Registered Exchange Offer or the Notes Shelf Registration, as appropriate,
without charge, as many copies of the prospectus (including each preliminary
prospectus) included in the applicable registration statement and any amendment
or supplement thereto as such persons may reasonably request; the Company
consents to the use of the prospectus included in the applicable registration
statement or any amendment or supplement thereto by each of the selling holders
of the Registrable Notes or the Exchange Notes in connection with the offering
and sale of the Registrable Notes or the Exchange Notes covered by the
prospectus or any amendment or supplement thereto.
<PAGE>
(f) Prior to any public offering of the Registrable Notes or the
Exchange Notes pursuant to the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be, the Company will use its good faith efforts to
register or qualify, or cooperate with the holders of the Registrable Notes or
the Exchange Notes covered thereby and their respective counsel in connection
with the registration or qualification of, such Registrable Notes or Exchange
Notes for offer and sale under the securities or blue sky laws of such
jurisdictions as any seller reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in such
jurisdictions, of the Registrable Notes or the Exchange Notes covered by the
Registered Exchange Offer or the Notes Shelf Registration, as the case may be;
provided, that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(g) The Company will cooperate with the holders of the Registrable
Notes and the Exchange Notes to facilitate the timely preparation and delivery
of certificates representing the Registrable Notes and the Exchange Notes to be
sold in the Registered Exchange Offer or the Notes Shelf Registration, as the
case may be, free of any restrictive legends and in such denominations and
registered in such names as the holders may request provided such request
complies with the Indenture, prior to sales of the Registrable Notes or the
Exchange Notes, pursuant to the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be.
(h) Upon the occurrence of any event contemplated by paragraph (b)(iv)
above, the Company will prepare a post-effective amendment to the registration
statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Series A/B Notes,
Registrable Notes or the Exchange Notes, as applicable, the prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, provided, however,
that the Company shall not be responsible for any information provided to it by
sellers of Registrable Notes or Exchange Notes included in such registration
statement or prospectus supplement or any information provided to it by any of
the Initial Purchasers with respect to the use of the word "SUPERtack" or the
inclusion of such information in such registration statement or prospectus
supplement.
(i) Not later than the effective date of an applicable registration
statement, the Company will provide a CUSIP number to be assigned to the
Registrable Notes after their transfer pursuant to the shelf Registration
Statement and/or the Exchange Notes, as the case may be, and provide the Trustee
with printed certificates for the Registrable Notes or the Exchange Notes, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(j) The Company will use its best efforts to comply with all
applicable rules and regulations of the Commission and will make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after
the end of the 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of each of the Registered Exchange Offer and the Notes
Shelf Registration, which statements shall cover such 12-month period.
<PAGE>
(k) The Company will cause the Indenture to be qualified under the
Trust Indenture Act of 1939 upon effectiveness of the registration statement
contemplated by Section 1(a) or Section 2(a).
(l) The Company may require each holder of Registrable Notes to be
sold pursuant to the Notes Shelf Registration, to furnish to the Company such
information regarding the holder and the distribution of such Registrable Notes
as the Company may from time to time reasonably require for inclusion in the
registration statement. The Company may exclude from such registration the
Registrable Notes of any holder who unreasonably fails to furnish such
information in writing to the Company within ten business days (or longer time
period if agreed by the Company in writing) after receiving such request. Each
holder of Registrable Notes included within the coverage of any Registration
Statement shall furnish promptly to the Company all information required by
applicable law to be disclosed by such party in order to make the information
previously furnished to the Company not materially misleading.
(m) Each holder of Registrable Notes agrees by acquisition of such
Registrable Notes or Exchange Notes to be sold that, upon receipt of any notice
from the Company of the happening of any Suspension Period of the kind described
in Section 2(b), such holder will forthwith discontinue disposition of such
Registrable Notes or Exchange Notes covered by such registration statement or
prospectus until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(h) hereof or is advised in writing
by the Company that use of the prospectus may be resumed.
4. Registration Expenses. The Company will bear all expenses incurred in
connection with the performance of its obligations under Sections 1 through 3
hereof and will bear or reimburse the holders of the Registrable Notes for the
reasonable fees and disbursements of one firm of counsel designated by the
holders of a majority in principal amount of the Registrable Notes to act as
counsel for the holders of the Registrable Notes in connection therewith;
provided that in any underwritten offering the Company shall not be obligated to
- --------
pay any underwriters' discounts and commissions nor any transfer tax related to
such offering.
5. Indemnification.
(a) Indemnification by Company. The Company shall indemnify and hold
harmless the Initial Purchasers, in the case of the Notes Shelf Registration,
each holder of Registrable Notes, and in the case of the Registered Exchange
Offer, each Broker-Dealer who holds Exchange Notes acquired for its own account
pursuant to the Registered Exchange Offer, and, in any such case, the Initial
Purchasers' and such holder's officers, directors, employees and agents and each
person who controls an Initial Purchaser, now or hereafter, and each such holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (each such person being sometimes hereinafter referred to as an
"Indemnified Person") from and against any and all losses, claims, damages,
liabilities and judgments (collectively, "Losses") arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any registration statement or prospectus or in any amendment or supplement
thereto relating to the Notes Shelf Registration or the Registered Exchange
Offer, as the case may be, 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
<PAGE>
as such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or allegation thereof based upon information
relating to such Indemnified Person furnished in writing to the Company by such
Indemnified Person expressly for use therein and used in conformity therewith;
provided, however, that in the event the Initial Purchasers or a Broker-Dealer
are required by law to deliver a final prospectus in connection with a
Registered Exchange Offer or a Note Shelf Registration and the indemnity
obligations arising under this Section 5(a) arise with respect to untrue
statements or omissions or untrue alleged statements or omissions made in a
preliminary prospectus, such indemnity obligations arising under this Section
5(a) shall not inure to the benefit of the Initial Purchasers or any Broker-
Dealer and its controlling persons and their respective directors, officers and
employees if the person asserting any such Losses purchased the Notes from the
Initial Purchasers or such Broker-Dealer and if a copy of the final prospectus
(as then amended or supplemented if the Company shall have timely furnished any
amendments thereof or supplements thereto), was not sent or given by the Initial
Purchasers or such Broker-Dealer or on its behalf to such person at or prior to
the time such delivery was required by law, and if the final prospectus (as then
amended or supplemented if the Company shall have timely furnished any
amendments thereof or supplements thereto) would have cured the defect giving
rise to such Losses. The indemnity will be in addition to any liability which
the Company may otherwise have.
If any action or proceeding (including any governmental investigation
or inquiry) shall be brought or asserted against an Indemnified Person, or
notice of any such claim is received, in respect of which indemnity may be
sought from the Company, such Indemnified Person shall promptly notify the
Company in writing, and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
the payment of all reasonable fees and expenses of such defense; provided that
the failure by any such Indemnified Person to so notify the Company shall not
relieve the Company of its indemnification obligations under Section 5(a)
hereof, except to the extent that the Company is materially prejudiced or
forfeits substantive rights and defenses by reason of such failure. Such
Indemnified Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be the expense of such Indemnified Person unless
(A) the Company has agreed in writing to pay such fees and expenses or (B) the
Company shall have failed to assume the defense of such action or proceeding and
to employ counsel reasonably satisfactory to such Indemnified Person in any such
action or proceeding within a reasonable time after notice of commencement of
such action or proceeding or (C) the named parties to any such action or
proceeding (including any impleaded parties) include such Indemnified Person and
the Company, and such Indemnified Person shall have been advised in writing by
counsel that there may be one or more legal defenses available to such
Indemnified Person that are different from or additional to those available to
the Company and in the reasonable judgment of such counsel it is advisable for
such Indemnified Party to employ separate counsel (in which case, if such
Indemnified Person notifies the Company in writing that it elects to employ
separate counsel at the expense of the Company, the Company shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Person) it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for such Indemnified Person and any other Indemnified
Persons, which firm shall be designated in writing by such Indemnified Persons
(which shall be reasonably satisfactory to the Company), and that all such fees
and expenses shall be
<PAGE>
reimbursed as they are billed). The Company shall not be liable for any
settlement of any such action or proceeding effected without their written
consent (which consent shall not be unreasonably withheld), but if settled with
their written consent, or if there be a final, unappealable judgment for the
plaintiff in any such action or proceeding, the Company agrees to indemnify and
hold harmless such Indemnified Persons from and against any loss or liability by
reason of such settlement or judgment. The Company shall not, without the prior
written consent of the Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is a party and indemnity
has been sought hereunder by such Indemnified Person; provided however, that the
Company may effect such a settlement without the consent of such Indemnified
Person if such settlement includes an unconditional release of such Indemnified
Person from all liability for claims that are the subject matter of such
proceeding or the Company indemnifies such Indemnified Person in writing and
posts a bond for an amount equal to the maximum liability for all such claims as
contemplated above or provides other security for such indemnity as shall be
reasonably satisfactory to such Indemnified Person.
(b) Indemnification by Holders. Each holder of Registrable Notes
agrees to indemnify and hold harmless the Company, its directors and officers,
employees and agents and each person, if any, controlling the Company within the
meaning of either 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 such
holder, but only with respect to information relating to such holder or the
distribution furnished in writing by such holder expressly for use in any
registration statement or prospectus or any amendment or supplement thereto or
any preliminary prospectus relating thereto, provided, however, that no such
holder shall be liable for any indemnity claims hereunder in excess of the
amount of net proceeds received by such holder from the sale of Registrable
Notes pursuant to the Notes Shelf Registration. If any action or proceeding
shall be brought against the Company or its directors, officers, employees or
agents or any such controlling person, in respect of which indemnity may be
sought against a holder of Registrable Notes, such holder shall have the rights
and duties given the Company and the Company or their directors, officers,
employees or agents or such controlling person shall have the rights and duties
given to each holder by Section 5(a) hereof. The Company shall be entitled to
receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above with respect to information so furnished in
writing by such persons specifically for inclusion in any prospectus or
registration statement or any amendment or supplement thereto.
(c) Contribution. If the indemnification provided for in this
Section 5 is unavailable to an indemnified party under Section 5(a) or Section
5(b) hereof (other than by reason of exceptions provided in those Sections) in
respect of any Losses referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Losses in
such proportion as is appropriate to reflect not only the relative benefits but
also the relative fault of the Company on the one hand and of the Indemnified
Person on the other in connection with the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and of the Indemnified Person
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 Indemnified Person and the parties' relative intent,
knowledge,
<PAGE>
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the Losses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 5(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and the holders of the Registrable Notes and Exchange
Notes agree that it would not be just and equitable if contribution pursuant to
this Section 5(c) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6. Additional Interest Under Certain Circumstances; Remedies.
(a) Additional interest (the "Additional Interest") shall become
payable as liquidated damages with respect to the Registrable Notes in the event
of the occurrence of any of the following events (each a "Registration Default")
as follows:
(i) if the Exchange Offer Registration Statement or Shelf
Registration Statement is not filed within 60 days following the Closing
Date, Additional Interest shall accrue on the Registrable Notes over and
above the stated interest at a rate of 0.50% per annum for the first 90
days commencing on the 61st day after the Closing Date, such Additional
Interest rate increasing by an additional 0.50% per annum at the beginning
of each subsequent 90-day period;
(ii) if the Exchange Offer Registration Statement or Shelf
Registration Statement is not declared effective within 120 days following
the Closing Date (or within 150 days following the Closing Date in the
event that the Company is required by the Commission to amend the Exchange
Offer such that it relates only to the issuance of Exchange Notes in
exchange for Registrable Notes), Additional Interest shall accrue on the
Registrable Notes over and above the stated interest at a rate of 0.50% per
annum for the first 90 days commencing on the 121st day after the Closing
Date (or on the 151st day after the Closing Date, as applicable), such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 90-day period; or
(iii) if (A) the Company has not exchanged all Registrable
Notes and Series A/B Notes validly tendered in accordance with the terms of the
Registered Exchange Offer on or prior to 165 days after the Closing Date (or on
or prior to 195 days after the Closing Date in the event that the Company is
required by the Commission to amend the Exchange Offer as provided above) or (B)
the registration statement relating to the Registered Exchange Offer (the
"Exchange Offer Registration Statement") ceases to be effective at any time
prior to the time that the Registered 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 without being succeeded
promptly (but in no event more than five business days) by another effective
Shelf Registration Statement at any time prior to the second anniversary of the
Closing Date (unless all the Registrable Notes have been sold thereunder), then
Additional Interest shall accrue on the
<PAGE>
Registrable Notes over and above the stated interest at a rate of 0.50% per
annum for the first 90 days commencing on (x) the 166th day after the Closing
Date (or on the 196th day after the Closing Date, as applicable), with respect
to the Registrable Notes validly tendered and not exchanged by the Company, in
the case of (A) above, or (y) the day the Exchange Offer Registration Statement
ceases to be effective or usable for its intended purpose 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 0.50% per annum at the beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Registrable Notes
may not exceed in the aggregate 1.0% per annum; and provided, further, that (i)
upon the filing of the registration statement relating to the Registered
Exchange Offer or Shelf Registration Statement (in the case of clause (i)
above), (ii) upon the effectiveness of the Exchange Offer Registration Statement
or Shelf Registration Statement (in the case of (ii) above), or upon the
exchange of Exchange Notes for all Registrable Notes and Series A/B Notes
tendered (in the case of clause (iii)(A) above), or upon the effectiveness of
the Exchange Offer Registration Statement which had ceased to remain effective
in the case of clause (iii)(B) above, or upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective (in the case of
clause (iii)(C) above), Additional Interest on the Registrable Notes as a result
of such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue.
(b) Any amounts of Additional Interest due pursuant to Section
6(a)(i), (ii), or (iii) above will be payable in cash, on the same original
interest payment dates as the Registrable Notes. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the Registrable Notes 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 the denominator of which is 360.
(c) The Company shall notify the Trustee within one business day after
(i) each and every Registration Default and (ii) the date the Registration
Default has been so cured. Until the Trustee and the Paying Agent have received
an Officers' Certificate from the Company to the effect that all Additional
Interest then due has been paid in full, the Company (in respect of any payment
date) shall pay Additional Interest then due by depositing with the Trustee, in
trust, for the benefit of the affected holders of Registrable Notes, on or
before the applicable semi-annual interest payment date, immediately available
funds in sums sufficient to pay the liquidated damages then due and provide to
the Trustee and the Paying Agent a list of holders entitled to Additional
Interest together with the amount of cash such holder is due.
7. Miscellaneous.
(a) 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 holders of a majority in aggregate principal amount of the
Registrable Notes (insofar as such matters relate to the Registrable Notes) or
the Exchange Notes (insofar as such matters relate to the Exchange Notes).
<PAGE>
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a holder of Registrable Notes or Exchange Notes, at the
most current address given by such holder to the Company in accordance with
the provisions of this Section 7(b), which address initially is, with
respect to each holder, the address of such holder to which confirmation of
the sale of the Notes was first sent by the Initial Purchasers, with a copy
in like manner to Jefferies & Company, Inc., 11100 Santa Monica Blvd., 10th
Floor, Los Angeles, California 90025, Attention: Corporate Finance
Department;
(ii) if to the Initial Purchasers, to the address set forth in
clause (b)(i) above; and
(iii) if to the Company, initially at its address set forth in
the Purchase Agreement.
All such notices and communications 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
answered back, if telexed; when receipt acknowledged by recipient's telecopy
operator, if telecopied; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) 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 the Series A/B Notes or Registrable Notes.
(d) Counterparts. This Agreement may be executed in any number of
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.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
principles of conflicts of laws to the extent the application of the law of
another jurisdiction would be required thereby.
(g) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
<PAGE>
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above:
Very truly yours,
COINMACH CORPORATION
By: /s/ Robert M. Doyle
-------------------
Name: Robert M. Doyle
---------------
Title: Senior Vice President
----------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
Accepted and agreed to as of
the first date written above:
JEFFERIES & COMPANY, INC.
By: /s/ Andrew Whittaker
--------------------
Name: Andrew Whittaker
------------------
Title: Executive Vice President
------------------------
LAZARD FRERES & CO. LLC
By: /s/ John V. Doyle
--------------------
Name: John V. Doyle
------------------
Title: Managing Director
-----------------
BT ALEX. BROWN INCORPORATED
By: /s/ Thomas Prior
--------------------
Name: Thomas Prior
------------------
Title: Managing Director
-----------------
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ John J. Braden
--------------------
Name: John J. Braden
------------------
Title: Managing Director
-----------------
<PAGE>
EXHIBIT 10.3
______________________________________________________________________________
SECOND SUPPLEMENTAL INDENTURE
Dated as of October 8, 1997
(Supplemental to Indenture dated as of November 30, 1995)
______________________________________________________________________________
COINMACH CORPORATION, as Issuer
TO
STATE STREET BANK AND TRUST COMPANY,
(successor in interest to Shawmut Bank Connecticut,
National Association), as Trustee
______________________________________________________________________________
11 3/4% SENIOR NOTES DUE 2005
and
SERIES B 11 3/4% SENIOR NOTES DUE 2005
______________________________________________________________________________
Page 139 of 163
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of the 8th day of October,
1997 made by and between COINMACH CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), and STATE
STREET BANK AND TRUST COMPANY (successor in interest to Shawmut Bank
Connecticut, National Association), as Trustee (the "Trustee").
WHEREAS, the Company executed and delivered to the Trustee an
Indenture, dated as of November 30, 1995, as supplemented by a First
Supplemental Indenture thereto dated as of December 11, 1995 (collectively, the
"Original Indenture") providing for the issuance of its 11 3/4% Senior Notes due
2005 (the "Initial Notes") and its Series B 11 3/4% Senior Notes due 2005 (the
"Exchange Notes", and together with the Initial Notes, the "Notes"); and
WHEREAS, Section 9.02 of the Original Indenture provides, among other
things, that the Company, when authorized by a resolution of its Board of
Directors and the Trustee, may amend or supplement the Original Indenture
provided that such amendment or supplement has been approved by the Holder or
Holders (as defined in the Original Indenture) of at least a majority in
aggregate principal amount of the outstanding Notes in accordance with Section
9.02 of the Original Indenture; and
WHEREAS, Section 9.06 of the Original Indenture provides that the
Trustee shall execute any amendment, supplement or waiver to the Original
Indenture authorized pursuant to Article Nine of the Original Indenture; and
WHEREAS, all requirements of law and of the certificate of
incorporation and by-laws of the Company, including all requisite action on the
part of its directors and officers relating to the execution of this Second
Supplemental Indenture have been complied with and observed, all approvals of
Holders of Notes issued and outstanding under the Original Indenture required
pursuant to Section 9.02 of the Original Indenture in connection with this
Second Supplemental Indenture have been obtained and all things necessary to
make this Second Supplemental Indenture a valid and legally binding instrument
in accordance with its terms have happened, been done and been performed;
NOW THEREFORE, the Company and the Trustee hereby agree as follows:
ARTICLE 1.
MISCELLANEOUS
1. Section 4.12 of the Original Indenture is hereby amended in its
entirety to read as follows:
"The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur")
- 2 -
<PAGE>
any Indebtedness (other than Permitted Indebtedness);
provided, however, that (i) during the period of time
-------- -------
commencing on the date of the Second Supplemental Indenture
through and including the date which is the second
anniversary thereof (the "Special Window Period"), if no
Default or Event of Default shall have occurred and be
continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company and its
Restricted Subsidiaries may incur Indebtedness (including,
without limitation, Acquired Indebtedness) if on the date of
the incurrence of such Indebtedness, after giving effect to
the incurrence thereof, the Consolidated Fixed Charge
Coverage Ratio of the Company is greater than 2.10 to 1.00
and (ii) during any period of time other than the Special
Window Period if no Default or Event of Default shall have
occurred and be continuing at the time of or as a
consequence of the occurrence of any such Indebtedness, the
Company and its Restricted Subsidiaries may incur
Indebtedness (including, without limitation, Acquired
Indebtedness) if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company
is greater than 2.25 to 1.00."
2. All provisions of this Second Supplemental Indenture shall be
deemed to be incorporated in, and made a part of, the Original Indenture; and
the Original Indenture, as supplemented by this Second Supplemental Indenture,
shall be read, taken and construed as one and the same instrument.
3. The Trustee accepts the trusts created by the Original Indenture,
as supplemented by this Second Supplemental Indenture, and agrees to perform the
same upon the terms and conditions in the Original Indenture, as supplemented by
this Second Supplemental Indenture. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Second Supplemental Indenture, except for the Trustee's certificate of
authentication, or the due execution hereof by the Company, or for or in respect
of the recitals contained herein, all of which recitals are made by the Company
solely.
4. All capitalized terms used and not defined herein shall have the
respective meanings assigned to them in the Original Indenture.
5. This Second Supplemental Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
- 3 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, as of the date first above written.
COINMACH CORPORATION
/s/ Robert M. Doyle
By: ___________________________________
Name: Robert M. Doyle
Title: SVP
STATE STREET BANK AND TRUST COMPANY,
as Trustee
/s/ Philip G. Kane, Jr.
By: ___________________________________
Name: PHILIP G. KANE, JR.
Title: VICE PRESIDENT
<PAGE>
EXHIBIT 10.4
AMENDMENT NUMBER TWO AND WAIVER, dated as of October 7, 1997 ("Amendment
and Waiver"), to the Credit Agreement dated as of January 8, 1997 as amended by
Amendment No. 1 dated as of June 2, 1997 (the "Credit Agreement"), among
COINMACH CORPORATION, a Delaware corporation (the "Borrower"), COINMACH LAUNDRY
CORPORATION, a Delaware corporation ("Holdings"), the lending institutions from
time to time party thereto (each a "Bank" and collectively, the "Banks"),
BANKERS TRUST COMPANY, as Administrative Agent, FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Syndication Agent and LEHMAN COMMERCIAL PAPER, INC., as
Documentation Agent (the "Agents"). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.
WHEREAS, the Borrower intends to incur Indebtedness through the issuance of
the 11 3/4% New Notes (as defined in Section 2 hereof); and
WHEREAS, the Borrower intends to apply more than 50% of the cash proceeds
from the issuance of the 11 3/4% New Notes as a mandatory repayment of
outstanding Term Loans in accordance with the requirements of Section 4.02 (f);
and
WHEREAS, the Borrower intends to repay the outstanding principal amount of
the Tranche A Term Loan in its entirety with the cash proceeds received from the
issuance of the 11 3/4% New Notes and thereafter apply the residual amount of
such cash proceeds on a pro rata basis to the Initial Tranche B Term Loans and
Additional Tranche B Term Loans in accordance with the requirements of Sections
4.02 (j) and (k); and
WHEREAS, in connection with the issuance of the 11 3/4% New Notes, the
Borrower intends to amend the indenture under which the 11 3/4% Notes were
issued in the manner described in the Borrower's Consent Solicitation Statement
dated October 1, 1997, a copy of which has been provided to the Agents; and
WHEREAS, in connection with the foregoing the Borrower has requested that
the Agents and the Banks amend and waive certain provisions of the Credit
Agreement; and
WHEREAS, the Agents and the Banks have considered and agreed to the
Borrower's requests, upon the terms and conditions set forth in this Amendment
and Waiver; and
Page 143 of 163
<PAGE>
-2-
WHEREAS, the consent of the Supermajority Banks is necessary to effect this
Amendment and Waiver;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION ONE - WAIVER.
----------- ------
The Banks hereby consent to and agree to waive compliance by Holdings and
the Borrower with any provision of the Credit Agreement which might otherwise
prohibit the issuance of the 11 3/4% New Notes, the amending of the Indenture
under which the 11 3/4% Notes were issued, and the application of cash proceeds
first to the Tranche A Term Loans and then pro rata to the Tranche B Term Loans,
including without limitation, Sections 4.02, 9.04 and 9.11 of the Credit
Agreement.
SECTION TWO - AMENDMENT TO CREDIT AGREEMENT.
----------- -----------------------------
The Credit Agreement is amended as hereinafter provided in this Section
One, effective as of October 7, 1997 (the "Amendment and Waiver Effective
Date").
2.1. Amendment to Section 11 of the Credit Agreement
-----------------------------------------------
Section 11.01 shall be amended by adding the following new
definition, in the appropriate alphabetical order.
"11 3/4% New Notes' shall mean the 11 3/4% Notes due 2005 issued
pursuant to an indenture dated as of October 8, 1997 between the Borrower and
State Street Bank and Trust Company, as Trustee."
SECTION THREE - REPRESENTATIONS AND WARRANTIES.
------------- ------------------------------
Holdings and the Borrower each hereby confirms, reaffirms and
restates the representations and warranties made by it in Section 7 of the
Credit Agreement and all such representations and warranties are true and
correct in all material respects as of the date hereof (it being understood
and agreed that any representation or warranty which by its terms is made as
of a specified date shall be required to be true and correct only as of such
specified date), except such representations and warranties need not be true
and correct to the extent that changes in the facts and conditions on which
<PAGE>
-3-
such representations and warranties are based are required or permitted under
the Credit Agreement or such changes arise out of events not prohibited by the
covenants set forth in Sections 8 and 9 of the Credit Agreement or otherwise
permitted by consents or waivers. Holdings and the Borrower each hereby
further represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) to the Agents and each Bank that:
(a) Holdings and the Borrower each has the corporate power and
authority to execute, deliver and perform this Amendment and Waiver and has
taken all corporate actions necessary to authorize the execution, delivery and
performance of this Amendment and Waiver;
(b) No consent of any person other than all of the Banks and the
Agents parties hereto, and no consent, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration
with, any governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability against the Borrower or
Holdings of this Amendment and Waiver;
(c) This Amendment and Waiver has been duly executed and delivered
on behalf of each of Holdings and the Borrower by a duly authorized officer or
attorney-in-fact of Holdings and the Borrower, as the case may be, and
constitutes a legal, valid and binding obligation of each of Holdings and the
Borrower, as the case may be, enforceable against each of Holdings and the
Borrower in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, fraudulent conveyance, preferential
transfer, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies generally, (b)
general principles of equity (whether such enforceability is considered in a
proceeding in equity or at law), and by the discretion of the court before
which any proceeding therefor may be brought, or (c) public policy
considerations or court administrative, regulatory or other governmental
decisions that may limit rights to indemnification or contribution or limit or
affect any covenants or agreements relating to competition or future
employment; and
(d) The execution, delivery and performance of this Amendment and
Waiver will not violate (i) any provision of law applicable to Holdings or the
Borrower or (ii) any contractual obligation of either Holdings or the
Borrower,
<PAGE>
-4-
other than such violations that would not reasonably be expected to result in,
singly or in the aggregate, a Material Adverse Effect.
SECTION FOUR - MISCELLANEOUS.
------------ -------------
(a) Except as herein expressly amended, the Credit Agreement and
all other agreements, documents, instruments and certificates executed in
connection therewith, except as otherwise provided herein, are ratified and
confirmed in all respects and shall remain in full force and effect in
accordance with their respective terms.
(b) This Amendment and Waiver may be executed by the parties hereto
in one or more counterparts, each of which shall be an original and all of which
shall constitute one and the same agreement.
(c) THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS.
(d) This Amendment and Waiver shall not constitute a consent or
waiver to or modification of any provision, term or condition of the Credit
Agreement, other than such terms, provisions, or conditions that are required to
consummate the transactions contemplated by this Amendment and Waiver. All
terms, provisions, covenants, representations, warranties, agreements and
conditions contained in the Credit Agreement, as amended hereby, shall remain in
full force and effect.
<PAGE>
-5-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
and Waiver to be duly executed as of the date first above written.
COINMACH LAUNDRY CORPORATION
By: /s/ Robert M. Doyle
------------------------
Name: Robert M. Doyle
----------------------
Title: Senior Vice President
----------------------
COINMACH CORPORATION
By: /s/ Robert M. Doyle
------------------------
Name: Robert M. Doyle
----------------------
Title: Senior Vice President
----------------------
<PAGE>
-6-
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By: /s/ Patricia Hogan
------------------
Name: Patricia Hogan
------------------
Title: Vice President
------------------
<PAGE>
-7-
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, Individually
and as Syndication Agent
By: /s/ Frederick W. Price
----------------------
Name: Frederick W. Price
--------------------
Title: Managing Director
-------------------
<PAGE>
-8-
LEHMAN COMMERCIAL PAPER INC.,
Individually and as
Documentation Agent
By: /s/ Dennis J. Dee
-----------------------
Name: Dennis J. Dee
---------------------
Title: Authorized Signatory
--------------------
<PAGE>
-9-
FLEET NATIONAL BANK,
as a Lender
By:__________________________
Name:
Title:
<PAGE>
-10-
BANKBOSTON, N.A. as a Lender
By:________________________
Name:
Title:
<PAGE>
-11-
BANK OF SCOTLAND, as a Lender
By: /s/ Annie ChinTat
----------------------
Name: Annie ChinTat
--------------------
Title: Vice President
-------------------
<PAGE>
-12-
CREDIT LYONNAIS NEW YORK BRANCH,
as a Lender
By:___________________________
Name:
Title:
<PAGE>
-13-
HELLER FINANCIAL, INC., as a Lender
By: /s/ Kathi J. Inorio
-------------------
Name: Kathi J. Inorio
-----------------
Title: Vice President
----------------
<PAGE>
-14-
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By: /s/ Michael D. Hatley
---------------------
Name: Michael D. Hatley
-------------------
Title: Vice President and
------------------
Portfolio Manager
------------------
<PAGE>
-15-
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Richard E. Spencer II
-----------------------------
Name: Richard E. Spencer II
-----------------------------
Title: Managing Director
-----------------------------
<PAGE>
-16-
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By:_____________________________
Name:
Title:
<PAGE>
-17-
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Howard Tiffen
----------------------------
Name: Howard Tiffen
----------------------------
Title: Senior Vice President
<PAGE>
-18-
PRIME INCOME TRUST,
as a Lender
By:__________________________
Name:
Title:
<PAGE>
-19-
SENIOR DEBT PORTFOLIO
By: Boston Management and
Research as Investment Advisor
By:____________________________
Name:
Title:
<PAGE>
EXHIBIT 99.1
CONTACT:
- -------
Mr. Robert M. Doyle, Senior Vice President and
Chief Financial Officer; (516) 484-2300
Coinmach Laundry Corporation
FOR IMMEDIATE RELEASE:
- ---------------------
COINMACH CORPORATION ANNOUNCES
PRIVATE PLACEMENT OF $100 MILLION SENIOR NOTES
NEW YORK, NEW YORK, OCTOBER 7, 1997 - Coinmach Corporation, a wholly-owned
subsidiary of Coinmach Laundry Corporation (NASDAQ: WDRY), announced a private
placement (the "Offering") of $100 million aggregate principal amount of its 11
3/4% Series C Senior Notes due 2005 (the "Series C Notes") on substantially
identical terms as its outstanding Series B 11 3/4% Senior Notes due 2005. The
consummation of the Offering is subject to the satisfaction of certain
conditions and is expected to occur on October 8, 1997. Substantially all of
the proceeds of the Offering shall be applied to reduce Coinmach's outstanding
borrowings under its senior credit facility.
THE SERIES C NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND, UNLESS SO REGISTERED, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF SAID ACT AND APPLICABLE STATE
SECURITIES LAWS.
###
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1
<PAGE>
EXHIBIT 99.2
------------
CONTACT:
- -------
Mr. Robert M. Doyle, Senior Vice President and
Chief Financial Officer; (516) 484-2300
Coinmach Laundry Corporation
FOR IMMEDIATE RELEASE:
- ---------------------
New York, New York, October 8, 1997 - Coinmach Corporation
("Coinmach"), a wholly-owned subsidiary of Coinmach Laundry Corporation (NASDAQ
National Market: "WDRY") announced today receipt of consents from the holders of
its Series B 11 3/4% Senior Notes due 2005 (the "Notes") necessary to modify the
covenant in its indenture restricting Coinmach's ability to incur debt. The
amendment, which will go into effect today, will provide Coinmach with greater
flexibility to incur additional indebtedness during the next twenty four months.
Notwithstanding the receipt of requisite consents, Coinmach (i) will continue to
accept consents from holders of the Notes until 5:00 p.m., New York City time on
Tuesday, October 14, 1997 and (ii) continue to pay a consent fee of $8.75 per
$1,000 principal amount of Notes to each such holder who tenders an accepted
consent in accordance with the terms of the consent solicitation on or prior to
that time.
Coinmach Laundry Corporation is the nation's leading provider of coin-
operated laundry equipment services for multi-family properties. Coinmach owns
and operates approximately 415,000 coin-operated washers and dryers on routes in
over 42,000 locations throughout the United States and northern Mexico.
Coinmach is also a distributor of laundromat equipment and turnkey laundromats.
###
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